Iowa’s budget deficit takes center stage this week as lawmakers begin the process of deciding what they can accept in Governor Chet Culver’s budget, and what they have to reject.
Whether you are a Democrat or a Republican, a legislator or a concerned taxpayer, you’ll be disappointed by the shenanigans Culver played in assembling his budget.
First – Budget Spends Almost $400 Million More Than Receipts
The first game Culver plays with the budget is using “one time” funds for on-going expense. Over $200 Million from the cash reserve will have to be repaid. Emptying out the last $38 Million from the Senior Living Trust Fund means that seniors will get few services, and next year the Governor and legislators will have to figure out how to replace those funds because the Senior Living Trust Fund will no long exist. The last $140 Million in federal stimulus money is used up, with no plans on how to replace that revenue in the future.
The danger of using “one time” funds in the budget is like using your credit card to pay your mortgage or buy your monthly groceries. You know you’ll have the same expense annually, but no revenue source to fund it. Complicating matters – next year you’ll have to find the revenue for the on-going expense, AND pay off the debt.
Iowan’s need a Governor who will end the practice of playing shell games with the budget, and shifting obligations from one year to the next.
Second – Culver’s Property Tax Hike Becomes Permenant
Culver’s across the board cut to K-12 school funding had the result of raising property taxes last fall. When the state doesn’t fund its share of school aid, but leaves the spending requirements intact it has the effect of handing the bill to the local property taxpayers.
While Culver does put $100 Million of the money he takes from the cash reserve fund toward funding the K-12 formula; he still underfunds the formula by $170 Million. That’s $170 Million that will be paid by property taxes.
By leaving the spending requirements and mandates in place, but failing to fund it two years in a row, Culver’s tax hike becomes permanent. Unless, of course, Iowa’s elect a Governor with a plan to turn it around.
Third – Culver’s “Savings” Don’t Add Up
The buzz words for the legislative session seem to be “government reorganization” and “savings.” The problem is the Culver’s consultants my project one amount to be saved, but when the non-partisan legislative service bureau – whose numbers are required to be used by law – crunch the numbers they come out with a far lower amount. One of Culver’s plans to save $200 Million turns out to save only $47 Million. Other parts of Culver’s reorganization may save revenue – but don’t impact the general fund. Still other plans – like scooping $50 Million from the road fund – have already been nixed by his fellow Democrats.
The bottom line is that Culver’s budget may be balanced on paper today, but it doesn’t meet the 99% Expenditure Limitation Law, and can’t be passed by the Legislature even if lawmakers wanted to accept all of his recommendations.
That’s a failure in leadership. Iowans will have a choice this year. They can choose someone who will just play more of the same shenanigans with their money, or choose a new Governor who will focus on property tax relief, and be just as careful with the taxpayer’s money as he is with his families finances.
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