Reynolds hears advocacy groups’ priorities in budget hearing

Iowa advocacy groups made their pitches for state budget priorities in Gov. Kim Reynolds’ budget proposal during a hearing on Wednesday.

Interest groups representing Iowa’s largest employers, small businesses, community colleges, contractors, private schools and health care providers applauded tax cuts and budget choices in past years — as well as allowing Iowa families to use state funding to pay for private school tuition. They also asked for further tax cuts and continued investments in the coming budget year to support workforce initiatives in areas like workplace learning, child care, affordable housing and mental health services.

Members representing Iowa livestock producers, farmers and the agricultural industry also asked for continued funding for foreign animal disease preparedness.

The legislative session starts Monday. Reynolds is scheduled to deliver her annual Condition of the State Address at 6 p.m. Tuesday, where she will lay out her legislative priorities and her proposed budget.

Taxes

Republican lawmakers plan to accelerate the state income tax reductions already on the books, with a possible eye toward gradually eliminating the tax altogether. A move business and conservative taxpayer groups pushed for Wednesday.

Chris Hagenow, president of Iowans for Tax Relief and a former Republican state lawmaker, praised Reynolds’ effort to “streamline state government” and ensure Iowa taxpayers are “getting the value for their investment in government.”

“And clearly there is a significant room to continue to lower income tax rates and hopefully accelerate the implementation of our flat tax,” Hagenow said. “For each individual Iowan that may be struggling with this economy, or just looking to get ahead, it allows them to keep more of their dollars," he said.

Democrats have urged caution, noting a state panel projects state tax revenue will flatten during the next budget. Sales tax revenue, though, continues strong growth, helping to offset revenue reductions resulting from recently enacted state income tax cuts.

Statehouse Republicans point to a $2.1 billion state budget surplus — which is projected to grow to $3.1 billion in the next fiscal year — plus another $3.7 billion in the state’s Taxpayer Relief Fund as reasons to pursue further tax reductions.

Reynolds this past February said her goal is to eliminate the state income tax by the end of her current four-year term, which ends in 2026.

Workforce

Business group representatives continued to stress support for workforce initiatives, including bolstering child care, housing, mental health and apprenticeship initiatives.

Ginny Shindelar, with the Associated Builders and Contractors of Iowa, said apprenticeship training grants have allowed the organization to offer training at a lower cost.

Shindelar said the grant money has become vital to Iowa’s manufacturing, health care, construction and information technology industries.

“It has allowed us to lower tuition so our contractors can afford to hire and train more apprentices to help address the critical shortage of workers,” she said. “We have seen significant growth in enrollment and graduation numbers since the beginning of the grant program.”

Emily Shields, executive director of Community Colleges for Iowa, requested a $10 million increase “to equalize funding across the state’s community colleges and ensure that we can support students in all regions of the state and continuing to make education and training affordable for them so that they can stay in Iowa.”

Reynolds said strengthening and supporting Iowa’s workforce continues to be a top priority of her administration — “to child care, to housing, to really helping small companies upgrade through innovation and technology … which is another way that we're helping deal with workforce.”

Health care and food assistance

Advocates for Iowa’s food banks and mental health and substance abuse providers requested additional funding to raise wages to address workforce shortages and help feed more hungry Iowans.

Michelle Book, CEO of Food Bank of Iowa, thanked Reynolds for her use of federal COVID-19 relief funds to assist food banks build capacity to help serve a growing number of food insecure Iowans.

“However, today 11 percent of Iowans live in poverty,” Book said. “More than 36 percent of working Iowa households don't make enough money to cover the cost of basic needs. In many parts of rural Iowa a 20-hour job is the best job in town; however, this does not provide sufficient funding to raise a family, rent or buy a house in a dynamic housing environment, secure quality day care, drive a car, let alone purchase adequate nutritious food to support the growth and development of our state's youth.”

Roughly 300,000 Iowans lack access to nutritious food, including of 100,000 children, Book said.

“As federal poverty benefits become more difficult for Iowans to access, I would like to encourage you to consider providing funds to help Feeding America food banks procure food for the over 1,200 pantries and feeding sites, which we support across all 99 Iowa counties,” Book said. “Today were funded by private donors. But going forward we would like to embrace a public-private partnership to ensure that we are able to feed all hard working Iowans and Iowans that have retired or live on disability.”

Iowa is among 17 states — nearly all led by Republican governors — that won’t participate in a federal program that provides hundreds of millions of dollars for summer food aid for children. Reynolds said the state would not join the Summer EBT program, opting instead to use state money to enhance other summer food programs she said are more nutritious.

Lisa Pakkebier is executive director of REM Iowa, which delivers home- and community-based programs for Iowans with intellectual and developmental disabilities.

Pakkebier told Reynolds additional state support is needed to raise wages for caregivers.

“We are nearly 100 percent Medicaid funding, which means that we have no ability to cost-shift or raise prices to increase our wages,” she said. “ … A rate increase directed at wages would help support and ensure that providers can recruit and retain a high quality workforce to support vulnerable individuals with intellectual disabilities, brain injuries, mental health challenges, co-occurring conditions and other complex needs.”

Flora Schmidt, executive director for the Iowa Behavioral Health Association, lobbied for Reynolds and lawmakers to extend postpartum Medicaid coverage to include 12 months of postpartum care, and to use money the state has received from settlements with opioid drug manufacturers to help bolster and expand mental health and substance abuse prevention, intervention and treatment programs, including in schools.

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