DES MOINES (AP) — Under a budget plan that Republican lawmakers unveiled Thursday, state workers would have to pay $200 a month toward their health care coverage — a proposal that drew immediate pushback from unions, which would have to agree to the change.
The plan calls for spending almost $6.1 billion for the fiscal year beginning July 1, up from the current year's budget of just less than $6 billion. The budget calls for no tax increases and is about $182 million less than the budget proposed last month by Gov. Terry Branstad, a Republican. Legislative GOP leaders and the governor seemed confident the differences can be resolved.
House Speaker Kraig Paulsen of Hiawatha said the new health care cost seemed reasonable and was "still less than the national average, less than the state average." About 80 percent of state employees don't pay anything toward their health care coverage.
That provision wasn't in the proposed budgets of either the governor or the Democrats, who released their proposal last week.
Republicans noted that the change also applies to lawmakers.
"Asking all employees, including state legislators, to contribute at least $200 toward their own health care is the right thing to do," Paulsen said.
But he conceded that the contract the state has with its unions would have to be modified, and that unions have been asked to reopen contract negotiations.
"I have no intention of reopening that contract," said Danny Homan, president of Council 61 of the American Federation of State, County and Municipal Employees, the largest union representing state workers.
Homan said the contract is binding until summer 2013, and "that is not up for discussion."
Senate Republican Leader Jerry Behn of Boone said GOP lawmakers worked closely with Branstad in hammering out details of their budget plan and said he didn't believe there were issues that couldn't be resolved.
Branstad spokesman Tim Albrecht would not comment on the health care provision, but said the governor's team was looking forward to reviewing the budget details in the GOP plan.
The proposed spending plan includes no tax increases. Paulsen said Iowa needs to send a message to businesses that the state's budget and business climate are stable.
"It's also an important part of growing Iowa's economy," Paulsen said. "It's important to send a signal to employers that we have our act together and they are not going to have to be concerned about a looming tax increase."
However, the proposal does not include the $25 million that Branstad wanted to add to the economic development budget to target "high-quality" jobs, such as information technology jobs.
Paulsen said there are signs that the state's economy is recovering, but that the recovery is fragile and growth in state tax collection is equally weak.
The proposed budget projects a $192 million surplus at the end of the year. Paulsen said Republicans intend to save the money in the state's reserve fund.
"We continue to have tough budget times, especially with not knowing what's going to happen with the federal government," Paulsen said.
The Republican budget calls for $20 million in budget cuts, but does not specify where they should be. Paulsen said those decisions would be left to budget committees in coming months.
He described the 1 percent increase in state spending as "modest and conservative" and said Republicans would spend only 97 percent of what the state collects in taxes.
The Republican budget plan is only their opening salvo in what will be a months-long debate in a deeply divided Legislature. Democrats control the Senate 26-24 and Republicans run the House 60-40.
Senate Democrats last week unveiled a proposed state budget of $6.2 billion, which they point out is $25 million less than the governor sought.
"Jobs and student achievement are the top Democratic priorities, and I know many Republicans share those priorities," said Sen. Bob Dvorsky, D-Coralville, who heads the Senate Appropriations Committee. "We will consider any idea, regardless of who suggests it, that will help the Iowa economy grow."
The Democratic budget plan includes a commercial property tax cut to help small businesses, as well as a boost in the earned income tax credit — a break that is aimed at low-income workers.
Republicans and Democrats alike have ruled out an election-year tax increase as they assemble their budgets.
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