Governor Branstad Releases Budget Recommendations

On Tuesday, January 10, Governor Branstad released his recommendations for the FY 2013 budget.

The Governor’s goals for his budget are to create 200,000 jobs, raise family incomes by 25 percent, make Iowa #1 in education again and reduce the cost of government by 15 percent.

The Governor recommends appropriating $6.244 billion, or $240 million more than adjusted FY 2012 appropriations. This is a 4 percent increase over FY 2012. Total appropriations are $230 million more than adjusted FY 2012 but that does not take into account operational and program reversions.

Available ongoing revenue for spending is estimated at $6.251 billion therefore the Governor’s budget spends less than the state takes in, a key budget tenet of House Republicans. The expenditure limitation is $6.475 billion but that includes the FY 2012 ending balance. House Republicans have insisted that this one-time ending balance money not be used for ongoing spending.

The bulk of the increase in the FY 2013 budget is as follows:

Medicaid ($49 million) Mental Health ($20 million)
K-12 school funding (25 million) Economic Development ($25 million)
Regents ($20 million) Education Reform ($17 million)
Prisons ($14 million) Judicial Branch ($10 million) *
Peace Officer Retirement ($5 million) Community Colleges ($4 million)

* The Governor is required by law to pass through the Courts’ budget request

Most line items funded at 50 percent last session have been increased to 100 percent of their FY 2012 levels. There isn’t any funding for salary increases and will likely result in a reduction in state employees.

One exception to this is the prison system. The Governor recommended a $6.5 million supplemental appropriation for prison salary and benefit costs. This is carried forward into FY 2013, meaning that the prisons get an additional $7.5 million for a total of $14 million. This is needed to pay for raises agreed to by former Governor Culver and to avoid massive layoffs that would compromise public safety.

In addition, the Governor has promised to find between $40 million and $60 million in efficiencies in the Road Use Tax Fund in order to increase funding for road construction and bridge repair.

House Republicans appreciate that the Governor released his budget this early in session and will be doing a thorough line-by-line review of it in order to give it the serious consideration it deserves.

House Republicans will examine the budget with three goals in mind: jobs, savings and certainty. An efficient and effective state government should contribute to instead of sapping the energy from Iowa’s employers and families.