Gov. Terry Branstad and his financial officials have advised executive branch departments to plan for status quo funding in fiscal 2014, but the first presenters Monday in the process of shaping next year’s state budget came looking for more money, in light of several austere years and a state treasury sporting a hefty surplus.
Richard Sorey, director of the Iowa Department for the Blind, warned of program cutbacks and staff reductions if his agency doesn’t get an extra $550,000; Iowa Student Aid Commission officials submitted documents with both status quo funding and a hoped-for 4 percent across-the-board funding increase; and Iowa Board of Regents officials and university presidents pushed for a 2.6 percent increase in operations and millions of dollars more for capital improvements and special projects.
“It’s not surprising,” Branstad said of the growing list of funding increase requests. “They know the situation the state’s in, that we’re in a much-healthier position than we’ve been in in a long time and that’s kind of the nature of the beast. They always ask for more money.”
He said the joke among governors is that when it comes to higher education funding, “it’s one of two things – it’s either we have declining enrollment, we need more money, or we have increasing enrollment, we need more money. That’s kind of the way it is, but you’ve got to wade through that and set priorities.”
Branstad said he expected selected budget areas will be targeted for state funding increases that grow the economy, create jobs, improve education and boost family incomes, while other areas will maintain current funding levels or be asked to be more efficient or more productive with existing resources. He said the budget he unveils in January may require some reorganizing or combining of programs that result in fewer commissions and fewer agencies.
Rep. Cecil Dolecheck, R-Mount Ayr, who will serve as co-leader of the House-Senate education appropriations committee, said Monday’s budget askings “appear to be reasonable” but he cautioned that state budgetmakers did not want to return to an era when spending was increased only to be followed by across-the-board cuts when economic conditions soured.
Monday’s budget requests were not unexpected. Initial askings for fiscal years 2014 and 2015 under the state’s two-year budgeting framework were due earlier this fall, and directors and boards overseeing the various state departments and agencies had put in for nearly $357 million in increased spending for the new 2014 fiscal year slated to begin next July 1. That’s a 5.7 percent increase over the estimated $6.227 billion spending level for the current fiscal year. The requests for fiscal 2015 were $153.6 million on top of that.
Part of the driving force behind the increased requests is the fact that state government closed its fiscal 2012 books with a $688.1 million surplus after its cash reserve and economic emergency funds were filled to the statutory maximum of nearly $596 million, according to an analysis by the nonpartisan Legislative Services Agency. That projected surplus is slated to go even higher this fiscal year with a positive ending balance of $768 million estimated to be in place when the current fiscal year ends next June 30.
The preliminary budget assumptions do not include collective bargaining costs, and do not factor in potential federal funding and tax policy changes facing Congress and the president early next year. State Department of Management officials have estimated the cost of providing pay increases to all state employees based on initial requests from state unions could range from $122 million to $156.97 million in fiscal 2014 and up to $159 million in fiscal 2015, but the state has not given its counter offer in a collective bargaining process that requires an agreement by mid-March or the issues go to binding arbitration.
Branstad also had indicated that negotiations between Congress and the president regarding federal tax and spending issues will impact state decisions, as well as the Dec. 15 projections issued by the state Revenue Estimating Conference. The 85th General Assembly is scheduled to convene its 2013 session on Jan. 14 and Branstad has indicated he plans to submit his budget plan for fiscal years 2014 and 2015 one day later when he delivers his Condition of the State address to a joint convention of lawmakers in the House chambers.
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