Capitol Review 4/16/17

Iowa Budget – A Six Year Review

As the 2016 General Election season reaches its conclusion in the next few weeks, the public’s attention will turn the 2017 legislative session and the discussion of the Fiscal Year 2018 budget.  But before that begins, it’s important to take a look back at the last six years and see the stark differences in budgeting philosophy between House Republicans and House Democrats.  The impact of the budgeting principles House Republicans brought to the table in 2011 cannot be ignored. 

When the new House Majority took control in January, 2011, Iowa’s financial house was not in order.  The state was in the midst of a fiscal year where the non-partisan Legislative Services Agency said there was a funding gap in the General Fund of $1.070 billion.  Much of the funding gap was due to the decision by then-Governor Chet Culver and legislative Democrats to shift significant portions of General Fund expenditures to non-General Fund sources.  According to LSA, $817.9 million of General Fund spending had been shifted to non-General Fund sources including one-time federal stimulus funds.

The state’s two reserve funds - the Cash Reserve Fund and the Economic Emergency Fund - were not filled to the statutorily-required levels.  Instead, the funds had $109 million less than what is required by law - 10 percent of General Fund spending.  Property tax credits for homeowners, farmers, veterans, and seniors were once again underfunded.  Simply put, the state’s financial house was a mess at the start of the 2011 session.

The 2011 session, my first year in the legislature, brought a change in budgeting philosophy with the introduction of three budgeting principles by House Republicans. The new principles were simple and straight-forward:

House Republicans are committed to the following principles in producing a balanced state budget:

  1. Spend less than the state takes in;
  2. Do not use one-time money for on-going needs; and
  3. Do not balance the budget by intentionally underfunding programs.

The change in budgeting philosophy did not extend to everyone in the chamber.  House Democrats continued to push for spending above the state’s ongoing revenue, even when they were relegated to the minority by Iowa voters thanks to reckless votes for Des Moines flower pots and heated sidewalks.

During the 2011 session, House Democrats opposed a number of cost containment measures that House Republicans proposed as part of an effort to restore financial stability and sanity to the state’s budget.  The Democrats attempted to strip provisions from House File 45 that would have saved the taxpayers $174.6 million.  That was just the beginning of their free-spending ways. 

Building the FY 2012 budget began with the need to increase school funding by $156.2 million “…to backfill the under-funding of school aid in FY 2011. Because reductions to State aid made in FY 2011 did not reduce the State or district cost per pupil, the reduction is restored through the school aid formula for FY 2012, according to the Legislative Services Agency, “Summary of FY 2012 Budget and Department Requests”, page 18 (2011). 

House Democrats put forward budget amendments that would have increased state spending by an additional $168.4 million.  If Democrats had control of the chamber and succeeded in moving their budget ideas forward, the General Fund budget would have been $6.2321 billion - $200 million more than what the Revenue Estimating Conference had forecast for ongoing revenue that year.

The 2011 session would set the pattern when it came to House Democrats and the budget.  As a campaign commercial once said, “If it’s a good idea, let’s do it.”  And there aren’t many spending proposals that House Democrats fail to see as a good idea.  The following graphs show the dangerous spending proposals of the democrats over the last six years.  







The start of the legislative session brought about another push from House Democrats to promise schools more than the state had funds to provide.  They called to set the increase in Supplemental State Aid for schools at 4 percent.  House Democrats also continued their refusal to acknowledge the dramatic growth in the Medicaid program has put unceasing pressure on the rest of the state budget.  They offered language that would have terminated the Medicaid Modernization efforts, thus increasing Medicaid spending in FY 2017 by $111 million, according to the non-partisan Legislative Services Agency.  Such a move would have virtually wiped out the funding available for schools in FY 2017.  And they also called for a major increase in funding for the Board of Regents.  The net effect of these efforts would have pushed the state’s budget to $7.6126 billion - an amount that would have been $261.8 million over the expenditure limitation for the fiscal year.

$3.35 billion - and counting

These figures do not completely measure the amount of additional spending proposed by House Democrats over the past six years.  When supplemental appropriations and funding in out years are included in the calculation, House Democrats proposed over $3.35 billion more in General Fund spending between 2011 and 2016.  It’s hard to imagine what the state’s fiscal situation would be today if House Democrats had been in charge of Iowa’s budget with a track record like that.  Luckily for every Iowan, that wasn’t the case.

Over four successive elections, Iowa voters have put Republicans in charge of the House of Representatives.  During that time, funding for schools and community colleges has increased significantly.  Health care coverage for lower-income Iowans has expanded.  State debt has been reduced.  And even in tough budget times, the Legislature has always passed a balanced budget without many of the fiscal shell games of the past.  House Republicans commitment to budgeting within a set of principles has changed the culture within the Capitol.  Iowa would be in a much worse place without this.  With an energized effort here at the capitol by all Republicans to work for smaller, smarter government, I look forward to an integral influence in that goal!

Iowa’s High School Graduation Increases Again

In what’s becoming a yearly tradition, a report issued by the Department of Education this week shows that for the fifth consecutive year, the state’s graduation rate has increased.  Last year Iowa became the first state in the nation to top 90%, making it the highest in the nation.  While nation-wide data is not yet available, it’s likely Iowa will maintain that top spot when the national report is issued later this spring. 

Graduation rates for the class of 2016 increased for African American, Hispanic, and white students, but decreased among Asian, Native American, special education, low-income, and non-native English speaking students. 

The statewide graduation rate is 91.3%, marking a five-year trend that has seen a 3% increase total.

Four-year graduation rate Annual dropout rate 9-12
  All Students   All Students
Class of 2016 91.3%    
Class of 2015 90.8% 2015-16 2.8%
Class of 2014 90.5% 2014-15 2.5%
Class of 2013 89.7% 2013-14 2.7%
Class of 2012 89.3% 2012-13 2.8%
Class of 2011 88.3% 2011-12 3.2%
Class of 2010 88.8% 2010-11 3.4%

While the stats are certainly something to be proud of, it should also be looked at with an eye for improvement.  Last year’s ACT scores for Iowa show that only 31% of Iowa’s ACT test takers met all four ACT College Readiness Benchmark Scores.  An ACT benchmark score is the minimum score needed on an ACT subject-area test to indicate a 50% chance of obtaining a B or higher or about a 75% chance of obtaining a C or higher in the corresponding credit-bearing college courses, as determined by the ACT. 

Additionally, Iowa’s dropout rate increased for the first time since the 2010/11 school year, increasing form 2.5% to 2.8%. 

Iowa is doing a fantastic job of ensuring our students stay in the classroom for a full academic career, giving them the best chance at post-high school success.  Iowans need to also ensure that we’re equipping those students with the skills they’ll need when they leave the high school classroom and enter either post-secondary education or the workforce, a thought echoed by Education Director Wise:  “While graduation is a critical step, we cannot rest until all kids graduate with the skills they need to succeed beyond high school.”

UNI Student Govt
UNI Student Government visiting the Capitol, Matt Johnson, Sam Blatt, Kristen Ahart , and Alyssa Dixon

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