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Representative Ro Foege
Report from the Iowa Legislature
April 27, 2003
Reinventing Government?
In the past year Governor Vilsack recommended that the Legislature look at ways to streamline state government. The original idea was to find ways to make government work smarter and more efficiently, while saving money in the process. The Governor hired the Public Strategy Group, a consulting firm from St. Paul, MN. From the beginning, it was understood that it might take some additional funding up-front to achieve cost savings in the longer term, but the ultimate result would be significant savings in the state budget.
But instead of that approach, the Republican leadership last week presented us a version of “reinventing government” (HF 691/SF453) that was short on reinvention and long on slashing state funding to the child welfare system and Area Education Agencies (AEAs), while shifting the tax burden to local governments.
The Governor recommended finding $88 million in savings in his 2004 budget. The Republican leaders proposed making $128 million cuts. The Republican version is exactly the bill that passed the Senate at 3 A.M. and then passed the House at 7 P.M. last Friday with 51 Republican votes. Three Republicans were allowed to vote NO with all the Democrats in opposing the bill.
More than half of the cuts come from local governments. The bill cuts state funded property tax credits, machinery and equipment payments, and franchise tax to local government by $70 million. This is accomplished by reneging on the property tax replacement dollars the state has been providing to counties and cities. This will reduce state payments to the some of the following communities in House District 29: Solon by $24,980; Shueyville by $2,531; Ely by $13,562; Swisher by $13,551; North Liberty by $52,576; Oxford by $9,161; Lisbon by $21,060; Mt. Vernon by $52,098, Central City by $18,300; Springville by $14,200; Marion by $299,667. In addition, Linn County will be cut by $800,084 and Johnson County by $404,854.
We guaranteed local governments we would make these payments. Our failure to keep our promise gives them little choice but to cut services or raise taxes. And, this occurs after their 2004 budgets have been established.
The state's AEAs stand to lose $27.5 million under this plan. Specifically, $10 million would be taken from the ending fund balances and another $10 million from a reduction in state aid earmarked for special education. That's on top of $7.5 million the agencies lost last year and will never recoup. AEAs have no taxing authority. Federal and state statutes mandate special education. Therefore, AEAs will have to raid their media and educational services funds (which come from local property tax revenues) to make up for the special education shortfall.
The impact on students and schools will be devastating. Not only will educators lose the professional development and support services provided by the AEAs, but students will also be deprived of many of the basic services, learning resources, and technology support the AEAs offer.
The bill also requires the Department of Human Services to redesign the state's child welfare services, including reducing funding to children's services by $10 million. Imagine, we are going to cut $10 million from the child welfare system to improve it! This budget recommendation comes on top of $30 million in cuts to child welfare over the past two years. In the past two years, 258 foster care beds have been eliminated, 82 service programs closed, and more than 500 workers laid off. Right now, 137 children are on a waiting list for group care. Taking away $10 million will hurt Iowa kids.
In support of an amendment I helped develop to reduce the cuts to children services, I informed Iowa House members that a cut to the AEAs also hurts kids in the child welfare system. One example is that when the court orders children to residential treatment facilities, those services are paid for by child welfare funds. Many of the treatment facilities, such as Four Oaks in Cedar Rapids and Monticello, Tanager Place in Cedar Rapids, or Bremwood in Waverly, have classrooms for these children with emotional and behavioral disorders. Those classrooms are staffed by AEA teachers and support personnel. I concluded my remarks by saying that we should pay more attention to our vulnerable children and pay less attention to powerful, high paid consultants from out-of-state.
Democrats did offer alternatives to these drastic cuts and tax shifts. We could use the $47 million from the ‘03 ending balance of the general fund rather than putting it into the state’s savings account. With the cooperation of the AEAs, we could use $10 million from their ending unreserved balances. We could also scrape and scrounge to find another $31 million in savings and cuts (some are contained in the bill that passed) to arrive at the Governor’s recommended $88 million in his ‘04 budget.
The “reinvention” label will not fool Iowans. Shifting taxes from the state to local governments is not reinvention, it is a shell game. The state should not balance the budget on the backs of property tax payers, children, police officers and firefighters. Reinvention takes careful study and priority setting and compromise. Unfortunately, that did not happen in this legislative session.
You can write me at the State Capitol, Des Moines, IA 50319; call 515/281-7328 or e-mail me at
ro.foege@legis.state.ia.us.
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