Governor Branstad released revisions to his proposals for the Fiscal Year 2018 and Fiscal Year 2019 budgets on Tuesday, as well as his proposal to address the anticipated budget shortfall in FY 2017.
To fill the $131.1 million shortfall in the current FY 2017 budget, the Governor is proposing to transfer $131.1 million from the Cash Reserve Fund. The Governor repays those funds by expecting that the Revenue Estimating Conference projection will be correct and that the FY 2018 ending balance of $104.8 million would flow into the Cash Reserve Fund. He then proposes to appropriate the remaining $26.3 million to the Cash Reserve Fund in FY 2019.
For Fiscal Year 2018, the Governor has called for the state to spend $7.2836 billion from the General Fund. This is an increase of $24 million over the revised FY 2017 budget. Funding for K-12 education remains the same as what was agreed to in this year’s Supplemental State Aid bill, an increase of $40.1 million over FY 2017.
Major changes in the proposed budget are found in the Department of Human Services. The Governor is now expecting costs to grow by $34.5 million in FY 2018, down from the $42 million projection in his initial budget. The Governor has also lowered the increase he is proposing to fund for nursing home cost rebasing, from $7.6 million to $2.5 million. The Governor’s revised budget includes a number of Medicaid cost containment initiatives to be implemented in FY 2018. These efforts cover the expected cost growth in the program and additional funding needed for the Family Investment Program, child care assistance, and child and family services. The Governor’s revised budget also lowers appropriations to the various DHS institutions.
Funding for the Education budget appears to take a $50 million reduction in FY 2018, but this is due to the last part of Teacher Leadership funding - $51 million – being shifted into the school aid formula. There are some reductions to the Department of Education programs and services. Funding for higher education is slightly reduced, as the Governor proposes a $1.2 million reduction to community colleges and a total of $3 million in reductions to the state’s three public universities. Funding for the Iowa Tuition Grant program, helping students at the state’s private colleges, is unchanged by the Governor.
For the Justice Systems and Courts budgets, funding for the Department of Corrections is reduced by $1.2 million. The Department of Public Safety receives an increase of $2 million over its revised figure for the current year. The Courts budget remains the same as it is currently, at $175.7 million.
One of the bigger changes in the Governor’s proposal is to have the Technology Reinvestment Fund paid out of the Rebuild Iowa Infrastructure Fund, instead of the General Fund. This has resulted in the Governor reducing his requests for funding to the State Historical Building maintenance, state park maintenance, and funding to local airports. The Governor did not make any changes to the funding for the Student Innovation Center at Iowa State University.
Governor Branstad also revised his budget proposal for FY 2019. The Governor now expects to increase spending in that fiscal year by $236.5 million. This maintains the proposal for 2 percent in Supplemental State Aid to schools and provides a 2 percent increase to higher education. The budget also assumes a $78 million increase in Medicaid costs in FY 2019 as well as moving Technology Reinvestment Fund to the General Fund.
As always, please join me at one of my legislative forums in April:
April 7th @ 8:00 – Corydon – Farm Bureau
April 7th @ 10:00 – Chariton – Mosaic
April 7th @ 12:00 – Osceola – Lakeside Casino
April 7th @ 2:00 – Leon – Community Center