Small Change in Revenue Projections
The Revenue Estimating Conference (REC) met today and made very small changes to the state revenue projections. They estimated an additional $1 million for the current year and an increase of $33 million for FY 11. Remember, the budget is over $5 billion, so this amount is really insignificant. The legislature is bound by law to use the estimate of revenue from last December to craft the FY 11 budget. However, I would guess the Democrat majority will just spend more of the Cash Reserve Fund because of this new estimate.
It looks like we are nearing the end of session, and we still don't know the total amount to be spent. Schools are trying to set their budgets without knowing how much they will receive in state aid. We will finally start debating the budget bills next week.
Democrats Propose Special Deal for Teachers
Teacher salaries will be exempted from across the board (ATB) cuts - now and in the future - through an unprecedented move by legislative Democrats. The special exemption is contained in the education budget bill yet to be debated. The implications of exempting teacher pay from ATB cuts are far reaching.
First, it creates a $24 million statewide property tax liability because Iowa school districts will have to go back and pay teachers the $24 million yet this fiscal year. With just three months left in the fiscal year, districts will be looking to the property taxpayer to pick up the cost.
Second, the obvious question: the custodian, the food service worker, the teacher's associate, and the principal's secretary take a pay cut but not the teacher they work beside? It's safe to say that the 110,000 unemployed Iowans, many in the private sector, would gladly take a pay cut in lieu of a layoff.
Third, exempting teacher pay from any ATB cut is just flatly preferential. In doing this, Democrats are effectively sending the message that hard times shouldn't be shared by all and should never be shared by teachers.
Finally, passing a law exempting any one program from an ATB cut is a reckless fiscal practice. State law allows the governor to make across the board cuts or call the legislature into special session to make selected cuts. Carving out exceptions to an ATB cut takes elected officials out of the very decision making process that Iowans elected them to do.
In addition, Senate Study Bill 3248 makes teachers the only professionals in the state that will immediately get the name of a person filing a complaint against them. Iowa's 32 other licensing boards don't release the name unless it becomes a founded complaint.
Big Problems Ahead for Medicaid
The FY11 Health and Human Services appropriations bill reflects a $172 million cut in state spending. While the focus will be on the pain being felt this year, the real problem with this budget is what happens to Medicaid next year.
While overall state spending grew by 19 percent the last three years, Governor Culver and legislative Democrats were only able to find money to give Medicaid providers a one percent increase in reimbursement rates. Instead of properly funding the program, Medicaid has been transformed into an easily accessed bank account to fund other programs and new ideas.
In FY 2010, just $606 million of the $984 million spent on Medicaid comes from the state's income and sales tax revenues. Another $100 million comes from the 2007 cigarette tax hike. The rest comes from a variety of sources of non-recurring funds, like one-time federal stimulus funds and the continuing raid on the Senior Living Trust Fund.
The proposed FY 2011 budget marks a dramatic shift in how the state funds Medicaid. Next fiscal year, the state will use almost as much one time and non-recurring funding for Medicaid as it will from the General Fund and the 2007 cigarette tax increase. Among the sources will be $225 million of federal stimulus funds, $187.8 million taken from the state's Cash Reserve Fund, and the final dollars out of the Senior Living Trust Fund.
This may get the state through FY 2011, but it creates a huge problem in FY 2012. With normal growth factor for the program at six percent, Iowa would need $1.071 billion to maintain the current program. The recurring revenue that would be spent on Medicaid is $534 million. This means the next governor and the 84th General Assembly will have to find $537 million in new money to maintain Medicaid as it is today.
Legislative Forum
Please join us at 9:00 a.m. on Saturday, March 27 at the Farmers and Merchants State Bank on the Winterset square.
How to Contact Me
I can be reached at jodi.tymeson@legis.state.ia.us, or by telephone at the Capitol 515-281-3221, directly to my desk in the House Chamber 515-281-7615, or at home 515-462-5081. Please send mail to my home at 1524 Highway 169, Winterset, IA 50273, or the State Capitol Building, Des Moines, IA 50319. I appreciate hearing from you.
The Revenue Estimating Conference (REC) met today and made very small changes to the state revenue projections. They estimated an additional $1 million for the current year and an increase of $33 million for FY 11. Remember, the budget is over $5 billion, so this amount is really insignificant. The legislature is bound by law to use the estimate of revenue from last December to craft the FY 11 budget. However, I would guess the Democrat majority will just spend more of the Cash Reserve Fund because of this new estimate.
It looks like we are nearing the end of session, and we still don't know the total amount to be spent. Schools are trying to set their budgets without knowing how much they will receive in state aid. We will finally start debating the budget bills next week.
Democrats Propose Special Deal for Teachers
Teacher salaries will be exempted from across the board (ATB) cuts - now and in the future - through an unprecedented move by legislative Democrats. The special exemption is contained in the education budget bill yet to be debated. The implications of exempting teacher pay from ATB cuts are far reaching.
First, it creates a $24 million statewide property tax liability because Iowa school districts will have to go back and pay teachers the $24 million yet this fiscal year. With just three months left in the fiscal year, districts will be looking to the property taxpayer to pick up the cost.
Second, the obvious question: the custodian, the food service worker, the teacher's associate, and the principal's secretary take a pay cut but not the teacher they work beside? It's safe to say that the 110,000 unemployed Iowans, many in the private sector, would gladly take a pay cut in lieu of a layoff.
Third, exempting teacher pay from any ATB cut is just flatly preferential. In doing this, Democrats are effectively sending the message that hard times shouldn't be shared by all and should never be shared by teachers.
Finally, passing a law exempting any one program from an ATB cut is a reckless fiscal practice. State law allows the governor to make across the board cuts or call the legislature into special session to make selected cuts. Carving out exceptions to an ATB cut takes elected officials out of the very decision making process that Iowans elected them to do.
In addition, Senate Study Bill 3248 makes teachers the only professionals in the state that will immediately get the name of a person filing a complaint against them. Iowa's 32 other licensing boards don't release the name unless it becomes a founded complaint.
Big Problems Ahead for Medicaid
The FY11 Health and Human Services appropriations bill reflects a $172 million cut in state spending. While the focus will be on the pain being felt this year, the real problem with this budget is what happens to Medicaid next year.
While overall state spending grew by 19 percent the last three years, Governor Culver and legislative Democrats were only able to find money to give Medicaid providers a one percent increase in reimbursement rates. Instead of properly funding the program, Medicaid has been transformed into an easily accessed bank account to fund other programs and new ideas.
In FY 2010, just $606 million of the $984 million spent on Medicaid comes from the state's income and sales tax revenues. Another $100 million comes from the 2007 cigarette tax hike. The rest comes from a variety of sources of non-recurring funds, like one-time federal stimulus funds and the continuing raid on the Senior Living Trust Fund.
The proposed FY 2011 budget marks a dramatic shift in how the state funds Medicaid. Next fiscal year, the state will use almost as much one time and non-recurring funding for Medicaid as it will from the General Fund and the 2007 cigarette tax increase. Among the sources will be $225 million of federal stimulus funds, $187.8 million taken from the state's Cash Reserve Fund, and the final dollars out of the Senior Living Trust Fund.
This may get the state through FY 2011, but it creates a huge problem in FY 2012. With normal growth factor for the program at six percent, Iowa would need $1.071 billion to maintain the current program. The recurring revenue that would be spent on Medicaid is $534 million. This means the next governor and the 84th General Assembly will have to find $537 million in new money to maintain Medicaid as it is today.
Legislative Forum
Please join us at 9:00 a.m. on Saturday, March 27 at the Farmers and Merchants State Bank on the Winterset square.
How to Contact Me
I can be reached at jodi.tymeson@legis.state.ia.us, or by telephone at the Capitol 515-281-3221, directly to my desk in the House Chamber 515-281-7615, or at home 515-462-5081. Please send mail to my home at 1524 Highway 169, Winterset, IA 50273, or the State Capitol Building, Des Moines, IA 50319. I appreciate hearing from you.
