During his Condition of the State address, Governor Branstad laid out his budget proposal for Fiscal Year 2015. Each year, the Governor’s budget proposal is the first step in the appropriations process, and House Republicans will again conduct a line-by-line review of the proposed budget to ensure that taxpayers’ dollars are wisely spent.
Each of the past three years, the budget passed by the Legislature has ultimately spent less than what the Governor initially proposed. I am confident this will once again remain true. One of my core principles has always been that we will not spend more than the state collects in revenue.
Iowa taxpayers deserve a balanced budget, and it should be the expectation of the legislature each and every year. It only takes one undisciplined budget to destroy the progress that we have made, and I am committed to continuing our success.
The Governor’s budget for the coming fiscal year proposes spending $7,000.9 billion from the state General Fund. This is slightly above the Revenue Estimating Conference’s December ongoing revenue estimate of $6,983.2 billion. The Governor’s proposal represents a $505 million increase over the previous fiscal year.
Some Iowans were initially concerned that the Governor’s budget proposal called for spending more than the ongoing revenue projection. This spending difference is approximately $27.7 million of the $7 billion budget, a difference I am confident we will resolve.
The increase in the Governor’s budget is driven largely by the cost of last year’s property tax relief bill and our education reform package. The federal government’s Medicaid matching formula also dictates another $86 million increase. Due to Iowa’s strong economy and federal changes to the financing formula, the state’s share of Medicaid is at an all-time high.
Major changes to this year’s budget also include Governor Branstad’s Homebase Iowa veteran’s initiatives and funds for another tuition freeze at our Regents Universities. Included is a proposal to eliminate the state income tax collected on military pensions. This tax cut for our veterans would result in a $10 million reduction in ongoing revenue for FY 2015.
House Republicans are looking forward to working with Governor Branstad and the Senate to put together a budget that keeps Iowa in a strong financial position, for this year and into the future.