March 14, 2016

IowaWatch Connection Podcast: Legislature Reaches Key Tax Deal, Education Funding Still Uncertain

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The tenth week of the 2016 legislative session is over, with surprising breakthroughs on budget issues just before the second funnel deadline.

“From the beginning people have been saying we need to settle school funding, we need to make a decision on tax coupling, and then we can work on other things,” said James Lynch, who covers the Legislature for The Gazette. “Now it appears that they are getting to that point where they’ve reached a decision on tax coupling and think they’ll make a decision on education funding, maybe next week.”

The tax coupling agreement retroactively changed the Iowa tax code for 2015 to conform to federal changes and approved sales tax exemptions on supplies used in manufacturing. The agreement helps clarify how much money the legislature has to work with, but how much of that money ends up going to education hasn’t been decided, he said.

Last year’s extended Legislative session led to a bipartisan decision to provide 1.25 percent more money for education and a one-time boost of nearly $56 million. But Gov. Terry Branstad’s veto of the one-time spending caused schools to slash spending and upset legislators on both sides of the aisle.

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