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Iowa House Republicans say revenue growth is less than some Democrats say

The Iowa budget, according to Republicans:

200px-Republicanlogo.svgActual state revenue growth is 2.6%, not 6%. In actual dollars, growth is $180.9 million, not $408.1 million.

Actual state spending last year was $6.995 billion. The new revenue esti- mate is $7.175 billion. The difference is 2.6% or $180.9 million. It is simple math.

Legislative Democrats insist there is 6% growth or $408.1 million. They are ignor- ing actual state spending in doing so. They take the latest estimate on final FY 15 revenue ($6.767 billion) and subtract it from the latest estimate on FY 16 reve- nue ($7.175 billion). The difference is 6% or $408.1 million. But those numbers are irrelevant as long as actual spending
is higher than the estimate.

The state’s Cash Reserve Fund has $522.2 million. It must equal 7.5% of that year’s budget to help cash flow the state during the year. When the Legisla- ture decided to reform the budget pro- cess in the early 1990’s, one of the key elements was ensuring that payments – especially school aid payments – were made in a timely manner.

In the 1980’s, the state did not have a cash reserve fund and payments to schools were not made on time. Schools were forced to borrow money to make payroll as they waited for school aid pay- ments from the state. Schools were forced to incur additional costs because of the state’s lack of fiscal responsibility.

The state does not have a $1 billion sur- plus. Back in 2013 the state had an end- ing balance of roughly $900 million. Since then that revenue has been used to pay off state debt and invest in key infrastructure projects in our Regents institutions and improving water quality. The ending balance is estimated to be $420 million at the end of Fiscal Year 2015 on June 30. If that money is spent, there is no automatic source for it to be replenished.

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