By Jon Dunwell
The end of this week will close the second Funnel Week — all bills will need to have passed through one of the chambers. A greater amount of time will be spent finalizing the budget for Fiscal Year 2024. The numbers from the Revenue Estimating Conference continue to look stronger than previously anticipated. That’s good news for Iowa and our budget work. Don’t forget, we are only allowed to budget up to 99 percent of the revenue estimate, a pretty normal occurrence at one time. This year I anticipate it being blow 90 percent.
Why not increase our spending to 99 percent? Here are a few of our considerations.
• We anticipate income reductions over the next few years due to…
- The elimination of retirement tax
- The phase-in of the 3.9 percent flat tax
Our percentage number will creep up into the 90s as we allow Iowans to keep more of their money through tax cuts.
• We never again want to be in the position where we were a decade ago when a 10 percent across-the-board budget cut was mandated because of a lack of revenue. Today we have a strong balance sheet with fully funded emergency and economic downturn funds as well as a healthy Tax Payer Relief Fund. We stand ready to fund our existing and future priorities in the midst of economic uncertainty, and as stated earlier, return more of your money.
• We continue to prepare for certain eventualities. We see increased budget percentages in Medicaid spending. Today it accounts for over 19.2 percent of our total budget with the anticipation of continued growth. The 6.2 percent enhancement from the Covid emergency is quickly coming to an end.
• Finally, we always want to have the space and opportunity to fund priorities of Iowans. Even as we discuss the future of property taxes, part of our discussion resides around returning some of the dollars held in the Tax Payer Relief Fund.
We continue to have healthy discussion around issues that matter to Iowans. Last week significant votes were taken around Carbon Capture Pipelines, Teachers Bill of Rights, Property Tax Cuts for Commercial Child Care Centers, Midwife Licensure, Expansion of the Safe Haven Newborn Act, Inclusion of the Phone Number for Your Life Iowa Program on the back of student IDs, and much much more. Let’s keep the conversation going.