On energy. It's time for us to take control of our energy future. It's time to win the race to become the energy capital of the world. It's time for Iowa to break free from our dependence on foreign oil, to become the Silicon Valley of the Midwest and create the jobs of the future that will keep our children here at home, where they belong.
To meet the energy, challenge I am proposing the creation of a $100 million Iowa Power Fund, with a down payment of $25 million this year. This priority is of such critical importance, I am asking the Iowa legislature to authorize a supplemental appropriation immediately. This will help us rapidly develop the next-generation energy economy in Iowa. This new investment will spur the growth of Iowa-based businesses in this exciting new industry, create jobs, and attract millions of dollars in public research and development funds. It will also result in hundreds of millions of dollars in private investment in renewable energy in Iowa. In addition, the Power Fund money will be used to help conduct the important research and development necessary for all forms of renewable energy and alternative fuel.
On education. I believe we need a comprehensive pre-K to postsecondary education plan and that's why I propose investing nearly $190 million in new funding for education. I'm also asking lawmakers to make an additional $20 million commitment to early childhood education. This step is part of annual increases in funding necessary until every Iowa four-year-old has access to preschool. To improve education at the K-12 level, we've set aside an additional $165 million, which represents an increase from fiscal year 2007 of 6.5 percent. This will help us reach our goal of getting teacher pay to 25th in the nation. A $70 million investment in teacher pay is the largest ever. This unprecedented investment in teacher pay will allow us to recruit and retain the best teachers, close the gap in teacher pay between urban and rural school districts, ensure quality teaching, and most importantly, show our classroom teachers the respect they deserve for the important work they do every day.
Finally, we must renew our commitment to higher education. Today, there are real challenges for Iowa college students and their families. Iowa is at the bottom among states when it comes to needs-based access to higher education and at the top when it comes to student debt load. This is not a good combination, and we must do something about it. The rewards of investing in educational excellence will be with us for generations to come.
On healthcare. Perhaps the biggest and most expensive challenge we face, however, is in the area of healthcare. Two hundred fifty thousand Iowans, including 50,000 kids, have no healthcare coverage. So, in an attempt to significantly increase access to quality healthcare for all Iowans, my budget proposes an additional $140 million to meet our most immediate healthcare needs. I believe the only responsible way to pay for it is an increase in the tobacco tax. I want to see Iowa's cigarette tax increased by $1 per pack. This step will generate approximately $140 million in new revenue the first year.
There is one more important step the state of Iowa is taking related to healthcare and saving lives. I am proud that on February 28, 2007, I signed into law a bill that lifts the ban on stem-cell research. The healthcare budget I have outlined will allow us to create the Center for Regenerative Medicine at the University of Iowa, with a commitment of $12.5 million. We are well-positioned, as one of only 15 National Cancer Institute sites in the country, to forge ahead in the search for life-saving cures for diseases like cardiovascular, diabetes, cancer, Parkinson's, and Alzheimer's. We have the chance to bring hope to thousands of Iowans suffering from these life-threatening illnesses. It is my goal that Iowa be known as a center for science research and technology, not only in energy but in the health sciences as well.