Republicans in the Iowa House and Senate have agreed on a more than $9.42 billion state budget plan for the next fiscal year.
House Appropriations Committee chairman Gary Mohr of Bettendorf is one of the negotiators. “Sure there are things that I would have probably done differently as an individual, but this is a give-and-take situation,” Mohr said. “…It’s a good deal.”
The plan will require withdrawing about $900 million from state reserves because state tax revenue is dropping due to tax cuts. Mohr said using some of the state’s sizable surplus for the next couple of years was part of the plan as Republicans voted for income tax cuts, including the recent drop to a 3.8% rate on January 1, 2025.
“We cut taxes and we don’t need to take Iowans for that revenue when we’ve got $6 billion in the bank,” Mohr told reporters, “but we do expect revenue to increase over the next five or 10 years.”
Representative Brian Meyer of Des Moines, the next Democratic Leader in the House, said dipping into the state reserves to cover ongoing expenses is the wrong approach. “The budget is a disaster,” Meyer said. “…At some point, they’re going to run out of money.”
House Republicans successfully pushed to include money in the budget to boost pay for paraeducators and nursing home employees, but accepted an overall lower level of spending that was closer to the initial offer from Senate Republicans. Representative Mohr said the budget plan will pay for priorities with the dollars that are available.
“I was an economics minor in college and my economics professor the first day of class said economics is the study of unlimited wants and limited resources and that’s true every day when you’re putting a budget together at home or for the State of Iowa,” Mohr said this afternoon, “so sure there’s things we can’t fund, but that’s true every year.”
Governor Reynolds, in a written statement, said the deal “puts taxpayers first” and keeps the state of Iowa on a “fiscally sustainable path.”