Rod Boshart, CR Gazette –
DES MOINES — State government is slated to end fiscal 2012 with an estimated $595.5 million in reserve — the largest since spending limitations were enacted in the early 1990s.
Iowa code requires the state to have 10 percent of adjusted general fund revenue deposited into its cash reserve and economic emergency fund on June 30 of every year. Holly Lyons of the non-partisan Legislative Services Agency said the state is on track to meet that threshold for the first time since fiscal 2008 (see chart).
Lawmakers credited the flood of money in the state’s “rainy day” fund to several factors — the rebounding Iowa economy, GOP-led efforts in the current fiscal year to hold spending levels below the available revenues, and government streamlining efforts started by Democrats during the Culver administration.
“It speaks to good budgeting practices,” said Rep. Scott Raecker, R-Urbandale, chairman of the House Appropriations Committee.
But Sen. Bob Dvorsky, D-Coralville, chairman of the Senate Appropriations Committee, said it also creates confusion for Iowa residents. How, they might wonder, can the state seemingly can be awash in money while the split-control Legislature is at loggerheads over next year’s budget? It’s like being surrounded by water with nothing to drink.
Along with the full reserves, the newly created taxpayers trust account is expected to be fully funded with $60 million when fiscal 2013 opens, and the state is expected to have an ending balance topping $320 million after all the statutory requirements for this fiscal year’s budget are met.
“We have a balanced budget with the lowest number of state employees in decades and the highest percentage surplus since the early ’80s,” said Sen. Jeff Danielson, D-Waterloo, chairman of the Senate State Government Committee and an architect of recent government efficiency measures. “We’ve reduced our overhead significantly in the state of Iowa. That’s why we have one of the best budgets in the country. In part the economy has been good, but we pay attention to our costs and have made real and meaningful changes.”
The rosy financial projections come at a time when leaders of the House and Senate and GOP Gov. Terry Branstad are wrestling with budget differences that are making lawmakers work overtime to reach agreements and adjourn the election-year session (related story, 5A).
House Republicans and Branstad have agreed to hold overall spending for the fiscal year that begins July 1 below the roughly $6.252 billion in projected net state receipts. That’s even though the 99 percent spending limitation law would allow appropriations to top $6.45 billion — a figure that combines estimated tax collections and the previous year’s carry-over ending balance once the reserves are full.
“We’re using a principle that we believe Iowans sent us here for,” Raecker said, “which was to not spend more money in ongoing expenses than the money we’re taking in. We are going to mirror up our ongoing revenues for ongoing expenses.”
In their budget proposals, House Republicans have called for rolling the ending balance into the taxpayer trust account to create a $380 million pool of money to use to provide future tax relief. House Speaker Kraig Paulsen, R-Hiawatha, noted a previously passed House bill seeking to cut state income taxes by 20 percent. That measure was not taken up by the Senate, but he said it might be one option among many for returning that money to taxpayers.
Senate Democrats’ budget plan includes the $60 million for tax relief but does not earmark the ending balance for specific purposes, although Dvorsky said there may be one-time costs in the current fiscal year where some of those funds might be appropriately spent. Lawmakers earlier this session approved a supplemental appropriation to fund prison operations and other programs through June 30.
Senate Majority Leader Mike Gronstal, D-Council Bluffs, said he would prefer to use the $60 million to meet a GOP budget demand that the state pick up an extra $27.5 million in property tax credits for local governments in fiscal 2013. Republicans reject that suggestion because they say it would be using a one-time source to pay for an ongoing expense, which would fall outside of their budgeting principles.
“I think the first thing we need to do is to fund the services that people want and demand adequately,” Dvorsky said.
Nice to see the Republicans doing their job and holding down costs.
Now give us our money back!
That money will go to some rich people for a tax break that they don’t need.
That don’t happen. You are spreading propaganda for the socialists. Everybody gets tax breaks, including you.
This thing about always blaming the rich is lame. Not a shred of fact in it. When it comes right down to it, the rich pay way more in taxes then they should have to.
It’s the knuckle-draggers that keep bitching so they can get free government money.
You sound like one of the knuckle-draggers.
You can think what you want. I have never been on welfare in my life. Raised three kids with my wife and worked hard. Have never made more than $33,000 and have always paid more than $52.00 in state taxes unlike our govenor who made $190,000. Not saying I wouldn’t do the same if I could but that is screwed up. Dems tax and spend, Rep tax cut and spend. We need to get rid of both!