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Legislators are now entering the final two weeks of the 2017 legislative session. There is still a lot of work to do, including making some very tough decisions about next year's budget.  It is going to take a lot of work if legislators want to wrap things up by April 18, when their daily expenses run out.

One thing slowing progress down is the condition of our state's economy. A slow economy means less is collected in taxes.  Fewer taxes paid means less money is available for things like education, Medicaid, tax reform, and water quality. Because the state doesn't have enough money to go around, the Governor had to revise his budget requests for next year.  Here are a few highlights from the Governor's revised budget:

  • The Governor borrows $131.1 million from the state's "rainy day fund" to help make it through the current fiscal year (which ends on June 30, 2017).  The Governor will repay these funds over two years - $104.8 million next year (FY18) and $26.3 million the following year (FY19).  
  • The Governor's new budget for next fiscal year (FY 2018) spends $7.284 billion, an increase of $24 million from the current year (after deappropriations and transfers). This is a decrease of $173.3 million from the budget the Governor presented earlier in the year.  The Governor's budget continues commitments made in prior years to pay for local government property tax cuts and adds $40.1 million to pay for commitments made to K-12 education.
There is a bit of good news in the slowing economy.  Iowa's Medicaid match rate was changed, saving the state $40 million.  The federal government will now pick up 59% of the state's Medicaid costs; up from 56% this year. You can read more about this change here.  But that is a drop in the bucket when it comes to the $1 billion Health/Human Services Budget.
There isn't a lot of detail available, but you can see the Governor's recommendations for the Health/Human Services budget here. The Governor cuts funding to state departments, but does not tell the departments how to make those cuts. That makes it hard for us to kniow what the impact of these cuts will be.  Here are a few highlights:
  • The Department of Public Health is cut by another $573,334.  This is $2,9 million (5%) less than what was originally appropriated to the department last session.  This department funds the state's brain injury program, direct caregiver support, epilepsy education, and health workforce shortage programs.
  • Medicaid is cut by $17.4 million.  But this is actually a $32.4 million cut below what was origianlly appropriated for Medicaid.  While the Governor recommends adding $34.5 million in new funds to pay for expected growth in the system, it is balanced by cuts, including the use of $22 million in one-time funds.   
  • Elminates $3 million paid to Scott County and Polk County to make up for shortfalls in their mental health and disability services (MH/DS) levies.  These funds were considered "one time" finds, because a permanent fix to the MH/DS system was to be passed this year. 

There isn't a lot of detail in the Governor's recommendations, but you can see more below:

  • Click here for the Governor's recommendations.
  • Click here for the the non-partisan Legislative Service Agency’s (LSA) review of the Governor's recommendations. 
  • Click here for the LSA's review of the Governor's HHS recommendations.
Legislative leaders announced this week they plan to spend a total of $7.245 billion - which is $38 million less than the Governor's revised budget.  Leaders announced their targets on Wednesday (April 5), but there is no detail beyond the targets for each budget subommittee.  Here is a quick review of the House/Senate joint budget targets:
  • Administration and Regulation:  $47.39 million
  • Agriculture and Natural Resources: $38.84 million
  • Economic Development: $38.41 million
  • Education: $908.41 million
  • Health and Human Services: $ 1.766 billion
  • Justice Systems: $734.95 million
  • Standings: $3.711 billion
  • TOTAL: $ 7.245 billion
Many of our readers are interested in the Health/Human Services (HHS) budget, because that is where Medicaid, managed care, and waiver programs are funded.  Here is a quick look at the total spending levels recommended for this area:
  • Joint HHS Budget Target: $1.766 billion
  • Governor Revised FY 18: $1.787 billion
  • Governor Original FY18: $1.862 billion
  • Revised FY17: $1.794 billion
  • Actual FY16: $1.9 billion
As you can see, the Joint Health/Human Services Budget Subcommittee has less money to spend this year. Joint legislative targets for HHS are:
  • $28 million less than REVISED FY17.
  • $21 million less than Governor’s revised FY18 budget request.
  • $96 million less than original Governor’s FY18 budget request.
  • $134 million less than actual FY16 expenditures.

What does this mean for you?  It’s not time to panic, but it is go time! Now is the time to reach out to your legislators and tell them what is important to you in the state budget and how cuts in those programs/services would impact you.  Use our grassroots action center to contact your legislators now.