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From the Desk of Rep. Betty DeBoef

The fiscal challenge ahead of us

February 2, 2009
Toledo Chronicle, Tama News-Herald

The House has completed the early formalities here at the Iowa Capitol. The long partisan campaigns of last summer and fall are memories. Veteran members renew acquaintances, and everyone is getting to know the new members.

The Governor and the Chief Justice have delivered their Condition (of the State) addresses before respective joint sessions and have gone back to their offices. The Governor wants to "borrow now and pay later," meaning Iowa taxpayers would be paying for these projects over the next twenty years. The Chief Justice wants to make the Judicial Branch more efficient.

It's time to get down to business and do the people's work. That means it is time for your elected officials to deal with one of the most serious budget crises since the great depression. I realize the news media reminds us constantly of the national economic situation. The impact of the slowing economy is now being felt by our state and local governments, as tax revenue dries up and the demand for services increases. Before the Legislature is finished this year, the services performed by state government will be greatly affected.

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Senator Gronstal told his fellow Senators, "Our resources are limited. We will say 'no' to many good ideas. We are going to disappoint some people and frustrate others. If your idea of being an elected official involves being loved by everyone, the next few months will be pretty tough."

On opening day our new Republican leader, Kraig Paulsen of Hiawatha, spoke of the gravity of the situation facing everyone in Iowa. "We, in this session, will be facing difficult and sometimes painful decisions. But they are certainly no more difficult or painful than the decisions that Iowa's families and taxpayers are making everyday. We must remember that state government is not the only entity facing uncertainty. With that in mind, we must protect families and taxpayers--not ask them to dig deeper in their own pockets to solve a budget problem that this Legislature created for itself. "

I received word today from the Legislative Fiscal Bureau that Personal Income Tax receipts have fallen $60 million short of the new estimate made by the Revenue Estimating Conference in December. If revenue continues to decline, the hole in next year's budget could be $1 billion. You may be asking yourself how could next year's budget be short of funds already when the Legislature has not passed it yet? It is because the state has growth in on-going programs like Medicaid and state employee salaries, and the Legislature promises to increase spending certain programs in future years.

Representative Paulsen reminded the House on opening day of how the state got into this predicament: "Since it is impossible to move forward without first understanding your past, we need to remember something. When the 82nd General Assembly closed its doors in May, we walked out of here $563 million in the red. Today, due to the hardships and disasters of 2008, we walk in here $779 million in the red. But let's be clear about this. The initial shortfall of $563 million was not caused by George W. Bush or Congressional Democrats as some have claimed, it was not caused by sliding stock markets or housing crunches. It was caused by a lack of discipline and a failure of duties with Iowan's dollars."

It is the built-in spending growth that has everyone concerned. In a budget year like this, where there is no additional tax revenue, for every new dollar spent there must be a dollar cut somewhere else or a new dollar paid into the treasury. For example, if we accept 4% allowable growth for our K-12 schools, $100 million must come out of the budget. If we were to fully fund the state employees' salary increase, $100 million must be found. If we fully fund the property tax credits which provide relief to our local property tax payers, $160 million must be eliminated elsewhere in the budget. These represent just $360 million of the potential billion dollar problem.

You would think the Governor and the Legislature would get to work on this right away. That's not the case. In the past, Governor Culver and the governors before him presented their budget when they gave the Condition of the State speech. That didn't happen this year. Instead, Governor Culver said he would deliver his budget by the end of the month.

For the Legislature's part, Democrat leaders have decided to reduce the budget committee meetings by one-third. At a time when we need more time to look at every program and where every dollar is going, your elected representatives are going to spend less time than ever doing the people's business. What's going to happen instead? Some in the media are reporting that the budget decisions will be made by leadership in the backroom and will be presented to the Legislature in April with the message" Take it or leave it". That's not the Iowa way. Iowans understand the problems we face, and they want to have a say on how their tax dollars are spent. They deserve an open process, where everyone is heard and every option is presented to them for discussion. More than ever, we need transparency in our budgeting process. Unfortunately, that is not what Iowans are getting from their government.

Question of the Week

What should we do to balance the budget? Does the state have programs that need reviewing? What could we do that would improve quality while at the same time reduce cost?

I would appreciate your input. My phone number at the Capitol is 515-281-3221, or e-mail me at betty.deboef@legis.state.ia.us. I would welcome visitors at the Capitol, too!

 
 

 

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