Branstad Proposes More Spending

By Rod Boshart, Reporter

DES MOINES, Iowa – Gov. Terry Branstad on Tuesday proposed a $6.5 billion state budget for fiscal 2014 that would provide a 4.3 percent increase in spending that mainly would go to boost funding for education, human services, local property tax credits, corrections and economic growth initiatives.

The main features of Branstad's spending package includes multi-year commitments to reduce commercial/industrial property taxes while capping growth for agricultural and residential classes at 2 percent – a commitment to draw down surplus funds that would begin at $74 million in fiscal 2015 and grow to $347 million by the time the plan is fully implemented in fiscal 2019. The governor's budget blueprint also calls for spending $207 million to fully fund local property tax credits and having the state pick up 100 percent of the funding increases for K-12 schools as part of his effort to provide the largest cut in property taxes in Iowa history.

Branstad is proposing to permanently reduce commercial and industrial property tax values by 20 percent over a four-year period and to provide direct funding for local governments to replace 100 percent of the property tax revenue so the effort to reform and reduce property serves as an investment in Iowa families and small businesses that does not come at the expense of cities, counties and school districts.

The spending proposal that Branstad presented to lawmakers with his Condition of the State address covers increases for Medicaid and mental health redesign programs and money to open new prisons at Fort Madison and Mitchellville. Additional money also is proposed for community colleges and for regent universities to fund operations, freeze tuitions and work with the school's foundations to finance tuition set-asides for needy students, according to Branstad aides.

The governor's budget plan also requests legislators to provide $41 million in supplemental funding for the current year to finance Medicaid programs and aid counties by providing $8 million in transition funds as they convert to a regionalized service delivery system. Branstad also is proposing to increase environmental funding by $4 million and to provide $500,000 to hire five new people to inspect livestock facilities while redirecting other staff to address water-quality concerns raised by Iowa citizens and the federal environmental regulators.

Branstad is proposing to permanently reduce commercial and industrial property tax values by 20 percent over a four-year period and to provide direct funding for local governments to replace 100 percent of the property tax revenue so the effort to reform and reduce property serves as an investment in Iowa families and small businesses that does not come at the expense of cities, counties and school districts.

On Monday, the five-term GOP governor detailed a five-year, $187 million education reform proposal that would increase pay for new educators – from a minimum of $28,000 to a minimum of $35,000 in the next five years – and redo career paths for teachers previously approved in 2001 but never adequately funded. He hoped the changes would garner the respect the teaching profession deserves but he signaled that he expects lawmakers to approve the reforms before talks turn to education spending.

To that end, the governor did include any new money in his fiscal 2014 budget plan for what traditionally has been "allowable growth" for K-12 schools. Budget director David Roederer said that funding level would come after the reforms have been signed and could bump up the 4.3 percent increase for next fiscal year or requiring reductions in other budget areas to accommodate the K-12 state aid increase.

Likewise, no new money was included in the budget proposals for state employees wages and benefits – much of which is still the subject of collective bargaining with two unions who represent state workers, Roederer said. For the most part, the remainder of the fiscal 2014 budget represents status quo funding for other governmental agencies and programs.
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