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Representative Ro Foege
Report from the Iowa Legislature
March 21, 2004
State Budget Work Begins
The Legislature is expected to finish up the session in early April, and the state budget must be approved before we adjourn. Last week the long awaited budget spending targets were released by the majority party. The major difference between the Governor’s budget and the majority party’s budget proposal is the use of the cash reserve funds. The majority party takes $160 million from the cash reserve or “rainy day fund,” rather than creating any new sources of revenue.
It is interesting to note that for the past several years, Democrats have put pressure on the majority party to use rainy day funds to help us through these lean economic times. Now, they have decided to drain not only the “rainy day” buckets, but they are also raiding the Senior Living Trust Fund. The Senior Living Trust Fund will have only about $20 million remaining of the $380 million we originally received from the federal government. Draining these “rainy day” buckets will leave the state without a cash reserve. That means the state will most likely have to borrow money to ensure its bills are paid on time. Without a cash reserve, the state budget is in a precarious financial position should revenue projections fall short as they have two of the last three years.
Iowa’s school funding is one of the most difficult issues of this session. Brad Manard, Superintendent of the Solon District wrote about the current difficulty facing Solon Schools. He informed us that over the past three years, the reduction of funds appropriated by the state legislature has resulted in $1.12 million in lost funding for the education of Solon’s children. That is a typical story from across the state, from large schools to small schools.
Last week, when there was a concern that the Wells Dairy, producers of Blue Bunny Ice Cream, would move their corporate headquarters out of Iowa, the Iowa House, Senate, and Governor acted with great haste to update Iowa’s tax incentives in order to keep them in Iowa. The bill was passed by both chambers and signed into law by the Governor in only one week! We need that same sense of urgency to protect the quality of our local schools. Excellence in our education systems is the best economic development tool we have in Iowa. It is Iowa’s biggest advantage in the global marketplace.
There was good news from the Capital last week when the Revenue Estimating Conference (REC) revised the state’s growth projections somewhat higher. The REC predicted that Iowa revenues will increase by 1.8% rather than the 1.2% that the current budget is based upon. That translates into $52 million of additional help to education, health care and public safety for Iowa citizens in the next fiscal year. With the new economic forecast, allowable growth could be set somewhere between 4% and 5% for the 2005-06 school year rather than the inadequate 2% which passed and then by the Governor.
The primary task of the remaining legislative session is to approve a balanced budget. An initial overview of the proposed budget indicates that we will fund our prisons, community corrections facilities and public safety department at the levels recommended by the Governor. However, it appears that education, health care, medical services, child protection services, and in-home services for senior citizens will be woefully under funded.
The familiar old commercial said, “Pay me now or pay me later.” If we continue to under fund health care, child welfare services and education, we will be paying the price in the future, when we will be required to build additional prisons. As a chief of prison correctional officers once told me, “Quit building prisons. Put more money into early childhood care and education.”
I look forward to visits from constituents at the Capitol. If you cannot visit the Capitol, you can write me at the State Capitol, Des Moines, IA 50319; call 515/281-3221 or e-mail me
at
ro.foege@legis.state.ia.us.
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