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Your Capitol Voice: Slow progress on education funding
by Bobby Kaufmann, State Representative · Op-Ed · April 23, 2015
When the Revenue Estimating Conference (REC) met on March 19, the committee lowered the revenue estimate for the next budget year.
The REC projected that the state’s General Fund will take in $6.7674 billion through June 30, 2015. This was lower than their December 2014 estimate of $6.8571 billion, due to changes made this session in a bill aimed at matching Iowa’s tax with the Federal tax code.
The REC also issued a revised estimate for the current budget year and some people are twisting those numbers to say the state has more new revenue than it actually does.
Some claim the state is experiencing 6-percent revenue growth. The reason for this is they are taking the difference between the projected revenue for FY 2015 (6.7674 billion) and the projected revenue FY 2016 ($7.1755 billion). When this is done, one finds an increase of $408.1 million, or 6 percent. But there is a problem with this calculations — the FY 2016 budget will be built from the actual spending levels on programs in FY 2015, not the REC’s revenue projection for that year.
The actual amount of additional revenue that will be in Iowa’s budget next year is $180.9 million. This number comes from subtracting the actual spending in FY 2015 — $6.9946 billion — from the FY 2016 revenue estimate. That gives the state a 2.59-percent increase. Overestimating the amount of growth is dangerous. This will lead to cuts to specific areas such as higher education, Medicaid, or public safety — or maybe even an across-the-board cut. Either way, overestimating is very poor fiscal policy.
I am incredibly frustrated with the lack of positive progress in the conference committee dealing with educational funding. There is no reason a compromise can’t be reached.
Some still are twisting the numbers to make the revenue available seem higher than it is. Others refuse to move on an initial percent growth offer. I believe both sides need to give. I will continue to advocate for progress to the 10 members of this committee.
There has been progress on the expansion of PPEL funds for school districts. Educational revenues from physical plant and equipment levies (PPEL) are used primarily for the purchase or lease of transportation related equipment such as school buses or tractor/mowers. House File 384 /House File 646, especially helps the smaller more rural schools who have high transportation costs by giving them more flexibility, allowing them to also use PPEL revenues for the repair and maintenance of such equipment when those expenses exceed $2,500 and were purchased using PPEL funds.
The bill applies to school budget years beginning on or after 32 July 1, 2015. This flexibility allows more general fund monies to be used for teaching expenses. Having passed our Ways & Means subcommittee, it will now be brought to the full House for consideration. I am strongly in favor of this bill and will add my voice to bring this to a floor vote.
The issue of Medicaid funding is a complex one and has seen a tremendous increase in costs and resources. It is a huge worry for future budgets.
Iowa’s Medicaid is funded from both the Federal Government and the State, which pays up to 50 percent, currently around $20 to $25 million a month. Of the beds in our nursing facilities, 52 percent are occupied by those on Medicaid.
Occasionally the reimbursement rate paid to the hospital has to be recalculated based on utilization and inflation. The Chairman of the House Human Services budget, Rep Dave Heaton, said the necessary appropriation to fully fund hospital rebasing requires about $8.2 million. He also said that with the demand for new funding in all areas extremely high and the governor’s proposed budget $154 million more than the expected State revenue, there are some very difficult decisions ahead. Having talked to Rep Heaton, he is fully aware of the need for additional funding for our local hospitals. With funding education as our highest priority, we will have to wait and see how our remaining budget gets allocated.
I appreciate the tremendous amount of feedback from all of you. I am listening.
You may contact Rep. Kaufmann at bobby.kaufmann@legis.iowa.gov, 515-281-3221 or 1527 330th St. Wilton, IA, 52778
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