DES MOINES — Iowa House Republicans are proposing a fiscal 2020 budget of almost $7.7 billion, nearly $10 million more than Gov. Kim Reynolds’ budget.
House Republicans are calling for a $7.668 billion general fund budget, which is an increase of less than two-thirds of 1 percent over the current $7.667 billion budget.
The proposed budget increase comes after lawmakers approved the largest tax cut in Iowa history during the 2018 session — $2.86 billion over six years.
The plan released Tuesday would spend 97.45 percent of ongoing revenues. State law limits the budget to 99 percent.
The plan calls for filling all reserve accounts to the statutory limits and “leaves a healthy ending balance” of $298.6 million.
The governor’s budget would leave a $305.9 million ending balance.
The Legislative Services Agency projects a $185.5 million balance at the end of the current fiscal year June 30.
“This is a conservative, responsible budget plan that funds our priorities, limits spending and puts taxpayers first,” said House Appropriations Chairman Pat Grassley, R-New Hartford.
“We have listened to Iowans and this approach allows us to invest in key priorities that they support like education, career training, health care and public safety,” he said.
Senate majority Republicans plan to release their own budget targets.
Senate Majority Leader Jack Whitver, R-Ankeny, said they will not be the same as the House targets, though Grassley expects them to be close.
The targets are guidelines for appropriation subcommittee chairs to work with as they address budget line items. So Grassley couldn’t say where specific spending increases would occur.
The budget is helped by the fact the Legislature repaid about $131 million it borrowed from reserve funds in 2017 to cover revenue shortfalls. Lawmakers made a down payment last year and repaid the rest in the current budget.
Also, legislators are expected to approve a supplemental funding bill to cover about $119 million in mostly one-time Medicaid expenses.
That explains how Republicans plan to increase health and human services spending even though the budget shows a $21 million decrease, Grassley said.
By freeing up those funds, Grassley explained, legislators can make an investment in a nursing home rebate program and help cover a decrease in federal funds for Iowa’s 82 rural hospitals. The rural hospitals had been reimbursed at a rate of 100 percent plus one. The plus 1 percent has gone away.
“So we’re just looking at a way to close that gap,” Grassley said. “We feel that’s a way we can make some investments. Access to health care is important to our caucus whether it’s mental health or health care in general.”
He also noted the nearly $90 million increase in public school funding is not in the education budget but in the year-end standings bill.