School funds, budget surplus, fuel tax top forum discussion
February 11, 2013
Sen. Mark Segebart (left) and Rep. Dan Muhlbauer spent extra time visiting with constituents after the Carroll Chamber of Commerce legislative forum Saturday morning at the American Legion Hall in Arcadia. Daily Times Herald photos by Larry Devine
State government is already far behind in setting allowable funding growth for Iowa's school districts and is now seeing a standoff between the governor and Legislature that threatens more headaches for local school officials, Rep. Dan Muhlbauer said at a Carroll Chamber of Commerce Legislative forum Saturday morning.
The Democratic-controlled Iowa Senate, on party-line vote, recently approved 4 percent allowable growth for fiscal-year 2014 and will soon consider another 4 percent hike for 2015, Muhlbauer, a Democrat from Manilla. told the nearly 30 people who attended the forum at the American Legion Hall in Arcadia.
Allowable growth should be set a year and a half in advance so districts can set their budgets. School district didn't receive any allowable growth in last year's legislative session.
"We are a year and a half behind," said Muhlbauer. "2014 should have been set last year."
At the forum featuring Muhlbauer and Sen. Mark Segebart, R-Vail, the legislators noted that the battle focuses on Gov. Terry Branstad's insistence that the Legislature first deal with his education-reform plan.
"Governor Branstad is holding allowable growth hostage," Muhlbauer said.
Segebart said the Senate allowable-growth bill was approved without consideration of Branstad's education-improvement plant.
Introducing his reform plan this year, Branstad said he wants to make Iowa the top-performing state in the nation in education and among the best in the world.
Branstad has proposed wide-sweeping standards, initiatives and incentives, and he's been traveling the state to rally support for his plan.
Muhlbauer said of the difficulty of examining the governor's plan and meeting the deadline for setting allowable growth for elementary and secondary schools and higher education, which accounts for $3.45 billion or about 58 percent of the state's budget, "We can't look at the plan in a month. There are a lot of things in it."
Citing allowable-growth impact in his own district in the Iowa House, Muhlbauer said that with 4 percent increase IKM-Manning School District still gains only about $400, with 2 percent growth loses about $80,000 and with zero growth loses about $160,000.
That kind of hit to rural districts would "mean closing more doors, laying off more teachers," Muhlbauer said.
The governor proposes implementation of his plan by investing $14 million the first year, $72 million the second year and eventually climbing to $187 million in five years.
Segebart said the Senate didn't address the governor's proposals, one of which would raise teachers' minimum starting salary from $28,000 to $35,000.
Segebart said the Senate's allowable-growth bill will be taken up this week by the House, where the Republicans hold majority, and will eventually go to conference committee to try to resolve differences.
However, Muhlbauer said, allowable growth also raises an urban-rural clash.
For urban schools that are growing, 4 percent allowable growth means plenty of money, but it may be only small gain for rural districts with declining enrollment, he said.
Besides education funding, the forum also was highlighted by discussion of raising Iowa's gas tax to improve roads and bridges and use of the state's $800 million revenue surplus.
Branstad is "not putting his strength behind" a gas-tax increase, Muhlbauer observed.
"Until the governor comes out and says we need to do something with the gas tax, it's just kind of lying in limbo," he said. "I hope we can get something fired up. I'd like to see something done out there. I think our roads are really falling apart. The longer we wait, the more costly it's going to be. We're going to have to totally tear our roads all the way to the ground and start over at a higher price."
Segebart, who campaigned last year on support of a gas-tax increase, said the state is about $200 million short of meeting maintenance needs.
Segebart, who formerly served on the Crawford County Board of Supervisors, said gas-tax revenue previously was allocated 34 percent to counties, 20 percent to cities and the rest to the state Department of Transportation before that formula was changed to 20 percent to counties, 20 percent to cities and the rest to the state.
"I want to return to the old formula that sent more money to the counties," he said. "If we can't agree on that, then I'm voting against it."
Virginia Hagemann of Carroll asked the legislators about assurance that funds from a gas-tax increase would go just for roads and bridges and not also for recreational trails and beautification projects.
Muhlbauer said, however, that gas-tax revenue goes for "the whole gamut" in the transportation budget, such as equipment.
Segebart noted too that Branstad has said he wants the Legislature to reform the state's property-tax system - lowering commercial rates - before he will put effort into the gas tax.
Segebart mentioned proposals to use some of Iowa's revenue surplus for road and bridge improvements but added those would have to be one-time-only projects.
"We couldn't sustain that kind of increase without having regular income," he said. "I'd sooner see a gas-tax increase rather than taking all the money from the surplus because it would be an ongoing source and it would help us fix our roads out here in the western half of the state."
On the Iowa revenue surplus, Carroll Mayor Adam Schweers asked the legislators about allocating some of those funds to cities for upgrading waste-water-treatment facilities. He pointed to the possibility of unfunded mandates for cleaning up rivers. Studies have indicated chemical runoff from Iowa farmland is contributing significantly to an oxygen-depleted "dead zone" in the Gulf of Mexico.
Muhlbauer said a nutrient-control strategy to improve water quality is a big issue this session, as Iowa Department of Natural Resources director Chuck Gipp, Iowa Secretary of Agriculture Bill Northey and U.S. Environmental Protection Agency officials are trying to come up with a plan.
"Farmers, urban people, DNR, EPA all are going to have to come together and come up with a solution," said Muhlbauer, who farms in the Aspinwall-Manilla area, "because we don't want EPA coming out here and telling us, 'You're going to take it or leave it.' We don't want that. We want to work with them."
Muhlbauer also said of the revenue surplus, "It might be good just to let that surplus sit there. It's good we have surplus money, but it almost makes it more difficulty down there (at the Capitol). Now all of a sudden everybody wants to fight over this money and where to go with it."
Segebart said Iowa spent $6.25 billion last year and the governor has proposed a $6.5 billion budget this year, while revenue is projected at almost $7 billion.
But, he cautioned, agriculture, which has largely fed the state's budget health, could suffer if drought continues another year.
On an encouraging note, he added, Iowa State University Extension climatologist Elwynn Taylor recently reported that the ocean atmospheric condition appears to be changing and there could be an early spring and more rain this year.
For his part, Segebart indicated the revenue surplus may be better used as a refund to taxpayers which could then stimulate Iowa's economy.
Segebart opened the forum by expressing opposition to Iowa expanding Medicaid coverage under the Obamacare (federal Affordable Care Act) promise to help cover much of the cost.
Segebart serves on the Senate Human Resources Committee and said no bills have been introduced on which direction to go on Medicaid expansion. Expansion under Obamacare would add another 150,000 Iowans to the 350,00 to 400,000 now on the rolls, he said. Federal government would cover cost of newly eligible people the first three years and 90 percent thereafter until 2020.
"Iowa has no business getting involved in Obamacare," he commented.
"It's doubtful the federal government will be able to uphold its funding promises," he remarked. "They're bankrupt, if you haven't heard. Revenue totals around $12.5 trillion and expenditures total around $13.8 trillion.
"With a $1.3 trillion deficit and a $16.4 trillion debt, it's hard to believe that they will be able to keep a commitment to additionally spend for requirements for Iowa and meeting future funding commitments."
The legislators said progress has been made toward regionalization of Iowa's mental-health-care system. Legislators recently reached a deal on providing $11.6 million for transition to the new system.
Muhlbauer said, "We might more realistically need $20 million to put into this fund to make sure we get all the bills paid because there's going to be a lapse of time before the new program gets put into place."
He added that the goal of the new system is to make mental-health care stronger and more efficient while meeting all needs.
The next forum will be from 10 to 11 a.m. Saturday, Feb. 23, at St. Anthony Regional Hospital.
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