Iowa Senate plans $52 million in budget cuts, hitting universities, courts and human services

Iowa Senate Republicans are proposing $52 million in budget cuts for the current state fiscal year that will hit hardest the budgets at state universities and community colleges, the state's justice system, and human services.

State officials immediately responded Thursday with dire warnings of negative impacts.

State Courts Administrator Todd Nuccio issued a statement that said courts in 30 county courthouses across Iowa will be forced to close if the spending reductions become a reality and court personnel will be eliminated statewide. The courts selected for closure will be determined by caseload volume, he said.

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Iowa Board of Regents Executive Director Mark Braun said "severe cuts" of $19 million for Iowa's three state universities will cause disruptions on campuses, because the second semester is already underway.

However, the spending adjustments would have no impact on state appropriations for K-12 schools or the state's Medicaid health care program for low-income people.

Republicans who control the Senate defended the cuts as prudent measures to comply with legal requirements to maintain a balanced state budget.

“What hurts the Iowa economy is when you have a higher-than-realistic expectation on the taxpayer. We are not going to the taxpayer for more and more of their hard-earned money," said Iowa Senate Majority Leader Bill Dix, R-Shell Rock. "Iowans are making difficult choices with their families every day. We are going to recognize that they sent us here to recognize that truth."

Minority Democrats criticized the reductions and maintained that on fiscal issues, Republican leadership is damaging the state's ability to provide a skilled workforce for employers and will force tuition increases for college students.

Senate Minority Leader Janet Petersen, D-Des Moines, said Republicans had pledged a growth agenda on the campaign trail that would create 200,000 new jobs and increase family incomes, but instead they are offering "a massive budget cut" that will hurt many Iowans. Her view was shared by Sen. Joe Bolkcom, D-Iowa City.

"Iowans don't manage their family budgets like this; if they did, they would be in bankruptcy," he said.

The Board of Regents took what appeared to be a defiant stance, officially registering in opposition to the Senate budget bill. However, Braun said the Board wants to work with legislators and Gov. Kim Reynolds to lessen the impact of the spending reductions.

"As the state of Iowa is focusing on high-demand jobs, degree attainment and the biosciences economy, cutting the public universities to this degree goes in the opposite direction of achieving these goals," Braun said. "The public universities are key drivers in all three of these areas and are critical to the future economic success of our state."

The University of Iowa will see a loss of about $8.7 million. Iowa State University faces a cut of $6.9 million. The University of Northern Iowa will lose more than $3.7 million under the Senate plan.

In addition, Iowa's community colleges face a reduction of $5.4 million in general aid, and the Department of Education faces a cut of about $1.7 million.

In other areas, the Department of Human Services would see a reduction of $9.9 million, including a $6.6 million cut for administration and $2.2 million less for children and family services. Meanwhile, the Iowa Judicial Branch, which operates the state's court system, would have spending pared by $4.8 million, while the Department of Corrections would lose $3.4 million.

Nuccio said that because 96 percent of the Judicial Branch budget represents personnel costs, the options are limited for making cuts. If courts are closed, he cautioned the period of closure will be indefinite.

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The budget changes, which are included in Senate Study Bill 3089, are needed to fill a revenue gap for the current state fiscal year, which ends June 30, 2018, for state general fund spending that will total about $7.2 billion. The state's economy is growing, but revenues have increased less than forecast, as least partly because of a slump in Iowa's farm sector.

Reynolds had recommended about $35 million in spending adjustments. But Republicans who control the Senate went further to provide a slight cushion to ensure there is a balanced state budget.

The Senate proposal was approved Thursday by Senate Appropriations Committee on a 13-8 vote along party lines, with all Republicans in favor and all Democrats opposed. The bill was sent to the Senate floor for debate next week, but not before a pointed partisan debate occurred among the budget panel.

"Frankly, I don't think we should be in this situation right now," said Sen. Nate Boulton, D-Des Moines. He called the situation a "manufactured budget crisis," faulting Republicans for "failed planning" that is forcing Republicans to repeatedly cut the state's budget.

Sen. Julian Garrett, R-Indianola, challenged Democrats to provide more specifics.

"You have no plan, no response," he said. "It is easy to criticize, but we have a plan to respond in a sensible way and all that you are saying is 'No, no, no.'”

The House is still developing its own blueprint for budget cuts, but Dix said he believes it will be very close to the Senate proposal.

Sen. Charles Schneider, R-West Des Moines, chairman of the Senate Appropriations Committee, said the Senate plan would leave the state's general fund with a balance of about $35 million at the end of the state's fiscal year.

"We wanted to be at a place where we felt comfortable that we wouldn’t have to come back and do another de-appropriation or borrow money from the cash reserve fund or economic emergency fund" at the end of the fiscal year, Schneider said. He added that the budget adjustments meet the spirit of Iowa's 99 percent limit on state spending.

House Speaker Linda Upmeyer, R-Clear Lake, said Thursday the House was still working on its plan for spending reductions.

“We’ve made cuts to the budget over the years when we’ve needed to, so things that we might have considered not as difficult to eliminate have been eliminated,” Upmeyer said. “Now, we’re working really hard to make sure that we’re finding savings where we need to that will affect as few people as possible.”

Upmeyer said the House likely would recommend cuts deeper than those proposed by Reynolds in an effort to ensure more cuts aren’t needed later this year. But she said the House plans to avoid any cuts this year to K-12 education and Medicaid.

“We all agreed that K-12 education would be not cut,” Upmeyer said. “It would be really difficult for them to make adjustments to any budgets at this point. And additionally, the caucus is not excited about doing any cuts to Medicaid. We think we need to move forward and make sure we have some more of the bumps worked out before we do that. So I think that’s something that’s unlikely to be included.”

The state is expecting a small influx of state revenue this year as a result of federal tax reform. Reynolds recommended absorbing that additional money into the budget to help avoid cuts. However, Upmeyer said the House plan may not use that extra revenue.

“That’s not money that’s in the door yet,” Upmeyer said. “We want to make sure that we’re not counting on something that may or may not be there. But we’re looking at everything.”

Reynolds didn't offer any judgment when asked by reporters Thursday about the Senate's budget reduction plan, suggesting it was simply "part of the process" of addressing state spending. She said she had tried to minimize the impacts of budget cuts higher education in her budget plan, but she offered to work House and Senate leaders to reach a consensus.

The Register's Mackenzie Ryan contributed to this report.