- Associated Press - Monday, June 1, 2015

DES MOINES, Iowa (AP) - The state will spend about $7.3 billion for the upcoming fiscal year under a compromise deal Iowa lawmakers announced Monday.

The tentative deal includes $7.168 billion in ongoing spending, plus an additional $125 million in one-time expenses. As it is structured, the Republican-led House maintains a pledge to keep ongoing spending in line with projected revenues, while the Democratic-controlled Senate gets some more money for key priorities such as education.

The budget for the current fiscal year spends just under $7 billion. Republicans said the proposed one-time expenses will come out of the more than $400 million in surplus dollars remaining at the end of the current budget year.

“I think it’s a fair deal,” said House Speaker Kraig Paulsen, R-Hiawatha. He was optimistic that the budget - which must still win approval in the General Assembly - could be resolved by the end of the week, so that lawmakers could adjourn for the year.

The plan includes new funding for state universities that lawmakers said should ensure a tuition freeze. Lawmakers also found compromise on K-12 education, with an increase in ongoing spending, as well as a one-time payment of $55.7 million. Senate Majority Leader Mike Gronstal, D-Council Bluffs, said he didn’t think it was enough money but that Democrats fought hard for the best deal they could get.

“Left to our own devices we would pass a very different budget,” said Gronstal, adding: “The voters gave us a set of people in this building and it’s our duty to work together to come to common ground.”

Tammy Wawro, president of the Iowa State Education Association, which represents about 34,000 teachers, support staff and others, criticized the compromise deal in a statement, saying it is “most certainly days late, and millions of dollars short.”

On university funding, Bob Donley, executive director for the Board of Regents declined to comment on whether this will provide for a tuition freeze, saying he could not speak on the budget impact until more details are released.

Lt. Gov. Kim Reynolds said Monday morning that the administration was waiting to review the details of the deal. She expressed concern that the agreement did not contain funding for the 2016-2017 school year, noting that Gov. Terry Branstad has said he would like to resolve that.

“He’s made it pretty clear that we need to provide certainty,” said Reynolds, who did not say what action the governor’s office would take if the school funding issue was not addressed.

The leaders in the politically divided Legislature reached the terms after roughly five hours of negotiations Friday. Their daily expense payments ran out May 1, but they cannot adjourn until reaching a budget agreement for the fiscal year that begins July 1.

With the Senate Democrats originally proposing an overall general fund budget of about $7.34 billion and House Republicans seeking to spend $7.168 billion, the difference was not large. But compromise proved to be a challenge, as the two sides grappled over how much to spend on education and health care, and whether to use some of the state’s surplus funds.

As of the end of this fiscal year, the state will have more than $400 million remaining in the general fund - in addition to about $700 million in designated rainy day funds.

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