A report from the capitol
Smith, Edler discuss state budget, tax reform, Medicaid at MEA forum
The 100th day of the 2018 state legislative session came and went last week, and two local lawmakers shared updates from the ongoing work at the Iowa State Capitol Saturday.
“I think that probably, when this (forum) was scheduled, the hope was we would be done,” said state House Minority Leader Rep. Mark Smith, D-Marshalltown, to the small Marshalltown Education Association (MEA) legislative forum at the Marshalltown Public Library. “We came back into session last week and did two days of what we call ‘non-controversial’ legislation.”
He said Republican leadership in the House and state Senate don’t yet agree on how the Fiscal Year 2019 state budget should look.
“The last report that I got, late Friday afternoon, was that there are still no agreements on budget,” Smith said, adding the matter is set for debate in the House this week. “So far, they’re not joint targets; the House has voted out of the appropriations committee several budget bills … I don’t know if they’re going to continue to debate those without agreement from the Senate or not.”
State Sen. Jeff Edler, R-State Center, also attended Saturday’s forum.
“There has been some trial and tribulation … probably not so much getting the (budget) targets together, I think they were a lot closer on their target,” he said of leadership in both legislative chambers. “It’s where they were (proposing) spending the money is where the issue came; even for the last couple weeks, I’ve known that the targets were not far apart.”
Tied to the budget discussion is the Republican-led plan to reform the state tax code. Like the budget, there are multiple ideas about how tax reform should happen.
“With one tax plan, I would say you have to do the tax plan before you formulate the budget; with the other tax plan, you need to do the budget to formulate the tax plan,” Edler said. “One of the things that really worries me with the tax reform is when you have two plans that are very different and you try to compromise, when you’ve taken two years to put together one plan …. it makes me really nervous to see things kind of thrown together at the very end.”
On the potential for tax reform, Marshalltown Schools Superintendent Dr. Schutte said lawmakers should keep some things in mind.
“I think that needs to be very transparent, as we laud the corporate tax reductions, somebody is paying for that,” he said.
Edler responded to Schutte on the topic of a corporate tax break.
“I would just like to clarify that the corporate tax piece of this is very small, compared to the individual tax piece; this is an Iowan tax package out of the Senate, not a corporate tax package,” he said.
Schutte said that tax reform plan would have consequences for local entities.
“But it shifts the burden of assessing that tax to local communities or school districts versus the state taxing it,” he said to Edler, who responded with “There is a component of that, I’m not going to disagree.”
Concerns about state backfill funding from the state, meant to offset lost commercial property tax revenue from cuts made in 2013, were also discussed.
“That’s $500,000 less coming into our district to help support things that we currently have,” Schutte said of the potential long-term impact a loss of backfill funding would have on the district. “There are only one or two ways that gets taken care of: we cut $500,000 in spending, or we ask our local resident property tax payers to increase their taxes in order to accommodate the state’s decision to do away with that.”
Smith agreed with Schutte.
“That leaves the option of either cutting those services in the community, or else increasing property taxes, which is a more regressive tax,” he said.
Edler said if a backfill reduction must happen, it should be done with care.
“If it’s got to happen, we need to have an equitable approach to it; there are some communities, their tax base has exploded, they don’t need the backfill anymore,” he said. “There are some communities it hasn’t … and my district has many of those communities, that we’ve been slow on growth.”
He said he advocated for not cutting the backfill this year.
Schutte also discussed Gov. Kim Reynolds’ Future Ready Iowa educational initiative and potential legislation in that area. He commended lawmakers for making things like computer science education and financial literacy priorities.
However, he added there could be issues for some districts if Future Ready Iowa recommendations are made into requirements with the current education funding situation.
“My concern is that, in almost all those cases, whether you’re a large or or small district, additional resources are going to be required in order to fulfill those,” Schutte said, adding “In order to avoid the claim of these being unfunded mandates, there’s an assumption that we can just re-purpose existing staff into those (instructional) positions.”
He said Iowa school districts have experienced a “record low” level of long-term funding in the last decade or so.
“Many of us have been moving in ways of not requiring funding in order to use some of that learning,” Schutte said, using the Junior Achievement program and business-education partnerships as local examples. “To meet the recommendations for Future Ready Iowa, is absolutely going to require additional resources to fully implement that, from where we’re at today, even with partnership with local community colleges and stuff to pull that off.”
One non-education subject discussed at the forum was potential fixes to the state’s privatized Medicaid system.
“I don’t see much happening on it this year,” Smith said of such fixes. “There was some oversight passed through the House and Senate, additional oversight on the program; but, I’m still getting quite a few complaints on the quality of service.”
Edler said he disagreed with Smith on the subject.
“I think there are things going on in this session, with the budget for next year, that are addressing more and more of those concerns,” he said. “A lot of the people that I’ve talked to, that were having problems in the past, (have said) that the nearby billing has not been near as much of an issue; it’s still some of that six- to 12-month-old stuff, when they started up, trying to fix those breakdowns in the system.”
Edler also said he is in opposition to a proposed public measure bill, which would put limits on when elections for things like bonding or local option tax elections could occur.
“I’ve taken a lot of heat from my own party on this … I’ve been very outspoken, actually, to the local schools and counties and cities on this issue,” he said. “I will not back that; I think we need to let cities, counties, schools decide those.”
Smith said he agreed with Edler on the public measure bill.
“Thank you for taking the heat on that,” he said.
Schutte also said he opposes the bill.
“That’s extremely beneficial when you have a number of different entities,” he said. “Generally speaking, we work together to try to stagger and strategically pursue those so that they’re not competing against each other, or that it’s the right time, if there is such a thing, to ask the local communities for support of a bond referendum and that sort of thing.”
To follow legislation through the Iowa Capitol, visit https://www.legis.iowa.gov/
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