Govenor’s budget

By Jon Dunwell

Last week, Governor Reynolds unveiled her proposal for next year’s state budget. A key request is significant new funding for K-12 education. The Governor’s proposed Fiscal Year 2025 General Fund budget spends $8.9191 billion starting July 1, 2024. This is an increase of $367.1 million or 4.29 percent over the adjusted FY 24 budget of $8.552 billion. Her budget proposes the following.

Raising starting teacher salaries to $50,000 with a minimum salary level of $62,000 for teachers with 12 years in the classroom. She also provides $10 million from the state’s American Rescue Plan funding to create the Merit Teacher Incentive Fund.

Her budget includes a 2.5% Supplemental State Aid increase for Schools (SSA) for the next school year, taking the per pupil amount to $7,826, which is $191 higher than the FY 2024 level. Finally, it provides $5 million in grants to help support new or high-performing charter schools.

For Medicaid, it provides an additional $75 million. Nearly half the money is expected to pay for increase in costs through the managed care contracts. The proposed budget completes the transition of the Glenwood State Resource Center and provides additional funds to expand access to community-based services. Case management services receive an increase, as would some provider groups.

The state’s judicial branch, corrections, and public safety agencies get an additional $24.2 million in the new fiscal year. The courts will receive an increase of $3.7 million while the Department of Corrections gets an $11.8 million boost. Funding to the Department of Public Safety rises by $4.6 million.

The Rebuild Iowa Infrastructure Fund proposes spending a record-setting $293.2 million in Fiscal Year 2025. The utility project at the Woodward State Resource Center will be sped up along with full funding for an expansion of the State Medical Examiner’s office in Ankeny, renovations at the Civil Commitment Unit for Sexual Offenders at the Cherokee Mental Health Institute, and $10 million for a renovation of the Lucas State Office Building. Finally, it includes an increase in funding for major maintenance of state buildings.

The Governor’s budget documents also revealed the final appropriation numbers for spending on Supplemental State Aid and Education Savings Accounts for the 2023-2024 school year. Education Savings Accounts ended up spending $127.9 million in FY 24, which is $20.5 million higher than the LSA estimate when the bill was passed. Supplemental State Aid ended up being $13 million higher than what was estimated during the 2023 legislative session. These two figures are why the adjusted FY 2024 budget is $33.5 million higher than the amount approved last May.

With the release of the Governor’s budget proposal, the legislative work of formulating next year’s state budget begins. Budget subcommittees commence their deliberations starting on Wednesday, January 17.