Tight budget tempers legislative spending expectations

DES MOINES - Top legislators are telling Iowans to temper their spending expectations for fiscal 2016 heading into a tough state budgeting cycle pinched by sagging tax receipts and sizable multiyear commitments put in place to ease property tax burdens and reform education.

'We're going to have to make cuts,” Senate Majority Leader Mike Gronstal, D-Council Bluffs, told about 130 members of the Greater Des Moines Partnership at their annual legislative preview luncheon on Wednesday. 'We're not going to be able to fulfill all of the commitments that we have on the books. It's really that simple.”

House Speaker Kraig Paulsen, R-Hiawatha, agreed with Gronstal's assessment, saying Republicans who control the Iowa House and Democrats who guide the Iowa Senate will face some tough decisions that likely will mean some budget areas get cut to make room for past commitments and new funding priorities in crafting a bipartisan spending plan.

'It's going to be a remarkably difficult budget year this year I think,” Paulsen told reporters after the forum.

'But just because it's difficult doesn't mean we won't figure out how to get through it,” the House speaker told the forum participants. 'We will do that but I think people have to have some pretty tempered expectations when it comes to that.”

Wednesday's comments by legislative leaders echoed concerns raised by Gov. Terry Branstad, who called the fiscal 2016 budget a challenging prospect given the fact that tax revenues are not meeting expectations while the state faces a growing list of spending pressures.

State agency spending requests for the new fiscal year that begins July 1, 2015, approach $7.05 billion, a 3.8 percent increase over current appropriations. A pre-session analysis by the Legislative Services Agency identified nearly $500 million in built-in and anticipated spending increases that did not include increased state aid for K-12 schools or increased compensation for state employees.

Included in the fiscal 2016 projections was property tax relief costing $142 million, education spending needs totaling $124.7 million, and increased Medicaid costs and federal funding shifts that have caused human services funding requests to spike by $202 million.

'It's going to be a tight budget,” Gronstal said, 'not a dire budget.”

The Senate majority leader said he did his own fiscal 2016 budget projections based upon spending expectations and came up with an overall plan that was $42 million in deficit.

'We can't spend money we don't have,” Gronstal said. 'We're not like the federal government, so we'll come up with a budget that works.”

Both Gronstal and Paulsen said they hoped the Legislature to agree to a funding increase for K-12 school districts' base budgets within 30 days after Branstad presents his fiscal 2016 spending plan to lawmakers. The 2015 legislative session is slated to begin Jan. 12.