The Fry Times: Governor releases Fiscal Year 2025 budget proposal

Governor Reynolds unveiled her proposal for next year’s state budget Tuesday evening. A key request is significant new funding for K-12 education. The Governor’s proposed Fiscal Year 2025

General Fund budget spends $8.9191 billion starting July 1, 2024. This is an increase of $367.1 million or 4.29 percent over the adjusted FY 24 budget of $8.552 billion.

In many previous years, state funding for Iowa schools has taken center stage in Condition of the State speeches. This year was no different, with Governor Reynolds proposing a package of initiatives to raise teacher salaries. Like other Republican-led states, the Governor is calling for the starting teacher salary to be raised to $50,000. Additionally, the Governor sets a second minimum salary level for teachers with 12 years in the classroom. They see a new minimum of at least $62,000. A third part of the plan includes additional funds via Teacher Salary Supplement tiers to ensure that equal sized districts have similar resources for teacher pay.

The Governor also includes a new program to reward teachers who are helping their students improve. $10 million from the state’s American Rescue Plan funding is used to create the Merit Teacher Incentive Fund.

The Governor also proposed a 2.5% Supplemental State Aid for Schools figure (SSA) for the next school year. This takes the per pupil amount to $7,826, which is $191 higher than the FY 2024 level. When combined, the new teacher salary program, SSA increase, and school transportation equity fund adjustment means public schools could receive an additional $159 million in new funding if Legislature goes along with the Governor’s proposal.

To help incent additional options for students, Governor Reynolds is also proposing the establishment of a Charter School Start-up Grant program. This initiative provides $5 million in grants to help support new or high-performing charter schools already in operation.

Governor Reynolds is also proposing a larger than normal increase to Medicaid. The Governor is proposing an additional $75 million to this program, which serves more Iowans than any other in state government. Nearly half the money is expected to pay for any increase in costs through the managed care contracts. The proposed budget completes the transition of the Glenwood State Resource Center and provide additional funds to expand access to community-based services. Case management services receive an increase, as would some provider groups (although they have yet to be identified).

The state’s judicial branch, corrections, and public safety agencies get an additional $24.2 million in the new fiscal year under the Governor’s plan. The courts receive an increase of $3.7 million while the Department of Corrections gets an $11.8 million boost. Funding to the Department of Public Safety rises by $4.6 million.

In addition to the General Fund budget, Governor Reynolds released her spending proposal for the Rebuild Iowa Infrastructure Fund. The proposal spends a record-setting $293.2 million in Fiscal Year 2025. The big winner is the Department of Health & Human Services, which sees its utility project at the Woodward State Resource Center sped up along with full funding for an expansion of the State Medical Examiner’s office in Ankeny, renovations at the Civil Commitment Unit for Sexual Offenders at the Cherokee Mental Health Institute, and $10 million for a renovation of the Lucas State Office Building.

The Governor is also proposing an increase in funding for major maintenance of state buildings. Governor Reynolds’ proposal raises this amount by $15 million in FY 2025, to a total of $35 million. The RIIF budget plan also provides $5.4 million for replacing or upgrading elevators throughout the Capitol Complex. The Board of Regents gets $3.85 million to replace funds diverted from the UNI Industrial Technology Center project that were used to pay for emergency steam tunnel repairs. The Governor also proposed to fund the first year of infrastructure upgrades at the Lakeside Laboratory facility on West Okoboji Lake. This was a priority of House Republicans last year that did not get into the final RIIF agreement.

The Governor’s budget of $8.9191 billion increases state spending by $367.1 million or 4.29 percent over the adjusted FY 24 budget of $8.552 billion. The Governor’s budget documents revealed the final appropriation numbers for spending on Supplemental State Aid and Education Savings Accounts for the 2023-2024 school year. Education Savings Accounts ended up spending $127.9 million in FY 24, which is $20.5 million higher than the LSA estimate when the bill was passed. Supplemental State Aid ended up being $13 million higher than what was estimated during the 2023 legislative session. These two figures are why the adjusted FY 2024 budget is $33.5 million higher than the amount approved last May.

With the release of the Governor’s budget proposal, the legislative work of formulating next year’s state budget begins. Budget subcommittees commence their deliberations starting on Wednesday, January 17.

Forum Schedule

Senator Sinclair and Representative Fry will be hosting Legislative Forums in the District during the 2024 Legislative Session. 

The first day of forums will be:

February 23, 2024

8 a.m. - Corydon at the Wayne County Farm Bureau

10 a.m. - Chariton at the Lucas County Farm Bureau

12 p.m. - Osceola at Lakeside Hotel Casino

2 p.m. - Leon at the Leon Community Center