Capitol Update for December 2015

I cannot believe we are just a few days from Christmas.  It seems like I was just writing my wrap up for the end of the session.  During the interim I was name the Agriculture Committee Chairman.  I have been busy meeting with different agriculture groups to discuss policy.  It has been a learning experience.  I met with the Turkey Federation to hear about Avian flu.  I also discussed water quality with the soybean and corn growers.

After the holidays, the start of the session will quickly be upon us.  January 11th will be the opening day of the session.    The budget will be the main focus of the session.  We will try to set school aid funding early on and then build the rest of the budget around it.

Budget

The House Majority is going to continue budgeting like Iowa families. Our budgeting principles have served the state well and created stability and predictability for those that rely on state services.

The State’s economy is strong, but growth is slowing. There is no economic emergency, but with slow growth we are going to have to be very strategic with the commitments we make.

The Revenue Estimating Conference (REC) set the official revenue estimate that will serve as the basis for the General Fund budget deliberations next session.  The REC determined that General Fund revenue for FY 2017 will be $7.3274 billion.

The FY 2017 projection anticipates additional growth in Iowa’s economy, just not at the level some were hoping for.  The estimate of $7.3274 billion means that the state would have $153.1 million in revenue above the FY 2016 budgeted level of $7.1743 billion.

Below is how this amount is calculated:

FY 2017 Revenue Estimate            $7327.4 million

MINUS

FY 2016 General Fund Expenses      $7174.3 million

EQUALS

FY 2017 New Revenue                    $ 153.1 millions

The REC is continuing to project revenue growth in both FY 2016 and FY 2017.  In the current year, personal income tax and sales and use tax collections are expected to be even stronger than previously projected.  And in FY 2017, this growth will continue.  Corporate tax collections are slowing, as low commodity prices continue and the strength of the dollar is a headwind on exports.  But this downtrend looks to lessen in

FY 2017.  Iowa’s economy, while facing some turbulence, is still growing this year and is expected to remain on the growth path into FY 2017.

Medicaid Modernization

Medicaid is the single biggest threat to the state’s ability to fund core functions like education, public safety and the courts.  We have done too little to address this in the past.  Reform isn’t optional, it’s necessary.  Medicaid spending has grown rapidly over the last ten years and is crowding out other programs.

Governor Branstad has proposed a managed care model to be implemented.  This approach is already being used in 39 other states.  It presents an opportunity to provide services more efficiently and sustainably.

It is important that the state provide Iowans with information and is responsive in addressing their questions and concerns during this change.  If you are not receiving information or need help in your decision making process, please feel free to contact me.  I will try to put you in touch with someone who can answer your questions.

With the program start dates being moved back it will give everyone more time to study the information and hopefully make the best decision for their situation.

As you read this, I hope you are able to spend time with your family and enjoy the season. Wishing you a Merry Christmas and a Happy New Year.

If you have any questions, comments or concerns about these topics or any others please feel free to contact me by e-mail at lee.hein@legis.state.ia.us or by phone at (319) 480-1997.

Sincerely,

Rep. Lee Hein

 

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