Report: Aging population could strain state budgets
By Fred Love Journal Des Moines Bureau | Posted: Tuesday, December 02, 2008
DES MOINES n Iowa’s aging population could strain the state’s ability to fund education and health care over the next two decades, according to a study released Monday.
The study, from the Iowa Fiscal Partnership, a nonpartisan budget think tank, showed that the state may struggle to meet its health care obligations to the growing proportion of older Iowans while also maintaining funding for public education.
“Something’s going to have to give,” Peter Fisher, research director at the Iowa Policy Project and co-author of the report, said during a telephone news conference.
The study reports that 22 percent of the state population will be over age 64 by 2030, which will saddle the state with a greater demand for government programs that help older and disabled citizens with health costs.
Dr. Kristi Walz, medical director of Siouxland Community Health Center, estimates 75 percent of her patients in the Sioux City facility are 50 or older. Many of them are being treated for chronic health conditions such as diabetes, high blood pressure and arthritis.
Walz said the increase in older patients covered by Medicare will likely affect hospitals more immediately than the health center, which is a government-run nonprofit agency and receives a higher reimbursement rate for those patients. However, she said the effects will eventually be felt by everyone in the form of rising costs.
The report also found that the cost to put a child through public education will rise by an average of 5.1 percent per year during that time.
That's cause for concern for school districts that are already getting less state funding as student enrollment declines. Bill Stoneburg, chief financial officer for Sioux City Community Schools, said the district's enrollment was 13,735 on Oct. 1, down about 400 students from 2005. The district currently gets $5,546 per student in state aid to education.
State revenue likely won’t keep pace with the rising costs of health care and education, which currently make up the majority of the state budget, according to the report.
State revenue as a share of the state’s economy has dipped over the past 15 years, and the report blames that trend on what it calls aggressive tax cuts beginning in the 1990s.
Fisher said state income tax preferences for the elderly mean that the fastest-growing segment of the population is shouldering a lighter tax burden. And he said state policymakers should weigh the long-term consequences of fiscal policies intended to deal with the currently staggering economy.
Senate Minority Leader Paul McKinley, R-Chariton, said encouraging job growth in the state would widen the state’s tax base and counter the impact of an increasing number of retirees by attracting and keeping young professionals in the state.
Rep. Deborah Berry, D-Waterloo, said the Legislature must direct funding toward some immediate needs, such as disaster recovery, that take precedence over long-term considerations.
“The needs are immediate, and those needs exist now,” Berry said. “I think our focus has to be on the immediate.”
But she said lawmakers also must find a way to take care of senior citizens who need help with health care costs.
Berry said she would consider opening up the state’s Senior Living Trust Fund, which is designed to pay for assisted-living institutions or help seniors stay in their homes, to a wider variety of uses, including to help pay for health care.
Fred Love can be reached at (515) 422-9061 or fred.love@lee.net.
Journal staff writer Molly Montag contributed to this report.
The study, from the Iowa Fiscal Partnership, a nonpartisan budget think tank, showed that the state may struggle to meet its health care obligations to the growing proportion of older Iowans while also maintaining funding for public education.
“Something’s going to have to give,” Peter Fisher, research director at the Iowa Policy Project and co-author of the report, said during a telephone news conference.
The study reports that 22 percent of the state population will be over age 64 by 2030, which will saddle the state with a greater demand for government programs that help older and disabled citizens with health costs.
Dr. Kristi Walz, medical director of Siouxland Community Health Center, estimates 75 percent of her patients in the Sioux City facility are 50 or older. Many of them are being treated for chronic health conditions such as diabetes, high blood pressure and arthritis.
Walz said the increase in older patients covered by Medicare will likely affect hospitals more immediately than the health center, which is a government-run nonprofit agency and receives a higher reimbursement rate for those patients. However, she said the effects will eventually be felt by everyone in the form of rising costs.
The report also found that the cost to put a child through public education will rise by an average of 5.1 percent per year during that time.
That's cause for concern for school districts that are already getting less state funding as student enrollment declines. Bill Stoneburg, chief financial officer for Sioux City Community Schools, said the district's enrollment was 13,735 on Oct. 1, down about 400 students from 2005. The district currently gets $5,546 per student in state aid to education.
State revenue likely won’t keep pace with the rising costs of health care and education, which currently make up the majority of the state budget, according to the report.
State revenue as a share of the state’s economy has dipped over the past 15 years, and the report blames that trend on what it calls aggressive tax cuts beginning in the 1990s.
Fisher said state income tax preferences for the elderly mean that the fastest-growing segment of the population is shouldering a lighter tax burden. And he said state policymakers should weigh the long-term consequences of fiscal policies intended to deal with the currently staggering economy.
Senate Minority Leader Paul McKinley, R-Chariton, said encouraging job growth in the state would widen the state’s tax base and counter the impact of an increasing number of retirees by attracting and keeping young professionals in the state.
Rep. Deborah Berry, D-Waterloo, said the Legislature must direct funding toward some immediate needs, such as disaster recovery, that take precedence over long-term considerations.
“The needs are immediate, and those needs exist now,” Berry said. “I think our focus has to be on the immediate.”
But she said lawmakers also must find a way to take care of senior citizens who need help with health care costs.
Berry said she would consider opening up the state’s Senior Living Trust Fund, which is designed to pay for assisted-living institutions or help seniors stay in their homes, to a wider variety of uses, including to help pay for health care.
Fred Love can be reached at (515) 422-9061 or fred.love@lee.net.
Journal staff writer Molly Montag contributed to this report.
Story Comments
Read More and Post Comments 1 comment(s)
Please note: The following are comments from readers. In no way do they represent the views of The Sioux City Journal or Lee Enterprises. We will not edit or alter your comments, but we do reserve the right to not post or to remove comments that violate our code of conduct. No comment may contain potentially libelous statements; obscene, explicit or racist language; personal attacks, insults or threats. Terms of Service
Grant wrote on Dec 2, 2008 7:37 AM:
(a fact) and there'll probably be plenty of money for Iowa's aged. Period. "