Legislative leaders and Governor Tom Vilsack have struck a final agreement on a state budget. “Hopefully with this framework and this compromise, this session can come to an end,” Governor Vilsack says.
Lawmakers plan to pass the bills that spell out the details by as early as Tuesday according to House Speaker Christopher Rants, a Republican from Sioux City. Rants says negotiators came up with a good, balanced product. “We’re pleased with the compromise, obviously, otherwise we wouldn’t have one,” Rants says. “Everybody bargained really hard. Ultimately, I think it’s a budget package that all Iowans will be supportive of.”
It took days of negotiations and the final deal includes a tax cut for seniors and a three-year plan to raise teacher salaries. The tax cut for seniors, the part that will be implemented in the next two years, allows seniors to earn more pension income without paying state income taxes. The other part phases out of the state tax on Social Security income over the next eight years. Republicans had insisted that tax cut be part of the final deal. “Republicans feel very good about the significant amount of retirement tax relief we’ll be providing to Iowa seniors and we believe it will make a difference to keep Iowa seniors here in Iowa,” Rants says. “We’ve been saying that for days and we’re pleased that that’s part of the package.”
The teacher pay package calls for spending an additional $35 million in the coming year to raise salaries, another $70 million in the next and $105 million in the third year. Senate Democratic Mike Gronstal of Council Bluffs says there are “101 details” yet to be ironed out, but Democrats are pleased with the committment to teacher salary hikes. “People of good faith sat around the table, fought for the things they believed in for a long time and we came to an accommodation,” Gronstal says. “We listened to Republicans. Republicans listened to us and we put together something that we can all agree to.”
Democrats got Republicans to more gradually phase-in their tax cut. Democrats argued a speedier time frame would make it more difficult for the state to have enough revenue to fulfill the promise to raise teacher pay. Democrats, in turn, then tossed out their demand for about five-million dollars to finance academies that would boost the skills of those who teach math and science. Democrats also agreed to begin implementing a “pay for performance” system in the teaching profession. Vilsack and the other Democrats reluctantly agreed to the merit pay plan. “Well, you know, that’s why they call it a compromise,” Vilsack told reporters.
The deal was announced just before six o’clock Thursday night following a flurry of private meetings Thursday afternoon in the governor’s office. “We have the framework of a compromise that I believe and I think the leaders believe that will result in this legislative session ending…sometime next week,” Vilsack predicted.