To: Iowa Statehouse Reporters
From: Rep. Chris Hall, Ranking Member of House Appropriations Committee
Date: September 19, 2017
Re: Special Session or Cook the Books? The GOP’s Budget Mess
While the state’s fiscal year ended back in June, lawmakers are still waiting to see if Gov. Reynolds will be forced to call us back into a special session to finally close the books on the 2017 Fiscal Year (FY17).
In anticipation of the third round of budget cuts or transfers this year, Iowans are beginning to understand the state’s budget mess is a result of the GOP’s failed economics. Even Republicans outside the State Capitol are beginning to realize the GOP’s fiscal irresponsibility in Des Moines created the state budget mess.1
The GOP is no longer managing a checkbook budget like the average family, they’re running a credit card budget, and doing it to sustain Kansas style tax cuts and corporate welfare.2
It’s a careless way to budget that leaves Iowa taxpayers holding the bill. Students are now paying higher tuition. Fewer at-risk kids will attend preschool this year. Nursing home inspections and elder abuse claims are going without investigation. Homeowners are paying higher property taxes. People are dying on the state’s watch.3
Iowa would not be faced with a budget deficit today if the GOP had spent more effort managing the state budget, rather than pushing the agenda of their donors and outside special interests. They’ve abandoned their own fiscal principles for four years straight and have done it at the expense of Iowans.
Surplus to Deficit: How the GOP’s Created the State Budget Mess
In January, the GOP cut $113 million from the state budget to keep it in the black.4 Then the GOP borrowed $131 million from the state’s savings accounts before session ended, to be repaid by taxpayers later.5 When FY17 ended on June 30, estimates showed the GOP would be forced to borrow another $104 million to cover the shortfall.6
In the last four years, Reynolds & the GOP have turned a $927 million surplus into a $349 million deficit.
Given the ongoing budget mess, there are only two options left for Reynolds and the GOP to fix the state’s budget deficit. Governor Reynolds can a) call the Legislature back for special session and request to borrow another $50-$104 million from the state’s savings accounts or b) take less than $50 million from the state’s savings accounts and instead use budget gimmicks (delayed payments), shell games (transfers), or two sets of books to cover the deficit.
In either case, Iowa taxpayers will be on the hook to pay off the credit card bill Republicans have racked up in the neighborhood of $200 million.
The state’s budget deficit is the result of uncapped and automatic tax breaks that have increased since Gov. Reynolds took office, and now cost taxpayers more than $500 million annually.7 That’s $1 of every $12 in the state budget. Those giveaways have not produced the economic growth Republicans promised and, instead, have slowed the state’s economy.8 Reynolds & the GOP have failed in their promise to create 200,000 jobs and raise family incomes by 25 percent.
Instead of being honest with Iowans about the state’s budget woes, the GOP is pointing the finger at everyone else — agricultural producers & the state’s non-partisan budget experts – rather than correct their own culture of indecision.
If you look at the track record of the state’s non-partisan budget experts, it’s pretty consistent. Over the last 22 years, their projections have been within 0.58% of gross state revenues for a multi-billion dollar budget (averaged). The slow down of the ag economy and declining farm income were included in their projections. Contrary to GOP talking points, the state’s budget shortfall was the direct result of corporate tax giveaways, growth in tax credits, and federal/state tax code changes.
House Democrats believe we need to restore fiscal discipline to the state’s budget-making process, and ensure Iowans no longer have to pay for the GOP’s borrowing spree. Taxpayers can’t afford it. The state budget needs to be re-balanced to prioritize people before corporate welfare, and a skilled workforce over top-down economics.
For more information, contact Rep. Hall at firstname.lastname@example.org or 712-490-2088
1. Cedar Rapids Gazette, 9/10/17
2. Des Moines Register, 9/17/17
3. Des Moines Register, 8/12/17
4. Senate File 130
5. Senate File 516
6. Legislative Services Agency Monthly GF Revenue Memo, 7/13/17
7. Associated Press, 1/23/17
8. Radio Iowa, 3/14/17