Newsletter: Rozenboom Report (3/20/2015)

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The Iowa Legislature has completed the tenth week of the session with a flurry of floor debate and votes on a wide variety of legislative issues. In the last two weeks the Senate has discussed and voted on over ninety bills that will now move over to the House for their consideration. Many of the Senate bills will die in the House; conversely, many of the House bills will not be considered in the Senate. Such is the nature of a split legislature. However, it should be noted that a lot of the work of the legislature is bipartisan in nature, with changes in state law that all Iowans agree on.

We addressed several bills to protect Iowa children, including Senate File 462. Many Iowa children suffer from various allergies such as food allergies, seasonal allergies, or bee stings. Senate File 462 would allow Iowa schools to maintain and administer epinephrine in the event someone was to go into anaphylactic shock. The Senate voted unanimously for the passage of SF 462.

One of the primary responsibilities of the state legislature is to establish a balanced budget for the next fiscal year, and to do that we need an accurate estimate of state revenues. The Revenue Estimating Conference (REC) meets three times a year to provide a forecast of expected revenue to the state general fund. The Revenue Estimating Conference is comprised of three members. The Governor or the Governor’s designee, the Director of the Legislative Services Agency, and a third person agreed upon by the other two members. The REC meets in October, December and March. The December estimate must be used to set the budget unless the March estimate is lower. In that case, the March estimate must be used.

The REC met on Thursday, March 19, and revised their state revenue estimate for FY16 downward by $21 million, which means a tight budget just got tighter. The December estimate suggested we would have $200 million new dollars over FY15; that has now been revised to $180 million. The expected increase in Medicaid spending alone for FY16 is $206 million. That’s right; Iowa’s share of Medicaid will take all the new revenue, plus another $26 million. In addition, the Governor’s budget includes $84.8 million for Supplemental State Aid (SSA), a 1.25% increase. Setting SSA at a 4.0 percent increase, as Senate Democrats are advocating, would require another $112 - $127 million depending on how we fund the AEAs.

So the budget restraints are obvious. Just two years ago the state budget had a budget surplus of over $800 million. Education reform, property tax reform and Medicaid increases have reduced that surplus to an estimated $250 million by the end of FY16. The property tax reform cost to the state budget is offset by a significant reduction in property taxes, so while that did increase the state budget, there was a corresponding reduction in property taxes. But Medicaid costs and education demands continue to escalate, outpacing all other budget growth. As the legislative session goes into the final few weeks, budget considerations will take center stage. And, just as we do in our family budgets, the state must match spending with revenue. Unlike Washington, we can’t print money or borrow money; we have to make ends meet.

Please continue to contact me with your questions and concerns with a phone call, an e-mail or a visit. I will be at Smokey Row in Oskaloosa at 8:30 AM Saturday, March 28.

Senator Ken Rozenboom

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