A key House panel approved a sweeping measure Tuesday that cuts $128 million in state spending.
The biggest losers are local governments, who would see state assistance programs slashed by $70 million. In exchange, some restrictions imposed by the state are lifted, allowing cities and counties to raise additional revenue.
For instance, a state requirement setting a $5 cap on parking tickets is lifted and cities could charge whatever they want. It also eases requirements that local proceedings be published in a newspaper, and lets cities force new police officers to attend the Iowa Law Enforcement Academy at their own expense.
In addition, the measure establishes a $10 million loan program to help cities and counties find new ways to become more efficient.
The cutting comes by eliminating a $51 million state program picking up the cost of personal property tax exemptions, eliminating a $7.9 million measure allowing the franchise tax to flow back to local government and cutting in half the state's traditional program of paying local governments for an exemption to the machinery and equipment tax, a $10 million savings.
Gov. Tom Vilsack had asked lawmakers to squeeze $88 million in efficiencies from state government and Republican legislative leaders increased that to $128 million.
Other major cuts include:
* Creating five "charter agencies" free of many state personnel and bureaucratic requirements, in exchange for a 10 percent budget cut. No specific agency is named, but those picked will be exempt from additional cuts for two years.
* Slashing $20 million in spending on state Area Education Agencies, allowing them to recoup a portion of the cut by dipping into reserves.
* Slashing $10 million from child welfare programs, and establishing a system where care providers bid to offer services and must guarantee a level of quality.
* Slashing $10 million from the Medicaid program offering health care to the poor. In the first year, lawmakers tapped one-time revenue sources to make up that cut, but say that in future years reform of the system will yield savings. The reforms are unspecified.