School Funding Conversation Continues
The House Republican position on spending is reasonable, sustainable and based on simple common sense - don't spend more than you take in, don't spend one-time money for on-going things and don't knowingly underfund commitments simply to make the numbers work. Doing any of those things are short-term, unpredictable practices which lead to widespread budget problems.
Using those principles moving forward, this is budget picture: Last year the legislature appropriated for spending $6.995 billion. Based on the Revenue Estimating Conference’s last estimates, the new revenue coming into the state for this year is $7.175 billion. The difference is 2.6% or $180.9 million.
The House proposed an increase of 1.25%, a total funding commitment of about $100 million. This is 55% of the new available revenue, giving K-12 schools in this state the first and largest share of any new revenue available.
With the remaining new revenue the Legislature will have to find a way to fund the remainder of the state budget which includes community colleges, the state universities, increasing Medicaid costs, programs through the Department of Human Service, economic development and public safety, among many other responsibilities.
Chris Earl from KCRG did an honest story of the legislative impasse, where he interviewed me. Here is the link: http://www.kcrg.com/subject/news/legislative-divide-lingers-on-public-school-funding-20150408
Property Tax Reform’s Impact on School Funding
The latest narrative being built is that the commercial property tax reform bill approved in 2013 is strangling school districts by reducing the amount of property tax revenue they receive. This argument is not supported by facts. According to the non-partisan LSA, the 2013 bill did several things:
- Created a business property tax credit. This has no impact on school finance.
- Rolled industrial, commercial, and railroad property down to 95% and then to 90% of assessed value. This is 100% reimbursed by the state for the first few years of the bill’s implementation so it also has not had any impact on school finance.
- Reduced the allowed growth in residential and agricultural property taxed value from a maximum of 4% a year to 3% a year. This does reduce the amount a dollar of school tax rate can generate. However, the school aid formula then dictates a higher tax rate, so for the parts of school budgets determined by the formula, school budgets are not impacted. But they do see reductions on the parts of their rate NOT controlled by the formula. But they have the ability to set a higher rate unless the rate is somehow limited.
- Decreased telephone utility property taxed value. This has a similar type of impact as the point directly above and the result is the same. A higher tax rate can be set.
- Created a new multi-residential property class. This has not yet taken effect so this item has not impacted school finance.
Iowa’s Expenditure Limitation Law
Iowa’s expenditure limitation law was created in a time of budget turmoil. Throughout the 1980’s, Iowa faced a number of fiscal challenges that caused the state to be unable to meet the funding obligations made by the Legislature. These issues reached a head in 1992, when the Iowa Supreme Court ruled that Governor Branstad was required to provide raises to unionized state employees even though the state did not have the money to pay them.
The Supreme Court’s ruling forced the Governor and legislative Democrats (the majority party at the time) to rewrite the FY 1993 budget. In the end, the Legislature and the Governor were forced to increase the state’s sales tax from 4 to 5 percent. That required bipartisan cooperation and the price for that cooperation from legislative Republicans was the creation of the cash reserve fund and economic emergency fund. Also part of the deal was the creation of an expenditure limitation law.
Revenue Growth Slightly Slower in March
General Fund revenue dipped slightly in March, according to the latest revenue report from the non-partisan Legislative Services Agency. Revenue collections for the month were $1 million less than what was taken in during March 2014. These figures put Fiscal Year 2015 revenue growth through the first nine months of the year at 4.7 percent. This is below the 5.5 percent growth projected by the Revenue Estimating Conference at its March meeting.
For personal income tax collections, March’s total was $7.3 million below the previous year’s level. A factor in the decrease could be the problems with online forms needed for farmers to file. Because of this issue, the Department of Revenue allowed taxpayers using these forms to have until April to file their returns. Usually they are required to be filed by March 1. For the fiscal year, personal income tax collections are up 4.3 percent. This is just below the REC projection of 4.7 percent growth for FY 2015.
Sales and use tax collections were also down this March. The state took in $9.9 million less for March 2015 in this category. For the fiscal year, sales and use tax collections are up 4.5 percent. This is in line with the REC’s latest estimate for this category.
Up on the Roof
written by Dani Boal, Clerk for Rep. Rogers
Did you know the Capitol caught fire on January 4th, 1904? In 1902, an effort to modernize the building began including electric lighting, elevators, and telephones. In early January 1904, a workman’s candle started a fire in the House chambers in the North wing of the Capitol. The fire destroyed much of the House chamber, Supreme Court chamber, and other offices in the North wing. The fire blazed from 10 am to 6 pm that day, even though some newspaper’s reported the fire smoldered for several days.
Crampton Linley was the engineer working with the Capitol Improvement Commission. He was in the building at the time of the fire and was credited with saving the remainder of the building. Linley crawled through attic areas to close doors separating the wings of the Capitol, an action that smothered the flames and brought the fire under control. Sadly, Lindley did not live long enough to be recognized for his heroism. The day after the fire, while examining the damage, Linley fell through the ceiling of the House Chamber and died instantly from severe head injuries. His death was the only one associated with the fire.
Representative Rogers, Representative Fry, and their clerks got a rare chance to go behind the scenes of the Capitol with Senior Facilities Manager, Mark Willemssen. We crawled above the House, Senate, Library, and Grand Staircase and went up into one of the side domes. Thank you Mark for a great behind the scenes tour!
Visitors to the Capitol
Rick Santorum came to speak to people at the Capitol. I had the privilege of hosting him and introducing him to fellow Legislatures and staff at the Capitol. Congressman Blum also stopped by to visit the Capitol and speak with Legislatures.
The UNI men's basketball team visited the Statehouse to witness the passing of their resolution which recognized their successful winning season.