Tightening the state’s belt
A substantial amount of work is being done behind-the-scenes to lessen the shock that legislators will face in the coming session, which commences on the second Monday of January. The more the governor and the executive branch of state government can accomplish now in reducing proposed spending for fiscal years 2010-2011, the greater the opportunity for both Republicans and Democrats to work together in developing and passing a new balanced budget.
The Economic Emergency Fund, comprised of approximately $360 million, will probably be utilized to reduce the possibility of additional state budget cuts that could cause local taxing bodies to call on property tax increases to meet their commitments. Even with that, nearly a half billion dollars in spending reductions will be necessary to coincide with revenue projections. With federal stimulus money being a one-time infusion for state governments to lessen the economic effects of the global recession, it is now the responsibility of lawmakers to trim state spending to reflect the fact that these federal funds were utilized to prop-up the current year’s budget. That bucket is bone dry!
Actually, Iowa is one of the more fortunate states in that our budget shortfall is minor in comparison. Ten states are facing budget disasters that will mark their ability to grow for years to come. Arizona’s budget woes are so dire that the state’s lawmakers are giving consideration to mortgaging their capitol and other state buildings. California has issued IOUs to pay their bills, and Michigan, with the nation’s highest unemployment rate, has had to eliminate several health care programs while cutting school funding in half.
Along with these three, Washington DC’s “Pew Center on the States” found that Florida, Illinois, Oregon, Wisconsin, Rhode Island, New Jersey and Nevada are “barreling toward economic disaster.”
Judy Lin, an Associated Press writer asserts that “historically, states have their worst tax revenue year soon after a national recession ends. At the same time, joblessness and underemployment mean more people need government-sponsored health care and social safety-net programs, further taxing state services.” In my view, a speck of light is visible at the end of the tunnel.
Iowa’s financial problems are miniscule when compared to these and most other states. This fact is not meant to minimize or justify our dilemma, but rather point out that no segment of government can avert the ravages of the economic calamity that has dominated the past two years. Even Nebraska, known to be one of the most conservative states, last week had their unicameral legislature return to Lincoln to make massive reductions and adjustments to their budget.
The reports are in from all the departments of state government, and final details are being tweaked by the governor’s office and Department of Management to cause the least possible harm to state employees, their families and the taxpayers of Iowa. Much work is yet to be done, and rightfully, that is our constitutional duty when we return to the capitol in January.
With bipartisan cooperation, I anticipate a highly compressed session, not to exceed 80 days, spent almost entirely on budgeting and initiating state reorganization. Very little “policy” legislation will be passed, and virtually none that requires an appropriation. The belt will be very, very tight.
Questions or comments? Call me at 515-975-8608, or email dblack@black4senate.com I always value your opinions.
