Governor Culver’s 10% across the board reduction, has left me with mixed emotions.
On one hand, I have to be pleased that the Governor has finally, at last, taken action. Cutting $565 Million is necessary – to balance the FY 11 budget, not the FY 10 budget. But more on that in a moment.
My concern with Culver’s cut is the indiscriminate nature, the increase to property tax payers, and the effect it will have on school districts and public safety.
I believe that a 10% across the board cut is a dumb and lazy way to solve Culver’s budget problem. Iowans need a smarter solution.
There is no doubt that education will feel the pain of budget cuts along with the rest of state government, but I contend there is a smarter way to do it. Rather than cutting all education programs equally, Culver and the Legislature should first eliminate education programming started in just the last few years – like the pre-school plan that delivers only 10 hours of pre-school at a cost of $53 million to the tax payers. Almost $2 million is being spent on developing model core curriculum, and the Regents will spend almost $27 million on library acquisitions. Cutting those items would lower the cut K-12 school would need to endure.
Considering that hiring decisions for the school year were made months ago, and the kids are already in class, I think a more appropriate cut to schools would be to zero out their allowable growth for the year – take them back to the same funding level of the 08/09 school year. Instead Culver took them back to 07-08 funding levels – but left in place the requirement to do things like provide pre-school programs and provide two years worth of negotiated salary increases.
Considering that property taxes are likely to skyrocket over $250,000,000 due to Culver’s actions, its worth looking at smarter cuts. For instance, pulling the plug on the Power Fund and the Office of Energy Independence would save $25M. Delaying the purchase of new vehicles for the state fleet would save $11M. Elimination of the funding for commercial service airports saves another $1.5M. Eliminating the line item for family planning from the budget saves only $10,000, but elimination will stop the program from growing again. While politically popular, eliminating the line item for “un-used” shelter care beds, the JEL programming and All Iowa Opportunity Scholarships would save another $7,500,000, which would stave off cuts to more meaningful programs. In addition the paper clips have to be counted – last session my fellow Republicans identified over $10M in office supply reductions, but the cuts were never enacted.
When the budget is tight, this is the worst time for the state to be spending $10,000,000 acquiring land for the REAP Open Spaces program. Save those dollars to avoid a property tax increase for the rest of us.
Tough times like this also call for doing business differently; like consolidating the administrative functions for 23 different early childhood programs into a single administrator – projected savings a minimum of $2M.
Iowa should look at consolidating IT procurement and services from multiple state agencies into one – and consider what we can outsource – projected savings $20,000,000.
Businesses often refocus on their “core competencies” – basically sticking to what they do well, and jettisoning what they don’t. State government should do the same, and I think running a phone company and Internet provider would fail to make the list of things government must do, or does well. It is long past time to sell the Iowa Communications Network, get out of the phone business, and plow the $15,000,000 we could get from selling the backbone of fiber back into the budget.
State government also has to look at under-utilized resources. Our facility in Cherokee currently has empty space and beds. Iowa should look at housing out of state prisoners at that facility and charge a price that would defray a minimum of $1,000,000 that Iowa currently spends there.
Lastly, salaries of state employees must be considered in order to save jobs in priority areas. The private sector has been imposing salary freezes and cuts to save head count. The public sector should not be immune from making those same sacrifices. If state government were to reduce salaries by 2% for those employees making less than $40,000 a year; 4% for those making less than $50,000 a year; 7% for those making less than $100,000 a year, and 10% for those making more than $100,000 annually; the tax payers could save over $75,000,000.
Those would all be smarter cuts; that set priorities and protect the taxpayer. They are enough to balance the FY10 budget.
I said earlier that Culver’s actions were more about balancing FY11 that FY 10. I said that because Culver only needed to cut 6.7% to balance the FY 10 budget. According to the new balance sheet from the non-partisan fiscal bureau, his actions have now created an $188M ending balance. The reason Culver cut a full 10% is because he now has to admit that the economy won’t rebound enough to close the $1 Billion gap in the FY 11 budget. Cuts made in FY 10 will carry over to FY 11, so the more he does now, the less he has to do as election day draws closer.
The changes wrought by Culver’s actions threaten to disrupt school districts and put vital services like public safety in jeopardy. Iowa needs smarter solutions. That’s why I’m running for Governor and asking for your help and support.
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