Knoxville — Rep. Greg Heartsill says that legislators will be looking for ways to fund infrastructure improvements without raising the gas tax when the session begins on Jan. 13, 2014. However, Medicaid expenses continue to increase and record revenue to the government is not expected to continue.
"I think one of the big items is definitely alternatives to raising the gas tax," Heartsill said when asked what legislators will focus on. He and his fellow Republicans are in the majority in the House will try to find ways to put more money into the Road Use Tax Fund, as well as work to retire more state debt in 2014.
Heartsill said everyone is concerned about the condition of the state's roads and bridges, but the Republicans do not want to further burden Iowans with higher taxes. He is unaware of any upcoming proposals, similar to former Gov. Chet Culver's I-Jobs initiative, which was supposed to pay for "shovel-ready" projects at a cost of approximately $1 billion.
With grain prices down, Heartsill is concerned for the future. Household incomes are also falling, which will mean less revenue to the government.
"I think we need to be cognizant of our revenue projections," Heartsill said. He hopes the Legislature will continue to exercise fiscal discipline and find more ways to reduce spending.
Though revenues may go down, the costs to the State for Medicaid continue to increase. State revenue grew by 2.8 percent last year, while Medicaid growth was at 7.5 percent. This means that approximately 40 cents of every new dollar received by the State was taken by Medicaid. Medicaid's percentage of the overall state budget has also grown from 9.3 percent to 17.5 percent. Meanwhile, since 2000, federal reimbursements to the State for Medicaid have decreased from 63 percent to 56. Medicaid's growth outpaces the growth of Iowa's economy, which concerns Heartsill.