Vilsack, lawmakers cut budget deal
By Todd Dorman |
DES MOINES — Statehouse Democrats and Republicans reached across the last inches toward compromise late Thursday afternoon and forged a state budget deal they predicted would swiftly end their overtime legislative session.
A series of meetings over several hours Thursday yielded agreement on a $5.2 billion spending plan for Fiscal Year 2007, which starts July 1. When lawmakers emerged from Gov. Tom Vilsack’s office, weeks of testy finger-pointing had melted into handshakes.
“We’re pleased with the compromise. Everybody bargained hard,” said House Speaker Christopher Rants, a Republican from Sioux City. “It’s a budget package all Iowans will be supportive of.”
Democrats also praised the accord.
“I think this is a good deal,” said Senate Democratic Leader Mike Gronstal of Council Bluffs. “People of good faith sat around the table fighting for the things they believed in…”
Although scores of details still have to be worked out, leaders predicted that the legislative session would wrap up by Tuesday or Wednesday. The session was supposed to end nine days ago.
“Hopefully with this framework and this compromise this session can come to an end,” Vilsack said.
At the heart of the deal is a compromise on tax cuts for retirees.
GOP leaders entered talks with a $101 million plan phasing out the tax on Social Security income and increasing tax exemptions for other retirement earnings over the next six years. Democrats wanted to spread the cut over eight years, fearing lost revenue would hurt schools.
In the end, Republicans agreed to an eight-year Social Security tax phaseout. Democrats agreed to accelerate an increase in other retirement exemptions over the next three years. At the bottom line, total tax relief still will top $100 million.
In 2007, the amount of retirement income exempted from state taxes will rise from $9,000 to $18,000 for single filers and from $13,500 to $24,000 for couples. The exemptions eventually will jump to $24,000 and $32,000 by 2009.
“We believe it will make a difference to keep seniors here in Iowa,” Rants said.
Democrats won their top legislative priority — tens of millions of dollars for teacher pay raises. The agreement would provide $210 million over the next three years salary increases, including $35 million in the next school year.
Lawmakers predicted the money would raise average teacher pay in Iowa from 41st to 32nd nationally. In a nod to Republicans, some dollars will be put toward testing a system for tying teacher pay raises to classroom performance.
“It will send a strong message to Iowans that all of us are concerned about quality in our classrooms,” Vilsack said.
Vilsack also pushed for and received $15 million in 2007 and $20 million in 2008 for preschool programs as part of his “Strong Start” initiative. But he jettisoned a $5 million plan for teacher training academies opposed by Republicans.
“Well, you know, that’s why they call it a compromise,” Vilsack said.
Republicans agreed to shuffle dollars within the budget to provide money to keep most workforce development offices open in towns across Iowa. Democrats argued that the offices play a vital role for unemployed workers and small businesses.
Todd Dorman can be contacted at (515) 243-0138 or at email@example.com.
Teacher pay: $210 million over the next three years for teacher salary increases.
Tax relief: Retirees get more than $100 million in tax relief. The tax on Social Security is phased out over eight years while tax exemptions for other retirement income rise over the next three years.
School aid: State aid to public schools would rise by 4 percent, or $83 million, in the 2007-2008 school year.
Universities: Regents schools would get an $11 million boost in general aid and $20 million for biotech research.
Community colleges: General state aid to 15 community colleges would rise by $10 million.
State salaries: The agreement would provide $29 million for state pay hikes.
Water quality: Funding for water quality improvement efforts jumps $17 million.