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State Officials Raise Legal Questions on Reynolds Borrowing Plan

September 29, 2017 11:12 am by: Category: 2017 Session Information, Budget, Featured, Recent News Leave a comment A+ / A-

Des Moines, Iowa – In a letter sent to lawmakers and the Governor today, State Treasurer Mike Fitzgerald raised new questions about Governor Kim Reynolds’ plan to borrow from the state’s economic emergency fund to close the state’s books. State Representative Chris Hall, D-Sioux City & Ranking Member of the House Appropriations Committee, called on the Reynolds Administration to provide more details to lawmakers before borrowing additional money to close out the budget for Fiscal Year 2017.

“As lawmakers, our job is to provide oversight and guarantee that taxpayer dollars are being spent responsibly according to state law,” said Hall. “From the budget documents released by the Reynolds Administration so far, it appears that Gov. Reynolds plan to borrow millions more from the Economic Emergency Fund may be in conflict with state code. This isn’t about politics, it’s about following the law. Iowa taxpayers deserve an open, transparent state government.”

The new questions were raised in a letter from State Treasurer Mike Fitzgerald to the Reynolds Administration and key lawmakers. According to Iowa law (Iowa Code 8.55), three specific criteria must be met for the Governor to transfer money from the economic emergency fund. While two of the criteria are met, the third is technical and allows Emergency Fund dollars to be tapped only if receipts have fallen at least 0.5% or greater than previously estimated during the third quarter (March REC estimate). For FY 17, that amount would need to be at least $35 million. According to documents provided by the Reynolds Administration last week, the difference this year is only $11 million.

“The Economic Emergency Fund was designed to be used for real economic emergencies, not mismanagement of the budget. Today’s news is just the latest in a string of mishaps by Reynolds and GOP lawmakers. They’ve borrowed over a hundred million on the state’s credit card this year and Iowans keep getting stuck with the bill,” added Hall.

Earlier this week, Hall sent a letter to State Auditor Mary Mosiman requesting a special audit on the closing of the 2017 Fiscal Year (FY). The state is expected to close the books on FY 17 by Sept. 30.

The letter from State Treasurer Mike Fitzgerald below.

TreasurerLetter-9-29-17

 

 

Fitzgerald

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