This week we debated and passed a bill that dealt with funding for the K-12 education.  This debate lasted for 12 hours in the house.  The bill appropriates $109 million in new money for the FY05 and back filled the 2.5% across the board cut that Governor Vilsack made late in 2004.  The state is projected to bring in only $10 million in new revenue for this next year.  So we need to be finding $99 million from somewhere else in the budget to fund the increase for education.

This will bring the total dollars the state spends on K-12 education to $1.881 billion for FY05.  This will appropriate the dollars that we set for the allowable growth figure a year ago. 

The bill also set the dollar amount for the FY06.  This is not an appropriation, but rather the amount that we think that we can fund for the year starting July 1, 2005 and ending June 30, 2006.  The figure we set is a $45 million increase, which is a total dollar amount of $1.926 billion.  We will appropriate the dollars a year from now.  If the economy improves more than what we expect at this time we can give more.  But for now this is all that we can promise.  To promise more and then appropriate less puts local school districts in a bigger bind.  But the Governor said this isn’t enough and vetoed the bill.

The state revenues for fiscal year ending in 2006 are not expected to be much better.  In addition there is our problem with Medicaid (a federal entitlement that provides medical care for children, disabled adults and elderly persons in nursing homes).  In 2006 Medicaid faces a significant challenge in that the money that has been borrowed from the Senior Living Trust Fund to support the entitlement will be gone. The price tag for Medicaid could be as high as $200 million.

But problems are nothing more than a decision yet to be made.  I am confident that we will find a way to handle the financial problems the state is facing. 

There are some bright spots in the near future for the state.  There was an announcement of $20 million in financing for 28 different Iowa companies from all over the state.  This state needs more business growth, which creates more jobs.  There isn’t a place in the state that needs it as badly as Southeast Iowa.

This coming Thursday, February 26 is when we will debate the gaming bill in the house.  All amendments for that bill need to be filed by Monday night and all amendments to amendments need to be filed by Tuesday night.  This will give everybody the chance to know what is being submitted.  I don’t think there is anybody who could wager a bet (sorry I couldn’t resist) on what the final bill may look like.

The house leadership believes we can have this debate in one day.  If history repeats in self the bill will either pass or fail by a very narrow margin.

Next weeks letter will most likely deal with gaming bill debate. 

I will have a legislative forum in the Louisa County Courthouse on Saturday, February 28 at 1:00 in the afternoon. 

So until next time,

Tom Sands