William Petroski, and Brianne Pfannenstiel

Des Moines Register

Gov. Terry Branstad is responding to a shortfall in state revenue by cutting $173 million in spending from a budget blueprint he previously proposed to the Iowa Legislature for the fiscal year that begins July 1.

Branstad aides released a revised budget package Tuesday night that totals $7.283 billion for fiscal year 2018. That's a decrease of 2.3 percent compared with the budget the Republican governor proposed in his Condition of the State address in January. It's almost flat when compared with the revised current fiscal year spending plan of $7.259 billion.

The Iowa House and Senate are already en route to developing their own spending plans for the upcoming fiscal year, but the governor's recommendations are influential in shaping the overall state budget. For the 2019 state fiscal year, which begins July 1, 2018, Branstad has recommended a revised state budget of $7.52 billion, up 3.2 percent over his revised budget for the prior year. State officials say Iowa's economy is still expanding, but a slump in Iowa's farm sector and other factors have hampered overall state revenue growth.

The revised budget for the coming fiscal year maintains the governor's recommendations for water quality funding and will allow the Iowa Department of Public Safety to conduct a training academy to hire additional state troopers, Branstad spokesman Ben Hammes said in a statement. In addition, the revised document does not require the closing of any state prisons or state mental health institutions. It also plans for the state to fully repay $131 million to the state's cash reserve fund over the next two years that was needed to balance the current state budget.

The biggest reduction from the governor's previous budget proposal is in health and human services funding, which faces a decrease of $86.2 million. Proposed education spending would be decreased by $58.4 million, while administration and regulation would be pared by $19.4 million. The judicial branch would see a reduction of $7.8 million and the Legislative Branch would be trimmed by $4.6 million compared with the earlier proposal. Agriculture and natural resources would decline by $1.2 million and economic development, about $600,000 less. The justice system would see an increase of $4.9 million.

The University of Iowa would face a $5.3 million cut from Branstad's previous budget plan; Iowa State University, a $5.9 million reduction; and the University of Northern Iowa, just less than $1 million less. There also is a proposed decrease of $18.85 million to the Iowa Skilled Worker and Job Creation Fund through community colleges and state universities.

Democratic legislative leaders were critical after reviewing Branstad's revised budget plans Tuesday night, and they accused Branstad and Lt. Gov. Kim Reynolds of poor management.

“It is really disappointing that after making major, major budget cuts, that they are proposing even more cuts," said Senate Minority Leader Robert Hogg, D-Cedar Rapids. "These are basic investments that the state needs to make for our future."

Hogg was particularly critical of cuts to the Iowa Skilled Worker and Job Creation program. "These are the programs that we have to help families lift themselves up and to provide skilled workers that our employers across the state need," he said.

Sen. Joe Bolkcom, D-Iowa City, complained that Branstad and Reynolds are continuing down a path of starving Iowa's schools, and cutting funding to community colleges and universities to pay for tax giveaways to large corporations. He said they have failed to keep a promise of creating 200,000 new jobs and raising family incomes by 25 percent.

Republican lawmakers were more charitable to in their analysis of the revised state budget plans.

Sen. Randy Feenstra, R-Hull, chairman of the Senate's Ways and Means Committee, said he applauds the governor for using cash reserves to balance the current budget and Branstad's commitments to public safety, state institiutions and K-12 school programs. But he acknowledged that legislators have their work cut for them.

"We all understand that there are extreme challenges ahead and actually choppy waters," Feenstra said. "We just have to figure out how that plays out. It will take reducing programs, maybe even removing programs, and looking at all facets of where revenue comes in and goes out, from tax credits to tax exemptions, to the very programs that affect everyday lives. These are all things that need to be looked at and figured out."

Sen. Roby Smith, R-Davenport, chairman of the Senate State Government Committee, said his initial response to Branstad's revised budget plan was that he didn't see any red flags, but he still needed more time to study the details. But he was pleased that Branstad is proceeding with plans to hire additional state troopers amid concerns that the Iowa State Patrol is understaffed.

"I have spoken with many troopers and it is important that we have adequate levels of troopers out there" on Iowa's roads, Smith said.