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Branstad and Reynold propose use of state reserves to cover latest budget crunch

DES MOINES – Iowa faces a $131 million budget crunch according to the latest state revenue projects, and Governor Terry Branstad and Lt. Gov. Kim Reynolds say reserves can cover the shortfall.

After the budget shortfall was announced last week, Gov. Terry Branstad and Lt. Gov. Kim Reynolds’ Communications Director Ben Hammes issued the following statement in regards to the March Revenue Estimating Conference:

“Our Iowa economy is growing. But the challenging farm economy, with commodity prices below the cost of production for far too long, has hit our state revenues. Iowa is prepared. The State of Iowa has hundreds of millions in the cash reserve account – the state’s savings account. Gov. Branstad and Lt. Gov. Reynolds propose using our savings in the cash reserves, rather than additional budget cuts, to meet our current fiscal year needs. The State has already made cuts to the current fiscal year budgets but with just over three months remaining in the current fiscal year, additional cuts are not feasible. The Governor and Lt. Governor are committed to reimbursing the cash reserve account in the budgets to be passed this legislative session.”

Americans for Prosperity-Iowa’s state director Drew Klein issued the following statement in light of the revenue shortfall:

“The report released by the Iowa Revenue Estimating Conference demonstrates the serious need for tax reform in Iowa. Years of bad tax policy have created an unstable state economy and left us with big budget problems.”

“Legislators should seek a long term solutions by rethinking the way our state does economic development and by enacting budget reform that will prevent these problems in the first place. Providing Iowa’s businesses and families with the tax relief they need is the best path forward for Iowa’s economy.”

Iowa Democrats also say that corporate giveaways are hurting the state’s budget and a tax reform is needed.

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