DES MOINES, Iowa (AP) — Iowa lawmakers returned Monday to the state Capitol for a new legislative session that's expected to be dominated by a GOP-led effort to cut taxes despite a constrained budget and growing pressure for legislators to address ongoing problems with Iowa's privatized Medicaid program.
The Republican-controlled chambers convened in Des Moines for a mostly ceremonial day of speeches, where GOP leaders indicated that overhauling Iowa's tax code will be a top priority. Republicans, including Gov. Kim Reynolds, have yet to provide details publicly on how a tax proposal will work amid lower-than-expected incoming revenue to the state's roughly $7.2 billion budget.
That financial reality has led to a range of spending reductions to government departments in recent years. Officials for Iowa's three public universities have also blamed reduced state revenue on tuition hikes. Any tax plan in Iowa would come on the heels of a $1.5 trillion tax package passed in Congress, which Iowa budget officials are still reviewing to understand its impact on state revenue.
Senate Majority Leader Bill Dix, a Shell Rock Republican, said he wants to "relieve the tax burden" that Iowans face. He provided few specifics in prepared remarks.
"The objective has always been the same — for more money to be kept by those who have earned it," he said.
Reynolds, presiding over her first legislative session as governor since being sworn in last May, will lay out her priorities in a Condition of the State address on Tuesday. Reynolds has declined to offer specifics about her speech, though she's expected to reference tax cuts, workforce development and other vocational opportunities beyond a high school diploma.
Reynolds told reporters Monday that she wants a tax plan that creates a more competitive business environment and reduces taxes for "working class families."
"We ought to do everything that we can to make sure that they get to keep more of their hard earned money," she said about individual taxpayers.
Democrats, who have little legislative power after losing control of the state Senate in the 2016 election, are expected to make a lot of noise ahead of the upcoming midterm election. All House seats and half in the Senate are up for grabs.
House Minority Leader Mark Smith, a Marshalltown Democrat, used his remarks to accuse Reynolds of illegally transferring $13 million from an emergency fund a few months ago to balance the state budget. The issue is the subject of a lawsuit by a Democratic state representative who claims that emergency budget conditions weren't met to merit the fund transfer. Reynolds has called the lawsuit politically motivated. The topic is expected to spur a technical change to state law, which Democrats counter is a sign of wrongdoing.
Lawmakers are also expected to review whether the state's privatized Medicaid program is working as it should. The federal-state health care program for poor and disabled Iowans was privatized in 2016, and health care providers and patients have complained ever since of reduced services and delayed reimbursement payments.
The Iowa Department of Human Services, which oversees the roughly $4 billion program now run by two insurance companies, said it's working on changes. GOP lawmakers didn't bring up Medicaid in their Monday speeches though House Speaker Linda Upmeyer has indicated she expects DHS to take action or lawmakers will make improvements.
"This system has to be in a better position," the Clear Lake Republican told reporters last week.
Reynolds is a staunch supporter of the privatized Medicaid program but has acknowledged "mistakes were made" in the transition, a point she repeated at Monday's press conference. But she's said changes can be made to the program without legislative action.
Reynolds also defended new data in a quarterly report from state officials that shows the privatized Medicaid system is saving Iowa about $47 million annually. Former Gov. Terry Branstad once estimated about $232 million in savings this budget year.
"We're still talking about savings," Reynolds said about the data. "Really when you look at the old system, it was out of control and it was unsustainable and it needed to change."
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