Newsletter: Rozenboom Report (1/15/2016)

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The 2016 General Assembly began work on January 11. The balance of power remains as it’s been for several years with Republicans holding the majority in the 100 member House of Representatives, and Democrats holding the majority in the 50 member Senate. There are no changes in Senate leadership this year. Mike Gronstal remains as the Senate Majority Leader and Pam Jochum as Senate President, with Bill Dix heading the Senate Republicans as Minority Leader.

House leadership has changed however, because Craig Paulsen stepped down as the Speaker of the House and has been replaced by Linda Upmeyer, who becomes the first woman Speaker of the House in Iowa history. Chris Hagenow of Des Moines is the new House Majority Leader with Mark Smith continuing as the House Minority Leader. We’ll have to see if and how these leadership changes affect our legislative negotiations and outcomes.

Of course, budget considerations will dominate the debate and the media coverage as they always do. More specifically, education funding will take center stage since that’s where 55% of Iowa’s tax dollars go. The December, 2015 Revenue Estimating Conference (REC) report always begins the budget discussion because that is our best estimate of revenue coming into state coffers. By law, we must use those projections to balance our budget unless the March REC numbers come in lower than December, in which case we must use the March estimates.

A review of Iowa’s recent financial history is valuable as we begin this year’s negotiations. In 2013, only three years ago, the state had an ending balance (money in the checkbook at the end of the fiscal year) of nearly $928 million. This is the “budget surplus” we all heard so much about back then. At the end of fiscal year 2016, that ending balance is expected to be around $185 million. That means that the state has spent that extra money.

Where did all that “budget surplus” go? State expenditures in FY2012 were approximately $6 billion; state expenditures in FY2016 will be over $7.2 billion, an increase of over 20%, or $1.2 billion, over 2012. There are three primary areas in which our state budget has grown: education, Medicaid and property tax backfill. We are now spending $513 million per year more on education than we did in 2012; we are spending $400 million per year more on Medicaid than we did in 2012, and we are spending $304 million per year more on property tax backfill to local governments.

There will be more budget details in the weeks ahead as we go through the process of establishing a balanced state budget. But it should be apparent to all that we need to use responsible budgeting practices, and that there will not be enough money to meet all the demands placed upon us. I will also be providing weekly newsletters that deal with the many policy issues we will be considering in 2016.

Visiting with our constituents is always a vital part of our responsibilities as elected officials. Please plan to attend the forums scheduled in Senate District 40. I will be at Smokey Row in Oskaloosa at 8:30 AM on January 23, February 13, March 12 and March 26. Also scheduled are forums at the Bridge View Center in Ottumwa at 9:30 AM on February 6, March 5 and April 2. And I will be in Centerville at 10:00 AM on February 20 and March 19. Those forums are held at the Chariton Valley Planning and Development office at 308 North 12th Street in Centerville. I would also be glad to visit with other groups on request, particularly in Pella or Albia, since there are no regularly scheduled forums in those cities.

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