DES MOINES — House and Senate leaders said Thursday they are very close to finalizing the size of the fiscal 2019 state budget, but unresolved issues on how to deliver tax relief and fund priorities in a sustainable way are standing in the way of starting the process for shutting down the current session.
House Speaker Linda Upmeyer, R-Clear Lake, and Senate President Charles Schneider, R-West Des Moines, said next year’s spending level will be higher than the current $7.254 billion revised appropriations, but they wouldn’t say how much more they expect to spend beginning July 1.
“I anticipate it will be a little bit bigger, yes,” Upmeyer told reporters in discussing the fiscal 2019 state budget.
“We will fund the priorities of Iowa,” she added. “That’s not to say that nobody might move backwards. They may.”
Schneider agreed that fiscal 2019 state spending “will be more,” even as state income taxes are reduced.
However, there is still disagreement between the House and Senate whether to include corporate income tax cuts — which Gov. Kim Reynolds did not recommend at this time — and how much revenue the state can afford to cut.
“Our numbers are very close to one another. There’s not a whole lot of daylight between the two of us,” Schneider said.
“People just need time to figure out where they can accommodate each other to get to the same place,” the Senate president noted. “We definitely would like to see corporate income tax relief and reform included in the tax bill. That’s why we included it in the bill that we passed. Hopefully, the House will include it in theirs. If they don’t, then, hopefully, they’ll be open to it in a negotiated compromise.”
Upmeyer said the House continues to work off the governor’s tax-cut proposal, which carried a smaller price tag than the Senate-passed version.
She said she remained open to considering a cut in both personal and corporate income taxes if that fits without disrupting state commitments to education, human services and funding for the courts and corrections.
“I think we’re getting really close” on setting fiscal 2019 spending targets, the House speaker said. “It’s really hard to know how you can hit targets until you know what you’re going to do on taxes because they’re so tied together. We want it to be sustainable. We want to be able to fund the priorities of Iowans and be able to move forward in a very reliable way.”
Earlier this week, the governor approved a de-appropriations bill that cut general fund spending by $25 million and re-purposed another $10 million in business incentive money to the general fund.
The revisions brought current-year spending to a level that is $9.2 million below fiscal 2017 while leaving a projected $32 million ending balance June 30, according to the Legislative Services Agency.
Upmeyer expects one more House Ways and Means subcommittee meeting would be held on the governor’s tax-cut plan, as well as a public hearing to gather public comments.
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