Iowa legislative negotiators hope for breakthrough on budget deal

DES MOINES - House and Senate negotiators said Tuesday they were optimistic this 20th week of the 2015 legislative session would net a budget deal that will hasten the end of their overtime work.

'We're hopeful that we'll get together today and things will start to break,” Senate Majority Leader Mike Gronstal, D-Council Bluffs, told reporters after a skeleton crew of senators convened for four minutes Tuesday - the session's 135th day - to send a budget piece to conference committee and gavel out until Wednesday.

Gronstal said the full contingent of legislators will be summoned back to the Statehouse once negotiators settle on an overall spending number for the fiscal 2016 state general fund budget and resolve their differences on funding levels for supplemental state aid for K-12 schools and Medicaid spending - two of the biggest spending pieces.

'I think we've made progress. We're not there yet,” said Rep. Chuck Soderberg, R-LeMars, chairman of the House Appropriations Committee. 'I hate to speculate (when a budget deal will get finalized), but I think it's a good sign that all parties are at the table.”

Negotiators said they have narrowed the $166 million gap between their initial fiscal 2016 spending targets, but they declined to say where that difference currently stood. Soderberg said it appears all sides are assuming Gov. Terry Branstad's plan to switch Medicaid to a care system managed by private providers will move forward, and have accepted a projection that the change would net cost-containment savings of about $51 million next fiscal year.

When budget talks began earlier this session, House Republicans capped fiscal 2016 state general fund spending at $7.176 billion, saying they would not spend more than the state takes in or use one-time money to fund ongoing expenses. Senate Democrats adopted Branstad's overall $7.341 billion spending plan but departed with him in a number of ways to get there although both approaches used one-time surplus money to cover 2013 commitments made to property tax relief and school reform efforts.

Democrats and Republicans also started more than $100 million apart on spending for human services and Medicaid programs, while Branstad-led Republicans set a 1.25 percent state aid growth rate for K-12 schools in fiscal 2016 and a 2.45 percent boost to schools in fiscal 2017 - but House Republicans recently scaled back their increase to 2 percent.

Democrats wanted 4 percent growth in state aid to K-12 school districts for both fiscal 2016 and 2017, but scaled back next year's request to 2.625 percent during negotiations and the two sides are considering a hybrid compromise for a 1.25 percent hike in base budgets and a one-time $55 million addition to resolve the fiscal 2016 impasse.

'We're continuing to identify any one-time expenditures, and we're open to whatever that might be,” Soderberg said Tuesday, noting that some ending balance/one-time money may be used to offset supplemental Medicaid needs or education costs.

'Everybody's working hard to try and find a way to resolve this year's state budget,” Gronstal said. 'I think all of the pieces are there. It's a question of compromising, whether people can work through that.”

Whether final adjournment can come yet this week for the split-control Legislature remained uncertain, with Branstad expecting the 2015 session to spill into the first week of June before all of the year's work is completed.

'We'll see,” said Gronstal.

'We're going to get done when we get the work done, when we get a budget that works for Iowa. We're going to fight through those issues and we'll go through that process. That's what we've been doing,” he added. 'Iowans chose to put this set of people in this building at this moment in time and we're doing our level best to figure out a way to make the state budget work.”

There was still a stack of unresolved policy issues, including strengthening anti-bullying efforts in schools, expanding broadband access in underserved and unserved areas and legalizing the sale, possession and use of consumer-grade fireworks in Iowa, that remained in limbo with the 2015 session winding down.

Gronstal said there's a possibility some of those issues could see floor debate in the waning days if there are lulls while budget compromises are drafted and printed before getting legislative consideration.

'We'll wait and see. All of those are issues that are important to somebody. If consensus comes together, we'll see what we can get done,” Gronstal said. 'It's certainly possible we will take up some of those issues.”