DES MOINES — Legislative Republicans proposed Thursday to spend $182 million less than Gov. Terry Branstad’s $6.242 billion budget plan for next fiscal year and about $119 million under majority Senate Democrats’ targets by providing less money to education, human services and economic incentives and requiring state employees and elected officials to pay $200 a month for their health insurance coverage.
All three competing and contrasting fiscal 2013 budget approaches offered by the governor and leaders of the split-control Legislature would fully fund spending commitments already approved last session, including a 2 percent “allowable growth” increase for K-12 public schools next school year.
House Speaker Kraig Paulsen, R-Hiawatha, said Republicans’ general fund increase would keep spending in line with state tax collections, recognize the uncertainty of future federal funding to states, and send a message to businesses that they can expect economic stability and no tax increases.
However, Senate Majority Leader Mike Gronstal, D-Council Bluffs, said Republicans were offering a “job-killing budget” that undercuts investments in job training, makes higher education more expensive and “walks away” from $25 million in business incentives the governor championed.
“We have to send a signal to employers that we have our act together. We think this budget does that. They’re not going to have to be worried about a looming tax increase,” Paulsen told reporters in outlining a $6.06 billion spending plan. The Republicans are calling for $20 million in government efficiencies and savings, reducing funding for many small state agencies to 90 percent of current levels, and requiring all government employees, including themselves, to contribute $200 a month to help defray the cost of their health insurance. That assessment would save $42.9 million next fiscal year but would require that unionized state workers agree to reopen the second year of their collective bargaining pact and accept the concession, he said.
The GOP spending targets would fully fund property tax credits for local governments with an extra $55 million that the governor did not include in his budget plan outlined on Jan. 10. Republicans who hold a 60-40 majority in the House also proposed to cut educational funding to regent universities, community colleges and other areas by $34.7 million, which would be nearly $81 million below Branstad’s recommendation but would incorporate the money the governor requested to begin his multiyear education reform process.
Meanwhile, Gronstal advocated for a nearly $6.219 billion budget plan unveiled by majority Senate Democrats that would boost state spending by 3 percent for the fiscal year beginning July 1.
Last month, Branstad proposed a roughly 4 percent boost in state spending for fiscal 2013.
“I don’t believe there’s any item in the differences that I see between our budget and the governor’s budget that can’t be resolved and resolved in a timely fashion,” said Rep. Scott Raecker, R-Urbandale, chairman of the House Appropriations Committee.
Sen. Bob Dvorsky, D-Coralville, chairman of the Senate Appropriations Committee, said the Senate plan sought to spend $25.2 million less than the governor proposed, an approach that includes a commercial property tax cut geared to helps Iowa’s small businesses and new workforce training to reduce Iowa’s skilled worker shortfall. The plan also calls for increased state support for Iowa’s local schools and a $25 million tax cut for working Iowans by raising the earned income tax credit from 7 percent to 13 percent.
The Senate proposal would shift another $120 million in state cigarette/tobacco revenue from the general fund to a health care trust, a move Dvorsky said mirrors what House Republicans promoted last session to fund Medicaid expenses and would free up more general fund money to direct to education, human services, public safety and other priorities.
“I’m not sure everything is apples to apples at this point,” Dvorsky said in comparing the three fiscal 2013 spending approaches.