(Radio Iowa) – A disagreement over whether to spend 14 MILLION dollars boosting pay for paraeducators in public schools is the big stumbling block in budget talks among Republican lawmakers. Governor Kim Reynolds says House Speaker Pat Grassley successfully lobbied to include that amount in last year’s budget and, if it was a priority, it should have been part of the K-12 funding plan House and Senate Republicans already adopted in April.

“Nothing was mentioned about the $14 million,” Reynolds said. “…It shouldn’t be anticipated that it’s part of the agreement. He should have put it in his.” Grassley says the 2024 legislature made a commitment to raise paraeducators pay and House Republicans strongly feel that commitment should be maintained. “We’re not going to go back and just cut that and leave our schools in a situation to find the difference,” Grassley said. “Those are more like Governor Culver practices that we saw and we don’t want to see that happening on something like that.”

For years, Republicans have criticized Governor Chet Culver, a Democrat, for approving an increase in state funding for schools in the spring of 2009, then ordering a 10 percent across-the-board spending cut that fall during the Great Recession. This week, Governor Reynolds and Senate Republicans announced they’ve agreed on an overall state spending plan that’s five-point-two percent higher than last years. House Republicans favor spending 36 MILLION dollars more. Grassley says House Republicans find themselves in a familiar position — negotiating against the unified Republican Governor Reynolds and Senate Republicans.

“I would also argue with 67 members representing every county across the state…our goal is when we leave here is we fund the commitments that we’ve made to Iowans,” Grassley said, “as well as make strategic investments.” Reynolds says she is leery of the higher level of spending House Republicans propose given an updated estimate on state tax revenue. “A $218 million dollar decline in revenue, at the same time we’ve seen an increase in Medicaid,” Reynolds said, “and then when you add in the Tax Cuts and Jobs Act which I hope is permanent by the Trump Administration…so we’re $402 million off the table right now.”

Governor Kim Reynolds spoke with Radio Iowa on May 1, 2025. (RI photo)

Reynolds made her comments during an interview with Radio Iowa. Grassley, the grandson of U-S Senator Chuck Grassley, held a statehouse news conference a few hours later. “I can tell you as a Grassley, we don’t often hear that we’re not pretty tight with our money,” Grassley said. “…For example, we do not feel that the budget that we proposed, especially when we’re looking at a nearly a $2 billion ending balance, we’re looking at nearly $4 billion in the Taxpayer Relief Fund, we’re by no means just opening up the wallet and spending every dollar that we can get our hands on.”

Reynolds says House-passed bills providing sales tax breaks for toilet paper and laundry detergent that Grassley has championed would further complicate the budget picture. “It makes it hard to continue to look at cutting taxes, sustain the tax cuts we’ve already put in place,” Reynolds said, “and most importantly it makes it really hard to start to talk about property tax reform when we keep giving away and taking revenue off the table.” Reynolds says the House Republicans’ budget plan is too much of an escalation in state spending and would impede her goal to continue reducing the state income tax.

“I think it’s really important that we be fiscally responsible. You know I’ve cut taxes five times in six years. When it comes to the individual income tax rate we were the sixth highest in the nation and, going to a flat 3.8% rate, we’re the sixth lowest,” Reynolds says. “Every one of my colleagues are bringing taxes down, so I’d like to continue to be able to bring taxes down.”

Reynolds has said she wants to eliminate the state income tax by January of 2027 — the end of her current term. Reynolds announced last month that she would not run for another term as governor.