Legislators begin sculpting fiscal 2011 budget

DES MOINES – Majority Democrats in the Iowa Legislature began fashioning a fiscal 2011 budget Thursday that they conceded will likely be an ongoing moving target given the nation's uncertain economic picture.

“It's going to be a huge work in progress,” said Sen. Bob Dvorsky, chairman of the Senate Appropriations Committee. “There are too many moving parts.”

Much of the uncertainty centers around whether the federal government will chip in $95 million, and possibly up to $127 million, to help fund Iowa's Medicaid program next fiscal year, he said.

Senate Majority Leader Mike Gronstal, D-Council Bluffs, said state cash reserves will likely be needed to fill in some gaps in human services programs, but at worst the surplus reserve would be cut to $200 million.

“We're going to do real cuts,” he said. “No one will be shielded,” but Gronstal noted that majority Democrats will try to minimize the impacts in areas of education, health care, job creation and public safety.

The Senate leader said negotiators are “very close” to finalizing a state government reorganization package passed in different forms by the House and Senate that will result in overall savings “in the $260 million to $265 million range.”

Minority Republicans worried that the plans to underfund K-12 education by about $170 million below school districts' authorized spending authority would result in property tax increases. Lawmakers earlier this session approved a bill requiring districts with cash reserves to tap those surpluses first before seeking more property tax revenue.

“We'll continue on spending money and pushing property taxes onto local property taxpayers,” said Senate GOP Leader Paul McKinley of Chariton. He said Iowans are concerned, upset and scared due to the lack of legislative efforts to help business create private-sector jobs.

Republicans on a House-Senate education subcommittee refused to vote on a fiscal 2011 spending plan – mostly for higher education -- that was about $11.5 million below the current $856 million revised funding level because the information was in spread sheet form and there remain concerns the federal government will require more state funding to comply with stimulus assistance guidelines.

State lawmakers already are fashioning a supplemental spending bill for the current year that provides more than $36 million for regent universities and community colleges to abide by the federal stimulus requirements. Another $8.1 million goes to justice system programs to bolster public safety funding and staffing.

Senate File 2366 also cuts $11.4 million from the court system as part of the fiscal 2010 across-the-board spending cut and lowers the state's Values Fund allocation for economic development by $17.5 million to adjust the current year's ledger.