Excerpt from Rep. John Wills’ newsletter:

Development of the state budget took a major step forward on Tuesday when House Republicans unveiled our framework for a responsible, conservative budget in Fiscal Year 2020. The House proposal provides $7.668 billion from the General Fund to state programs beginning July 1, 2019.

The House budget plan spends just 97.45 percent of the General Fund’s on-going revenue, which is projected to be $7.8684 billion in 2020 according to the state’s Revenue Estimating Conference. The $7.6680 billion budget plan represents a 0.63 percent increase over the current year’s budget, including the Governor’s supplemental funding proposal. This is below the REC’s projected revenue growth level for FY 2020 of 1.8 percent.

The House Republican plan allows for the state to address several priorities that Iowans have brought to their elected representatives. These include addressing Medicaid reimbursements to nursing homes and rural hospitals and providing additional resources for mental health services to children and adults. Additional resources can also be committed to worker training, through the Future Ready Iowa program and the assistance provided to Iowa’s higher education institutions.

The House Republican framework funds the commitment made to Iowa’s public-school system with the adoption of the 2.06% increase to state school aid and increases for school transportation costs. The budget design also allows for new resources to be used for Iowa’s public safety, corrections, and judicial systems. This is all done while ensuring that state spending is less than what Iowa is projected to collect in tax revenue for the year.

HOUSE TARGETS FY 2019 Adjusted FY 2020 House Diff from FY 2019
Administration & Regulation $48,466,893 $52,420,985 $3,954,092
Ag & Natural Resources $39,357,522 $41,107,522 $1,750,000
Economic Development $40,216,345 $41,028,345 $812,000
Education $912,675,487 $961,044,271 $48,368,784
Health & Human Services $1,962,894,820 $1,941,888,698 -$21,006,122
Justice Systems $751,532,636 $770,370,901 $18,838,265
State Aid to Schools & Appropriations $3,864,188,258 $3,860,115,038 -$4,073,220
GENERAL FUND TOTAL $7,619,331,961 $7,667,975,760 $48,643,799

 

The House Republican targets are very close to what Governor Reynolds proposed in her Condition of the State speech last month. The House plan spends $9.5 million more than what the Governor recommended in her budget. Both plans spend below the limits imposed by Iowa’s expenditure limitation law ($7.8807 billion).

The targets fund House Republican priorities while limiting spending and increasing the state’s ending balance.  Under the House plan, the state ends Fiscal Year 2020 with a balance of $298.6 million in the General Fund. This would be a significant improvement from just a couple years ago and provides a cushion in case revenue estimates, on which all state spending is based, misses the mark.

The House targets are the first big step by the Legislature towards completing the FY 2020 budget.  With the release of the targets, budget subcommittees with begin discussing how they utilize the resources allocated to their areas.