To: Iowa Statehouse Reporters
From: Rep. Chris Hall, Ranking Member of House Appropriations Committee
Date: March 29, 2017

Re: Surplus to Deficit — The GOP Budget Mess

As the Legislature approaches adjournment next month, lawmakers will be turning more attention to the state budget. When the state’s non-partisan budget experts met in mid-March, we learned the Republican Majority and the Branstad-Reynolds administration have turned a $927 million state surplus (FY ‘13) into a $130 million deficit this year (FY 17).

While Republicans are quick to blame others instead of taking responsibility, the state budget is in deficit this year because of their own failure to adequately manage the state budget. In January, Iowa students and working families were forced to make up for GOP’s budget mess and now Republicans plan to tap the state’s emergency funds to cover the $131 million state budget deficit.

First, the state budget deficit is largely the result of new corporate tax giveaways that have increased exponentially and now top $500 million annually.1 Those giveaways have not produced the economic growth Republicans promised and, instead, have slowed the state’s economy.2 The Branstad-Reynolds administration has failed in its promise to create 200,000 jobs and raise family incomes by 25 percent.


Source: Legislative Services Agency, Fiscal Services Division

Second, the growing deficit is the result of Republicans breaking their own promises and ignoring their own budget principles. As you can see in the chart to the left, Republicans spent more than the state collected and used one-time money to fund on-going needs in FY 15, FY 16, and FY 17.

2018 Budget Starts in the Red

The lack of fiscal discipline by Republicans over the last several years creates significant challenges for the 2018 state budget. Changes recommended by the Branstad-Reynolds administration make further cuts to Iowa’s most vulnerable citizens – seniors, the disabled, and children.

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 steadfast fiscal principles after breaking them for three years straight, and have done so at the expense of their own constituents.
Iowa students and working families are now being forced to pay for the GOP tax giveaways and fiscal mismanagement. This session should be immediately viewed as historic in terms of putting corporate interests before those of working families in Iowa.

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 excessive giveaways. Fiscal discipline is both what the state can afford and where those dollars are invested. 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 or 712-490-2088

1. “Iowa’s Budget shortfall traced to 2013 tax cut”, Associated Press, 1/23/17
2. “State will dip into cash reserve to cover current year’s budget plan”, Radio Iowa, 3/14/17
3. “Branstad reduces proposed budget by $173 million”, DMRegister, 3/28/17