A significant decision was announced last week by the majority party in the Iowa Legislature without fanfare. The blueprint that will be used to craft the budget for the next fiscal year was released. The next fiscal year begins on July 1, 2007 and ends on June 30, 2008.

The budget is balanced! Of course, that is state law and in my mind, the one major thing we must accomplish. And, the good news is that we will leave the state in better financial shape than last year. The state’s rainy day funds will be at their highest levels ever. The cash reserve fund will be at its maximum of $442 million and the economic emergency fund will be at $136 million which is close to its maximum level.

The blueprint is fiscally sound and resists using the “gimmicks” that have been used in the recent past years to balance the budget. While it makes my job as the Chair of the Health & Human Services Appropriations more difficult for this year, it means that the state will be in better shape next year. Medicaid will be fully funded. That’s what the Governor wants and that’s what the majority party wants. That means we will not intentionally under fund Medicaid and borrow from that fund to pay for other projects. In past years we have had to make a supplemental appropriation to Medicaid because we borrowed from it the previous year. In a sense, we were always paying off last year’s loans.

In preparing the Health & Human Services budget for the coming fiscal year we are proposing $141 million in new and expanded programming for Medicaid. Most of this state expenditure is matched with $2 from the federal government for every $1 of state money. This new proposed investment in medical care for Iowa’s senior citizens, children, disabled adults, and very low income parents will allow about 20,000 more Iowans to obtain medical care. The proposal does not include an increase in Medicaid re-imbursements to providers such as hospitals, physicians, nurse practitioners, and other eligible members of the healing arts professions. To balance the budget, difficult decisions have to be made.

In addition, we propose to increase child welfare providers a 3% increase for the work they do with some of our most vulnerable children. This would apply to children who are served by agencies such as Horizons, Four Oaks, Tananger Place, and Lutheran Services of Iowa. We had hopes of raising this amount to 4% to be in line with allowable growth for our schools. However, because of budget constraints, child welfare agencies will only receive a 3% increase if approved by both the House and Senate.

We recommend increasing the number of children access to health care through hawk-i, Iowa’s children’s health care program. Also proposed is a significant increase in providing low-income, working families with child care assistance. And, with the passage of the $1 per pack cigarette tax, we have a moral obligation to provide help to those addicted to nicotine. We are suggesting a sizeable increase in tobacco and cessation programs.

Keep in mind, these are proposals at this point in time and the budget faces a lengthy trip through the legislative process. I will be informing you in this column and in forums that are held in the area nearly every week-end, more of the detail of the budgeting process.

Other parts of the budget are being repaired. The Senior Living Trust fund, which has been robbed for years, will be at $142 million, nearing half of the $300 million that we must repay to replenish the fund. Our commitment to improve our schools from pre-school to graduate school, our commitment to property tax relief for small businesses, and our commitment to expand health care options throughout the state require us to make difficult decisions.

As we build the budget, each Appropriations sub-committee must stay within the target set by the leaders. When we all stay within our budget target, we will balance the budget in an honest and transparent manner. No gimmicks and no “smoke and mirrors”! We need to work to improve the way our state government works for you. And the first order of business is balancing the budget and having Iowa in better financial shape than last year.

The second order of business is that we need to be open and honest about how the new tobacco tax is being spent. As we build the budget, I will be make it very clear that the new tobacco tax revenue will be used to fund health care, nothing but health care for Iowans. The increases in Medicaid and the hawk-i programs alone will be $150 million. It is anticipated that the new tobacco tax dollars will be somewhere in the $130 million range. As you can see, we have many more health care needs than what new tobacco tax dollars will generate.

Thanks for your letters, e-mails, and phone messages. I am attempting to respond to as many as possible. I do appreciate hearing from my constituents. You can contact me at the Iowa Legislature by e-mail, ro.foege@legis.state.ia.us or calling me at 515-281-3221.

Ro

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