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Legislative state budget work underway
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Legislative state budget work underway

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The Iowa State Capitol building Friday, July 31, 2020, in Des Moines.

DES MOINES — A sure harbinger of adjournment for the 2021 legislative session happened Monday when the Senate Appropriations Committee advanced the first state budget bill — even if the end still is weeks away.

Committee members approved Senate Study Bill 1256 — a generally noncontroversial bill to fund state Department of Transportation operations from the road-use tax fund and primary road fund for fiscal 2022.

The Senate measure passed on a voice vote with no dissents. But that may be one of the few bipartisan accords that take place as legislators move into budget and tax policy issues with the unofficial adjournment target set for April 30 — the 110th session day, when daily expense money runs out for members of Iowa’s part-time General Assembly.

Monday’s action came after both the House and Senate gaveled into session for less than 10 minutes before ending the day’s work as discussions among majority Republicans take place behind closed doors on the declining list of priorities — albeit the most heavy legislative lifts — awaiting action.

Senate Republicans previously announced a fiscal 2022 target of $7.999 billion for state spending. But they conceded the amount likely will go higher as they negotiate funding for broadband expansion and other priorities with Gov. Kim Reynolds and majority Republicans in the House, who have yet to issue their spending projections for next fiscal year. The Senate number represented a $195 million increase over current funding with increases of $80 million for education, $98 million for health care and $60 million for mental-health services.

GOV. KIM REYNOLDS’ BUDGET PLAN

The governor’s budget plan set an $8.1 billion target for state spending — a 3.7 percent increase that would fund priorities in broadband expansion, K-12 and higher education and mental health programs for adults and children. Reynolds is seeking to boost state general-fund appropriations by $331.4 million. That included the first of three $150 million yearly installments for broadband, a 2.5 percent increase in state aid to K-12 schools and community colleges, a $15 million increase to regent universities, $38.7 million for Medicaid and human services needs and $15 million for mental health.

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SENATE REPUBLICANS PROPOSE TAX RELIEF

Senate Republicans also are proposing significant tax relief by eliminating the 2018 income tax “triggers” with a first-year cut to state revenue of about $110 million, phasing out the state’s inheritance tax, and revamping the mental-health levy with a state takeover of local costs that backers say will net $100 million in lower property taxes.

House Republicans have indicated plans to commit about $100 million to broadband expansion. But they have not weighed in on various tax-cut proposals other than approving a bill now awaiting Senate action to waive state taxes on federal PPP grants and loans for businesses and jobless insurance benefits for Iowa workers hurt by the impacts of the COVID-19 pandemic.

MINORITY DEMOCRATS WEIGH IN

Minority Democrats who hold ranking positions in House and Senate appropriation committees told progressive groups during a Zoom call Monday the state’s budget position is fairly strong with good revenue growth and an infusion of $4.5 billion in federal relief funds heading to Iowa for state and local needs on top of $1.25 billion last fiscal year. However, they did not anticipate the favorable numbers would translate into more money for state budget areas that have functioned on status-quo budgets since 2011 beyond increases for K-12 schools and Medicaid needs with GOP conservatives focused on cutting taxes and shrinking government.

“On the appropriations’ side, I’m kind of anticipating a bare-minimum year where most state services are going to receive modest if any increase at all. The real focus and debate between the House and Senate is going to be on those tax expenditures,” said Rep. Chris Hall, D-Sioux City, ranking member of the House Appropriations Committee, who pointed to the deaths of two Anamosa Penitentiary staffers as evidence that when core services are not funded “it has a cascade effect and we’re starting to see results of that.”

Sen. Joe Bolkcom, D-Iowa City, ranking member of the Senate Appropriations Committee, said he was hopeful the proposed $4 million increase for justice system funding in the Senate GOP targets was an indication that more funding will be pumped into a correctional system housing inmates at levels exceeding design capacities at the state’s prison. But he questioned whether that level would finance staffing needs beyond merely covering pay raises for current workers.

“We have the money. It’s not like we’re broke. Is this going to be a priority for them? And it’s sad to have this kind of tragedy to basically have a legitimate conversation to even do it,” he said.

Overall, Bolkcom said, “I think we’re going to be displeased with the level of funding for things like community colleges, child care, mental health, our public universities, our prisons, our courts — you name it, we’re going to underinvest in it with the budget that has been proposed at this point.”

TRANSPORTATION BUDGET BILL

During Monday’s committee work, Sen. Craig Johnson, R-Independence, said the fiscal 2022 transportation budget bill being put forward by Senate Republicans was a $398 million package that represented a net funding decrease of $2.9 million but an increase of seven full-time employees for the state Department of Transportation from road-use tax fund and the primary road fund. More money was included for major maintenance needs, replacement of medium- and heavy-duty trucks for the highway division and replenishment of the road salt supplies, he said.

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