Opportunities and Challlenges

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Opportunities and Challenges

Our work to enact policies that move Iowa forward continued this week as we spent many hours on the floor in debate.  We passed several bills this week that will benefit the majority of Iowans and make our state a great place to raise a family or grow a business.  Here are a few of the highlights:

School Funding Flexibility:  As I’ve written about many times over the last several weeks, House Republicans are committed to providing our schools with more flexibility.  Since session began, we’ve worked closely with school boards, superintendents, and other school officials to find ways that we can loosen restrictions on funding and allow schools to utilize unused funds that are typically reserved for specific purposes.

This week the House passed House Files 564 and 565 to provide our schools with that increased flexibility.

House File 564 provides schools with new allowable uses for funds that are restricted to certain purposes.  For example, this bill will allow schools to use money that’s intended for professional development to be spent on textbooks and student assessments.  Over the past few years, professional development has often been included with new textbooks or assessments.  This has caused many schools to accumulate large balances within their professional development funds.

House File 565 allows school districts to create a new “Flexibility Account” that can collect unused dollars from other funds that build up large balances and can’t be used for that specific purpose.  The dollars collected in this new fund can then be used for other purposes that a school may have in different area.

These bills recognize that no two school districts are exactly alike and will allow each school district to better meet the specific needs of our students and teachers.

Supporting Families with Autistic ChildrenHouse File 215 addresses the unique challenges parents of children with autism face by extending insurance coverage for autism treatments to Iowa families.  Coverage for autism can be very expensive but early therapy is very beneficial for future growth.  This legislation ensures access to programs with proven, positive outcomes in the child’s development.

Privacy Protections for the 21st CenturyHouse Joint Resolution 1 extends Fourth Amendment privacy protections to Iowans’ electronic communications and data, ensuring Constitutional rights keep up with today’s technology.

Reining in the Federal GovernmentHouse Joint Resolution 12 calls for a Convention of the States to address the power and jurisdiction of the Federal Government.

The Revenue Estimating Conference (REC) also met this week and gave their latest revenue projections for the current fiscal year (FY17) which ends June 30, and next fiscal year (FY18) which begins July 1.  The REC, our non-partisan group that sets revenue estimates, lowered their previous projections for both the current fiscal year and next fiscal year.

The REC lowered the current year’s revenue projection by $131 million.  This is in addition to the $117 million in reductions that we had to make at the beginning of this session.  With only about three months left in the fiscal year, finding $131 million in savings and efficiencies would be incredibly difficult at this point.  This means that we will likely need to use the state’s Cash Reserve Fund to make up the difference.  House Republicans will have a plan to repay this before we adjourn for the year.

The REC also lowered their revenue forecast for FY 18 by $191 million.  This leaves about $6 million worth of new revenue compared to the current year’s budget.  We have already approved an additional $40 million for K-12 schools and Medicaid costs are expected to increase by about $42 million.  This will require us to review every line item of spending, as well as every tax credit, in the budget to find savings and efficiencies.

Something that we will need to figure out is how we can get more accurate revenue estimates.  When the Legislature is setting the budget, we need reliable forecasts to set a spending plan that avoids the possibility of mid-year budget reductions like we dealt with earlier this year.  We understand that much of this is out of the control of the REC as several other states are currently working through budget difficulties and inaccurate revenue projections.  Going forward, we’ll work with members of the REC to find solutions to make our revenue forecasts more accurate and reliable.

As the session continues to move along, please stay in touch.  Please let me know your thoughts as different bills or issues arise.  You can reach me at linda.upmeyer@legis.iowa.gov or (515) 281-3521.

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