The Iowa Senate Appropriations Committee approved a bill that would cut the state’s remaining fiscal year 2018 (which ends June 30, 2018) budget appropriations by nearly $50 million, with more money redirected from special funds to the state’s general fund.
The state’s remaining fiscal year 2018 budget is approximately $34.7 million short, due to slower than anticipated revenue growth in the state, and stagnant-to-lower prices in the agricultural market. In order to avoid drawing more money from reserves and to keep the government running, the state must make cuts to the budget.
Earlier this month, Governor Kim Reynolds recommended approximately $27 million in cuts in her fiscal year 2018-2019 budget. Cuts included $1.8 million from community colleges, approximately $5.1 million from the Board of Regents (which oversees Iowa’s three public universities), approximately $3.3 million from the Department of Human Services, and $10 million from the Department of Human Services Medical Assistance. Reynolds also recommended a $1.6 million cut to the judicial branch.
Dave Roederer, director of the Department of Management said that under Reynolds’ proposal, the state would ultimately need only $19.4 million in cuts, as the department is anticipating approximately $11.2 million in windfall from federal tax reform, as the results of the new tax code mean that Iowans will have a higher tax liability to the state. Roederer also said that the state is anticipating a Medicaid adjustment from the federal government which means that the state would have to spend less on the program. This proposal leaves the general fund with an ending balance of $3.6 million for fiscal year 2018.
According to the Senate appropriations bill, the committee won’t be relying on the $11.2 million in tax windfall to make up the difference for fiscal year 2018, and does not make Reynolds’ $10 million in cuts to to the Department of Human Services Medical Assistance budget. The bill also makes no cuts to K-12 funding, rather cuts $1.75 million from the Department of Education.
The bill targets the Board of Regents, cutting approximately $19 million to Iowa’s public universities (approximately $8.67 million from the University of Iowa, $6.91 million from Iowa State University, and $3.74 million from the University of Northern Iowa). The bill also cuts approximately $5.44 million from the state’s community colleges. The next largest cuts are to the Iowa Department of Human Services (approximately $6.63 million) and the judicial branch (approximately $4.83 million), whose workforce was cut this year by 10 percent, with over 115 positions unfilled, including 11 district court judgeships. According to a statement issued by an Iowa Court Administrator, 96 percent of the Judicial Branch’s budget is personnel costs. With the proposed cuts to the branch, there is a projection of closure to over 30 county courthouses.
While the bill makes nearly $50 million in cuts, the bill also includes several line item transfers of appropriations back to the general fund for fiscal year 2018, including $7 million from the Iowa Skilled Worker and Job Creation Fund.
The case for such a large number of budget reductions is to create a buffer in case revenues continue to come in lower than currently estimated, and so money does not have to be borrowed or cut, again, according to Republican legislators. The state already borrowed and owes $13 million from a transfer from emergency accounts in 2017.