Vander Linden Capitol Update – March 23, 2017
House Republicans kept charging forward with our pro-taxpayer agenda. We have also passed legislation giving more control back to our local school districts. Below you will find some helpful information concerning some issues the legislature is addressing you may have.
State Budget Outlook
The State Revenue Estimating Conference (REC) met last week and lowered expected FY 17 revenues. That comes after the REC had already lowered expected FY 17 revenues in December by $117 million.
Inaccurate revenue projections are not limited to Iowa. At least 30 states nationwide have had to make budget reductions in the middle of their fiscal year.
Gov. Branstad has proposed using money in the state’s Cash Reserve Fund to make up for this second reduction in FY 17 state revenues. If that happens, $131 million will need to be borrowed and paid back.
The House Republican plan to deal FY 17 and FY 18 with this is threefold:
1. First, taxpayers and the Legislature need more accurate revenue estimates from the Revenue Estimating Conference.
2. Second, a very hard look needs to be taken at the “what” and “where” taxpayer money is used to make sure Iowans are getting the best value and their priorities are being met.
3. Third, every tax credit is on the table With only a few months left in the fiscal year, additional budget reduction opportunities are limited. This likely means that the Legislature will have to dip into the Cash Reserve Fund. House Republicans will not adjourn session without a plan to repay the Cash Reserve.
Spending for FY 18 will be lower than FY 17. That means real reductions, not lower than expected increases.
Thankfully, House Republicans rejected over $1 billion in additional spending plans offered by Democrats over the last two years. Without that strong stand, key areas like local school budgets would be facing deep cuts. Iowans can count on House Republicans to stand strong against reckless government spending ideas.
Interestingly, House Democrats have suggested spending more is the best way to deal with this problem.
Local School Budgeting Flexibility
House Republicans are committed to providing flexibility to locally elected school boards by loosening funding restrictions and allowing for more local decision making. Several school districts have a significant amount of funds sitting in accounts that go unused because they are limited to specific purposes.
No school district is the same, and they each face their own unique challenges and opportunities. We should loosen funding strings and allow schools to spend some of these funds in the way that meets students’ needs and fits their individual districts best.
HF564 loosens restrictions regarding This bill makes changes to a number of funds, including Professional Development funding, At risk and Dropout funding, Preschool funding, PPEL (Physical Plant and Equipment Levy) funding, and Talented and Gifted (TAG) funding, by adding additional allowable expenses that are meant to help the funding further the goals of the program.
HF 565 creates a new “Flexibility Fund.”
School district funds have narrow parameters that prohibit certain funding streams from being utilized fully. As a result, school districts accumulate unused funds that grow year after year. There are currently over 74 identified sources of funding that school districts statewide have leftover funds in to the tune of over $146 million in FY 2015 (a $17.5 million increase over FY 2014). Much of this funding cannot be touched or used.
HF 565 collects some of this funding and creates additional spending authority for districts to use those funds in a broader fashion, but still in the direction of the original source of the funding.
