This week at the Statehouse – Week 9
On March 9th, the Revenue Estimating Conference (REC) met to set the state’s revenue estimate. The Legislature and the Governor are required by Iowa’s spending limitation law to construct the state’s general fund budget using the revenue estimate provided by the REC. The current members of the REC include the Governor or the Governor’s designee (who is currently David Roederer, the Director of the Department of Management - UNI Alum); the director of the Legislative Services Agency or designee (Holly Lyons, director of the Fiscal Division of LSA, the Legislature's budget agency) and a third person chosen by the other two (David Underwood, an economist from Mason City).
The REC meets three times a year to review revenue estimates and make revenue projections. At their December meeting they set the official revenue estimate that is used in preparing the state's budget. Only if they lower that estimate at their March meeting is another estimate to be used in developing the state budget.
The REC set the March 2018 estimates higher than the December 2017 estimates. Even though this estimate is higher, when crafting next year’s budget (Fiscal Year 2019) the Legislature is required by law to use the lower amount from their December estimate. A copy of the REC spreadsheet can be found here.
REC December estimates:
FY 18: $7,237.5 million (0% growth)
FY 19: $7,527.0 million (4.0% growth)
REC March estimates:
FY 18: $7,270.8 million, which is $33.3 million above the Dec. estimate (0.4% growth)
FY 19: $7,733.8 million, which is $206.8 million above the Dec. estimate (6.4% growth)
FY 20: $8,035.4 million, which is their initial estimate (3.9% growth)
According to the Legislative Services Agency, the estimated total of funds available for FY 18 is $7.271 billion, which includes the December REC estimate of $7.238 million, the $28.4 million increase associated with the federal tax law changes, and an adjustment to the base estimate of $4.9 million associated with the March REC estimate. During the 2017 Legislative Session, the General Assembly enacted appropriations totaling $7.265 billion for FY 18. The appropriations have been adjusted to reflect a required $13.0 million appropriation to the Economic Emergency Fund and estimated supplemental appropriation needs of $2.2 million. With the additional revenue added to the balance from the March REC estimate, the General Fund budget is estimated to have a shortfall of $3.6 million at the close of FY 18. You can see the updated spreadsheet here.
For FY 19, because the March estimates are higher than the December estimates the Legislature has to use the December estimate. At most, they can appropriate 99% of $7,527.0 million.
Bills of interest that were debated this week:
HF 2235: By a vote of 95-3, the House passed this bill, which requires the K-12 statewide assessment be developed by the Iowa Testing program within the University of Iowa. The bill also passed out of the Senate Education Committee and is now eligible for debate by the full Senate.
HF 2253: By a vote of 57-39, the House amended and passed this bill, which requires competitive bidding for construction when using lease-purchase agreements with governmental entities. The bill has been referred to the Senate State Government Committee.
HF 2280: By a vote of 55-42, the House amended and passed this bill, which still requires preservice teachers take the Praxis I test; however, teacher candidates would not be required to take and pass the end of program Praxis II test, with a score above the 25th percentile nationally, to be licensed in Iowa through the Board of Educational Examiners. The bill has been referred to the Senate Education Committee.
SF 2361: By a vote of 39-10, the Senate amended and passed this bill, which is designed to reduce student debt by requiring the Regents’ institutions provide a financial literacy course that students would be required to take prior to their graduation, provide employment and salary information for all majors, and provide information on how students and potential students can get a degree in three years. The bill has been referred to the House Education Committee.
SF 2362: By a vote of 49-0, the Senate amended and passed this bill, which requires the Regents’ institutions, community colleges, and private colleges and universities to identify the courses that will utilize open educational resources. The Regents’ institutions must also develop a 5-year plan to increase the number of courses utilizing open educational resources. The bill has been referred to the House Education Committee.
March 16 is Second Funnel Date
Next week ends the Legislature’s self-imposed deadline to have policy bills pass one chamber and out of the other chamber’s committee to remain eligible for debate this session. This funnel date does not apply to appropriations and tax bills.