DES MOINES | New state laws and spending will be crafted over the next four months as legislators convene for the 2018 session of the Iowa Legislature, which begins Monday.
Here are a half-dozen key issues facing state lawmakers as they being their work.
Enacting some kind of tax reform, or tax cuts, remains one of the top priorities for statehouse Republicans who gained unfettered lawmaking control after the 2016 election. Senate President Jack Whitver, a Republican from Ankeny, called it a once-in-a-generation opportunity.
Federal tax reform has provided the state with some extra revenue: an estimated $106 million in the state budget that will be crafted during the session, plus another $138 million in the ensuing budget year.
Multiple top statehouse Republicans have said that extra money should go back to state taxpayers in some form of tax relief. Although Rep. Pat Grassley, who leads the House’s budget committee, cautioned against treating the windfall like the state has “won the lottery.”
Republicans have given few details about what their tax reform plan will look like, but they promised a plan is coming.
“In my opinion, this won’t be a successful session unless we have a significant tax bill get accomplished,” said Bill Dix, leader of the Senate Republicans.
One key challenge facing statehouse Republicans hoping for tax cuts is a tight state budget. According to numbers produced by Grassley, the state has little new money for the next state budget, and most of that has already been spoken for in automatic increases and department requests, although those can be tweaked or rejected.
Democrats in the minority say they are willing to support tax cuts, but not at the expense of busting the state budget or if the proposal benefits wealthy wage-earners more than middle-class and low-income workers.
“Their tax packages that we have seen in the past have not been beneficial to everyday Iowans,” said Janet Petersen, leader of the Senate Democrats. “With the budget our state is facing, knowing that all of us will be coming back and Republicans will have to fix the budget mess we’re in, it seems like this is not a wise time to be cutting taxes when they’re busy cutting essential services that Iowans count on and our public education system.”
Revenue coming into the state continues to increase, but at a rate lower than projected the past few years. As a result, for a second consecutive year, the governor and state lawmakers must make spending cuts in the middle of the budget year.
More than $30 million in adjustments must be made to the current state budget year, which runs through June 30.
And the state is already on the hook for more than $100 million to repay to its reserve accounts funds that were used to close a budget hole in the previous year.
“I’m expecting another tight year,” said Charles Schneider, a Republican who leads the Senate budget committee.
Few issues facing the state are more polarizing than the privatized management of the state’s $4.7 billion Medicaid program for low-income Iowans and those with severe disabilities. Providers have complained that they are not being reimbursed sufficiently or in a timely fashion, and patients and caregivers say some services have been reduced or eliminated.
Republican leaders, including Gov. Reynolds and House Speaker Linda Upmeyer, said this week they are open to legislative solutions to improve the managed care program. But Reynolds remains steadfast that the program should not return to state management.
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“We’ve made mistakes. The rollout was not perfect. But it’s the right thing to do,” Reynolds said. “While mistakes have been made, I believe we can work with the Legislature and I look forward to working with the legislature.”
Medicaid reimbursement also figures into mental health care access, another issue statehouse leaders hope to address during the session.
“The problem is that in many areas in the state, there are no services in the community to support their needs,” said Rep. David Heaton, who leads the House’s health care budget committee. “There’s no housing, there’s no community services available.”
The governor and a panel of lawmakers during the interim conducted separate examinations into how to address opioid addiction, a growing issue in Iowa. During the session, they will consider such measures as requiring physicians and prescribers to check a database to prevent addicts from getting addictive painkillers from multiple places, a Good Samaritan law that protects anyone who seeks help for an addict in crisis.
Another state budget year likely means a small increase in state funding for public K-through-12 school districts, if any increase at all.
K-12 public school funding increased by 3 percent or more just six times in the first 38 years under the state’s current funding formula; it has increased by that much only once in the past eight years.
Despite that, Iowa is bucking a national trend: only three states increased public school funding by a higher rate between 2008 and 2015, according to an analysis from the Center on Budget and Policy Priorities.
Last year’s increase was 1.1 percent; this year’s may be in the same ballpark, or lower.
“We’re hearing everything from a 0 to 2 percent increase. I’m anticipating more toward the zero end because of what we’re dealing with the budget,” said Rep. Mary Mascher, a Democrat from Iowa City who serves on the House education committee.
Legislators have spent the past few sessions trying to find new or redirected funding for programs and projects designed to improve the quality of the state’s rivers and lakes. Iowa is one of the biggest contributors of pollutants that are flowing down the Mississippi River and killing marine life in the Gulf of Mexico.
The Senate and House each approved their own proposals in 2017, and leaders this week pitched their chamber’s as the best. Whether the two sides, both Republican-led, can agree on a compromise remains to be seen. And Gov. Reynolds, also a Republican, said she does not plan to express which proposal she prefers.
The Senate version would have appropriated $744 million split among several pots or silos for water quality, nutrient reduction and water and wastewater treatment, while the House plan called for $513 million and included a bonding feature designed to expand funding opportunities.
Boosting the credentials of Iowa’s workers remains a top priority for Reynolds and legislative leaders as they continue their efforts to address the state’s skills gap: half of the jobs in Iowa require “middle skills,” but only a third of workers possess those middle schools, according to a 2012 state report.
Reynolds continues to promote her Future Ready Iowa program, which has the goal of 70 percent of the state’s workforce having post-high school education or training by 2025. She hopes to propose new funding for the program to support grants and apprenticeships, and promote more partnerships between educational institutions and businesses in need of workers.
The governor’s goal has bipartisan support among lawmakers, although the parties must find common ground in supporting programs designed to achieve the goal.
“One of the things that Iowans are asking for is the ability to help them move their skill set up to the next level, to be able to build their career and increase their earning capacity for themselves and their families,” Petersen said.