Iowa’s state budget woes

The governor independently decided to cut the state’s F. Y. 2008-09 budget by implementing an across-the-board reduction of ten percent. Just this week legislators received an email detailing the cuts for each department. Department heads, who work for the executive branch of government, were given their respective reduction targets, and had a deadline to make their intended budget cuts known to the Department of Management and the governor.

The details are such that one can agree with some, and disagree with others. That would be expected, for each of us has our own area of interest and concern. Collectively, the cuts affect our society in a significant manner, whether its education, health, human services, park maintenance, law enforcement, or any of the myriad of citizen services.

These cuts exceed a half billion dollars, and with such action meet the constitutional requirement of a balanced state budget. Justifiably, I have been asked by some as to the reason cuts had to be made, when a smaller state budget could have been sent to the governor by the legislature last April. The answer is simply the fact that Iowa, like most states in the nation, develop their budget based on estimates presented by a “revenue estimating committee.” Needless-to-say, this can be dangerous, as “estimates” are just that! Although these estimates have held up well in the past, sooner or later extraneous elements enter the equation, and revenue does not meet expectations. By law, Iowa can not budget more than 99% of revenues, with the extra one percent going into a “Rainy Day Fund,” otherwise known as the “Economic Emergency Fund.” Today, that fund has in excess of $350 million.

Of little consolation is that fact that nationally, Iowa’s budget woes were far, far less than other states. Every state has been severely impacted by the global recession, with less revenue as the result of reduced spending (sales taxes) and an unemployment figure of just less than ten percent (income taxes). Next week, the Nebraska Unicameral will have a special legislative session to balance their state budget. I actually wish we had been called back into a special session and targeted the cuts, rather than have them applied equally.