Governor Reynolds Reveals Budget for FY 2020 & FY 2021
On Tuesday, Governor Kim Reynolds revealed her plan for state spending in fiscal years 2020 and 2021.
The Governor’s budget proposes to spend $7.6585 billion from the General Fund in FY 2020, which would be an increase of 0.51 percent over her revised FY 2019 budget. Governor Reynolds’s budget spends 97.36 percent of the on-going revenue in the General Fund ($7.8661 billion).
The Governor’s budget includes just one revenue adjustment, a $5 million increase in the Workforce Housing Tax Credit. Implementation of this reduces the FY 2019 on-going revenue amount from the December REC projection of $7.8684 billion to the $7.8661 billion used above.
Among the major items in the Governor’s budget are:
Medicaid – In Fiscal Year 2020, the state will spend $1.409 billion from the General Fund on the regular Medicaid program and the Health and Wellness program. This amount would have been significantly higher, if not for continued improvement in Iowa’s federal Medicaid match rate. The Governor’s budget makes few adjustments to the program, with the two identified changes being an increase in nursing home reimbursement rates and reducing the waiting list for kids waiting to be part of the Children’s Mental Health waiver program.
One key item that is not included is any adjustment in the per member/per month rates paid to the managed care companies. While DHS is considering changing the contract period from the fiscal year July 1 to June 30) to the calendar year (January 1 to December 31), new rates have yet to be set. Additional funds may be needed at some point if the adjustment calls for higher rates.
HAWK-I – For the first time in several years, state funding for the Healthy and Well Kids in Iowa (HAWK-i) insurance program has increased. The additional funds are needed as Congress is returning the program to its normal matching of 75% federal/25% state. For the past few years, HAWK-I had a temporary matching rate adjustment to 95% federal / 5% state due to a provision in Obamacare.
Supplemental State Aid for Schools – Governor Reynolds is proposing that Iowa’s education system would receive $93.4 million in money during FY 2020. The vast majority of this amount – $89.6 million – would be provided to school districts through a 2.3 percent increase in Supplemental State Aid for Schools. Under the Governor’s budget, the state would continue providing qualifying districts with $11.2 million in school transportation funding. Continuing her commitment to increasing access to STEM, the Governor has proposed a $1 million increase for the activities of the STEM advisory council.
Higher Education – State funding for state universities under the Board of Regents, Community Colleges, and the Iowa Tuition Grant program would also receive an increase in FY 2020. Funding to the three state universities would be increased to the level requested by the Board of Regents, with Iowa and Iowa State each receiving a $7 million increase and UNI is getting an additional $4 million. The community colleges are recommended to receive an increase of $4.7 million. Students at Iowa’s independent colleges would benefit from a $1.1 million increase to the Iowa Tuition Grant program.
Future Ready Iowa – One of last year’s major legislative, the Future Ready Iowa program moves into the implementation stage during FY 2020. Governor Reynolds’s budget would make this happen by proposing to provide $17.2 million to the College Student Aid Commission to fund the Last-Dollar Scholarship program. Additional funds would be provided for program administration and the Future Ready Iowa grant program.
Mental Health – Another of the major issues addressed in the 2018 session was improving access to mental health care for adults. The Governor’s FY 2020 budget provides funding to implement these changes, with $6 million committed for increasing the number of regional Access Centers and for additional mobile treatment teams around the state.
The Governor has also proposed the initial stages to fund elements necessary for the creation of a children’s mental health system. In addition to reducing the waiting list for the Children’s Mental Health waiver program in Medicaid, the budget would propose $3 million for training teachers to help detect students’ mental health issues.
To address the need for additional mental health providers throughout Iowa, the Governor is proposing to expand the number of psychiatry residencies at the University of Iowa Hospitals and Clinics by four each year over the next four years. She also is proposing to provide additional funds for training physician assistants and nurse practitioners specializing in mental health care.
Broadband – Governor Reynolds renewed her call for efforts to expand access to broadband throughout Iowa. Her budget proposes $10 million of General Fund money in both FY 2020 and FY 2021 for this purpose, while removing this initiative from the list of projected funded by the Rebuild Iowa Infrastructure Fund.
Technology – For the first time in five years, Governor Reynolds is proposing that funding for technology projects via the Technology Reinvestment Fund come from the General Fund instead of the Rebuild Iowa Infrastructure Fund. The Governor would provide $17,500,000 to the TRF for a variety of projects, including major new computer systems at DHS and the Iowa Veterans Home. Beyond that, the Governor’s budget also moves a number of projects and programs previously funded thru the Technology Reinvestment Fund into the General Fund.
Rebuild Iowa Infrastructure Fund – As part of her budget proposal, Governor Reynolds also released her recommendations for the Rebuild Iowa Infrastructure Fund (RIIF) for both FY 2020 and FY 2021. A significant portion of the RIIF had already been committed by the Legislature last year when it passed a five year, $104.5 million appropriation for major maintenance at state facilities. Also, the Legislature committed to provide $61 million towards the construction of a new $120 million Veterinary Diagnostic Laboratory at Iowa State.
Much like Tulip Time in Pella and Orange City, proposals for significant funding to renovate the State Historical Building are becoming an annual tradition in Iowa. Last session, the Legislature agreed to provide $6.6 million of major maintenance funds to the Historical Building for roof and skylight repairs. And still, the Governor’s office and the Department of Cultural Affairs are back for a lot more. This year, they are requesting a four year, $50 million commitment of RIIF funds. In FY 2020 and 2021, the amounts would be $13.7 million each year. What would be done with these funds is, as was the case in other years, unclear.
Governor Reynolds has also included renovation of the Industrial Technology Center at UNI. This project from the Board of Regents is projected to cost around $41 million. As proposed by the Regents and endorsed by the Governor in her budget, the state would provide $37 million over four years towards the cost of the project while UNI would commit to raising just $4 million. This would go against the new standard for Regents funding, established by the Legislature’s commitment of 50 percent of the funding for Iowa State’s Student Innovation Center and Vet Diagnostic Lab.
Addressing safety issues at the Iowa School for the Deaf is another new item in the Governor’s RIIF budget, as she proposed to use $4.3 million for renovations at Long Hall. The Iowa State Fair would receive $5 million over two years to fund an extensive renovation of the 4H Building. This will be matched by the State Fair Foundation, who is raising $10 million for the project.
In addition to the new projects in the Governor’s RIIF proposal, Governor Reynolds moves some items from RIIF to the General Fund. These include funding for water quality projects and the closure of ag drainage wells, and funding for broadband initiatives.
Fiscal Year 2021 – The Governor also released her budget proposal for FY 2021. General Fund spending would rise to $7.8409 billion. This would be an increase of $182.4 million, or 2.38 percent.
Fiscal Year 2019 adjustments – In addition to proposing budgets for the next two years, the Governor also brought forward some adjustments to the current year’s budget. Unlike the last two years, the changes do not include reductions in spending. Governor Reynolds is asking for supplemental appropriations of $144.5 million. The funds would go to the following programs:
• Medicaid – $141.1 million
• Indigent Defense – $2.5 million
• Dept. of Administrative Services state building utilities – $0.5 million
• Law Enforcement Academy relocation expenses – $0.5 million
• IPTV 24 hour broadcasting – $0.1 million
The size of the Medicaid supplemental is larger than many had expected, as the state incurs one-time costs from the first contracting period. These costs, agreed to by then-Governor Branstad and his staff, were incurred to address issues with reimbursement for certain services and Amerihealth’s withdrawal from the program which forced the remaining two MCO’s to pick up additional clients. Another one-time factor is the Obamacare rule that Medicaid managed care companies have to pay the Cadillac tax. While Congress has waived this ridiculous requirement for calendar year 2019, the state still has to cover these costs for calendar year 2018.
The one-time costs account for over half of the supplemental amount. This will mean that the on-going Medicaid costs will not be as high as the adjusted FY 19 Medicaid budget.
It is possible that the Medicaid supplemental may change, if DHS goes forward with the switch to contracting with the MCO’s on a calendar year basis. That change would start with calendar year 2019.
The release of the Governor’s budget proposal represents the firing of the starter’s pistol on the annual budget process that dominates each legislative session. Budget subcommittees will have their organizational meeting this Thursday, with the close examination of the details of Governor Reynolds’ proposal starting next week.
IDALS Secretary Naig Announces Leadership Team Position
On Monday, January 14, 2019, the Iowa Department of Agriculture and Land Stewardship (IDALS) issued a press release in which Iowa Secretary of Agriculture Mike Naig announced several employees who will serve in leadership positions at the IDALS. The announcement came as Naig takes the oath of office as the 15th Iowa Secretary of Agriculture this week.
Below is a list of Department leaders:
• Julie Kenney, Deputy Secretary. Kenney joined the Department in March 2018 and oversees budget, policy and personnel. Prior to joining the Department, Kenney had been active in the agribusiness industry. She and her family farm in Story County.
• Steve Moline, Division Director, Consumer Protection and Industry Services; Food Safety and Animal Health. Moline joined the Department in 2011. Prior to that, he was an Assistant Attorney General in the Environmental and Agriculture Law Division of the Iowa Attorney General’s office.
• Bernardo Granwehr, Division Director, Administration. Granwehr joined the Department in January 2019. He provides legal counsel, manages information technology, and oversees facilities and the administrative rule making process. Prior to joining the Department, Granwehr served for 14 years as Chief of Staff and Legal Counsel to State Auditors David Vaut and Mary Mosiman.
• Susan Kozak, Acting Division Director, Soil Conservation and Water Quality. Kozak also serves as Mines and Minerals Bureau Chief.
• Communications Director – to be announced
• Maison Bleam, Federal Liaison and Policy Advisor
• Jake Swanson, Legislative Liaison
• Lexi Marek, Executive Assistant to Secretary Naig
• Dr. Jeff Kaisand, Acting State Veterinarian. Dr. Kaisand also serves as Assistant State Veterinarian.
• Dr. Justin Glisan, State Climatologist
• Robin Pruisner, State Entomologist
• Paul Ovrom, State Horticulturist
A complete staff listing can be found at the Department’s website.
In December, it was announced in the week prior to Christmas that the Iowa State Veterinarian Dr. David Schmitt who for the last nearly 20 years has worked with IDALS in the animal health aspects of the department that he will retire on Jan. 10, 2019. Dr. Schmitt has been with the Department since 1999 and has served as the State Veterinarian since December 2007. Dr. Jeff Kaisand, the current Assistant State Veterinarian for Iowa, will serve as the acting State Veterinarian during the search for a permanent replacement.
Dr. Kaisand has been with the IDALS since 2013. Dr. Schmitt led the Department’s Animal Industry Bureau, which oversees regulation of animal movement, exhibitions, importation and disease eradication/control efforts. The state veterinarian also plays an important role in preparing for and responding to any foreign animal disease or natural disaster concern. The Bureau also regulates certain commercial companion animal breeders and retailers.
IDALS Presents Renewable Fuels Marketing Awards
On Tuesday, January 15, 2019, the Iowa Department of Agriculture and Land Stewardship (IDALS) issued a press release in which Iowa Secretary of Agriculture Mike Naig announced that Casey’s General Stores and Quick Oil Company are the 2019 winners of the Secretary’s Ethanol and Biodiesel Marketing Awards. The awards were created by IDALS the Iowa Department of Agriculture and Land Stewardship to recognize fuel marketers that have gone above and beyond in their efforts to promote and sell renewable fuels.
Secretary Naig observed, “Casey’s and Quick Oil Company have shown great leadership and commitment to marketing our homegrown renewable fuels. I am very proud to recognize the investment they have made to not only our renewable fuels industry, but the environment and Iowa economy as well.”
School Funding and the Governor’s Proposed Increase
The beginning of the legislative session this week marks the beginning of the discussion about next year’s school funding. The legislature is required to establish school funding increases within 30 days of the delivery of the Governor’s budget, which occurred on Tuesday of this week.
School funding increases are portrayed by a % increase to the State Cost Per Pupil (SCPP) which represents the amount the state school funding formula sends to each district for each student. This % increase is known as Supplemental State Aid (SSA). For the 2018/19 school year, the SSA increase was 1%, creating a SCPP for the school year of $6731.
The Governor in her budget proposal has proposed a 2.3% increase in SSA. Here’s how those numbers shake out:
As a total increase to school funding from the state, 2.3% equates to an increase of $89.6 million, bringing to the total state aid to schools to just shy of $3.3 billion.
There are a few assumptions in the Governor’s numbers.
1) She proposes continuing at the same level the AEA reduction that has occurred in previous years, which equates to $15 million;
2) She proposes continuing the property tax increase pickup from the state (called the Property Tax Relief Payment or PTRP), which equates to an $11.1 million increase.
Both of those are figured into the final increase number of $89.6 million.
House Republicans are proud of the continued year-over-year investment in our schools. Republicans expect to provide another increase in funding to continue our focused efforts and sustained commitment to education in this state.
Recapping Iowa’s Positive Education Report Card
House Republicans have made some significant investments into our state’s education system over the past 8 years. As we begin to look at school funding numbers for next school year, it’s worth recapping some of the good that has occurred recently.
• Funding is up 31% ($2.45 billion to $3.21 billion, a $763 million increase)
• Post-2008 recession, this is the 9th best in the nation for increased funding (Center on Budget Policy Priorities study). 29 states were still providing less total school funding per student than they were in pre-recession 2008. Iowa was ranked 9th with a 4.9% increase, inflation adjusted, since 2008.
• This funding increase includes over $60 million in property tax relief
• It also includes $150 million plus (annually) for the Teacher Leadership Compensation (TLC) program, a program that is widely liked by districts that helps spread good teaching practices around the building through collaboration, breaking down the “siloed” classroom and is seeing results
• Funding is outpacing inflation. A KCRG story earlier this year found that the amount the state spends on a per student basis from FY11 to FY17 should have been $6539, based on inflation. It was actually $6591, $52 higher than inflation.
• Figuring in local taxes and federal funds, districts on average get $11,213 (FY18) up from $9554 (FY13), a $1659 increase
• Eased bureaucratic burden by providing flexibility for existing dollars, allowing districts more local control of some funds to better meet district needs
Teachers and Salaries
• More teachers in the classroom. In 2012/13 there were 34,226 teachers – in 2016/17 there were 36,279 = 2053 increase
• The teacher-to-student ratio has decreased from 13.91 to 13.37
• Salaries have increased from $52,635 to $58,287 = $5652 increase
• National rank improved from 26th to 22nd on salaries from 2012/13 to 2015/16
• KCRG story found salaries outpacing inflation. Cedar Rapids specific, but indicative of everywhere. In FY11 the teacher average salary was $55,000. With inflation, that would translate to $62,000 today. But the actual average salary is $69,000.
• A report from NPR, in collaboration with a nonprofit called EdBuild, took a look at teacher pay across the country and how it compares when adjusted for cost-of-living in each state. What it found is that Iowa ranks 8th in the country at $60,868 adjusted.
Securing our Schools
• Legislation passed last year requires every school in the state to have a high-quality security plan in place, coordinating with local law enforcement and emergency management agencies to draft the plan and conduct drills.
• Legislation also allowed districts additional flexibility of funds to hire school security staff through existing funds that couldn’t previously be used for this purpose, keeping general fund dollars in the classroom (At-Risk/Dropout Prevention)
School-Based Mental Health – HF 633 and HF 2441
• House Files 633 and 2441 provide school districts with the flexibility and authority to fund mental health professionals, including mental health counselors and psychologists, through existing funding streams. This gives schools additional pathways to hire such individuals and ensures that students are able to get the support they need and that schools are able to afford those supports.
• Suicide Prevention – SF 2113 – continuing education training for K-12 educators and coaches annually on suicide awareness and prevention, as well as adverse childhood experiences. This bill will help Iowa’s schools recognize the signs of a mental health crisis and refer those children to the appropriate services before they hurt themselves or others.
DNR Reminds Confinement Site Applicators of Training
On Thursday. January 4, 2018, the Iowa Department of Natural Resources (DNR) issued a press release in which it touts an opportunity for Iowa small business owners to be involved in DNR air quality requirements. The State of Iowa and DNR continue to look for interested individuals to appoint as members to the Clean Air Act Compliance Advisory Panel (CAP), as established in Iowa Code section 455B.150.
The CAP is one of three components that make up the Small Business Environmental Assistance Program (SBEAP) established by the Clean Air Act Amendments (CAAA) of 1990. The CAP provides advisory opinions on the effectiveness of the small business stationary source technical and environmental assistance program (currently administered by the University of Northern Iowa and DNR, respectively). The CAP also reviews information developed for small businesses.
The CAP is comprised of seven (7) individuals meeting the following requirements:
• Two Governor appointees with an interest in air quality that are not small business owners (to represent the general public)
• Four legislative appointees with an interest in air quality to represent owners of small businesses. Each legislative appointee must be a small business owner or represent a small business, and may not be a current member of the Iowa General Assembly.
• The Director of the DNR or the Director’s designee.
The DNR has provided outreach for several years to populate the CAP. However, the required number of members to convene the CAP have not been appointed to date. If you would like to be considered for appointment to the CAP, please refer to the following resources:
• Governor Appointed (must not be a small business owner or representative and must apply through the Governor’s Boards and Commission website)
• Legislative appointee (must be a small business owner or represent a small business) – Please contact your local legislator to be considered for appointment.
More information about CAP and SBEAP is available at www.iowadnr.gov/airsmallbusinessassistance. Private organizations and local governments may apply. For more information visit http://www.iowadnr.gov.
DNR Grants to Help Improve Local Lakes, Rivers, and Streams
On Thursday, December 13, 2018, the Iowa Department of Natural Resources (DNR) issued a press release in which the state agency announced that it is now accepting pre-application questionnaires for grant funding that helps locally-led groups develop water quality improvement efforts in Iowa communities.
Offered by the DNR’s Watershed Improvement Program, Watershed Planning Grants help local groups passionate about improving water quality create a nine-element Watershed Management Plan, which identifies problems in the watershed and proposes solutions for better water quality. The pre-application period remains open until close of business on Feb. 28, 2019. Pre-application documents are available at www.iowadnr.gov/watershed.
State of the Judiciary
On Wednesday, Chief Justice Mark Cady, delivered the State of the Judiciary to a joint session of the Iowa Legislature. This is his 9th time addressing the legislature.
Throughout his speech, the Chief Justice focused on the future of Iowa Courts and the ways technology can make the courts more accessible for everyone. The Electronic Data Management System (EDMS) is up and running in every county and has created the first in the nation electronic filing system. Now, the courts are thinking further ahead and working on multiple initiatives to make the courts more accessible through technology:
• Access to Justice Initiative — will increase the availability of online access to court information. The goal of this initiative is to allow Iowans, who choose to represent themselves in court, have access to courts and legal information online.
• Digital Opportunities Initiative — has projects for electronic search warrants, text notices to defendants reminding them of trial times, interpreters and other essential services that can now be performed online.
Specialty Courts were also a focus of the Chief Justice’s speech. Business courts, family courts, veterans courts, drug court, mental health courts and others are helping improve lives throughout the state and helping vulnerable Iowans with specific needs. The Problem Solving Courts Initiative will allow the Courts to track and analyze data from all 39 specialty courts. Analyzing this data may help ensure successful specialty courts are expanded throughout the state. A Rural Courts Initiative will also be launched to ensure the courts are providing best services to rural counties as well and removing barriers that prevent access.
In his speech, Chief Justice Cady highlighted why Iowans can be proud of their court system. As technology changes, Iowa Courts are working to lead the nation in online processes to make the courts accessible to all Iowans.
Chronic Wasting Disease Confirmed in Dubuque County
The following information came from the Iowa Department of Natural Resources:
Fourteen tissue samples from wild Iowa deer tested positive for chronic wasting disease (CWD) during the fall, bringing the total testing positive in Iowa to 44.
Eight positive deer were confirmed in Allamakee County, four in Clayton County, one (plus two suspects) in Wane County and, for the first time one in Dubuque County. More than 6,800 tissue samples have been collected during the 2018 deer season. The DNR contacted each hunter whose deer tested positive and collected the meat and any remaining bones and tissue.
CWD was first confirmed in the Midwest in Wisconsin in 2001 about 75 miles from the Iowa state line, and has since been confirmed in every other state bordering Iowa. The Iowa DNR began monitoring for the disease in 2002 with an emphasis on counties nearest where it is confirmed in the wild and has tested more than 74,000 deer since. The disease was first confirmed in Iowa near Harpers Ferry in Allamakee County in 2013.
CWD is a neurological disease belonging to the family of diseases known as transmissible spongiform encephalopathies or prion diseases. It attacks the brain of infected deer causing the animal to lose weight, display abnormal behavior, lose body functions and die. It is always fatal to the infected animal.
Governor Makes Recommendations for Rebuild Iowa Infrastructure Fund
Governor Kim Reynolds presented her Condition of the State on January 15th. She laid out a number of policy and budgetary proposals. This article will focus on the Governor’s recommendations for the appropriations to the Rebuild Iowa Infrastructure Fund (RIIF).
The Governor’s recommendations removed a number of items from RIIF that had previously been funded out of this budget. A few examples of this include broadband improvements ($1.3 million) overseen by the Chief Information Officer, water quality initiatives ($5.2 million) and agricultural drainage wells ($1.87 million) that were administered by the Iowa Department of Administrative and Land Stewardship. The largest item that was removed from the RIIF budget was the Technology Reinvestment Fund which was $14.4 million in FY 2019.
The Governor recommended that this line item should be placed back into the General Fund. The Technology Reinvestment Fund was created in FY 2007 and was to be paid out of the General Fund. However, over time, it has only been paid out of the General Fund in FY 07, FY 08, and FY 15. However, the FY 15 funding was appropriated by the Legislature, but due to a veto by the Governor the money was appropriated by the General Fund.
The Governor recommended a number of new appropriations to RIIF. The largest new appropriation is for the State Historical Building at a price tag of nearly $50 million over four years. She also recommended appropriating $1 million to construct the Iowa Independence Innovation Center at Camp Sunnyside (Easter Seals). The Governor recommended a follow-up appropriation for an expansion at ChildServe in Johnston for $1.2 million, last year the Legislature appropriated $500k to ChildServe.
There was also a recommendation for “County Justice Center Furniture and Equipment” for $743K (FY 20) and $1.3 million (FY 21). She also recommended $1.75 million for the Iowa State Patrol to purchase new aircrafts. She appropriated $4.3 million for renovations to the Iowa School for the Deaf.
A few other notable recommendations includes nearly $39 million over four year for an expansion to the Industrial Technology Center Renovation at University of Northern Iowa, $5 million (over FY 20 & FY 21) to renovation the 4H Building at the Iowa State Fair and $14.2 million over two years for mechanical and electrical distribution and pharmaceutical management and health support at the Veteran’s Home.
Being a Representative is a humble and exciting journey and I am very proud to represent the people of District 5. I would like to thank you for your support and I look forward to hearing from you and working with you to make your voice heard on what matters most to our district. If you have any comments, questions, or concerns please do not hesitate to contact me at email@example.com.