Iowa state budget (2008-2009)
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Iowa, like 45 states throughout the U.S., is facing a budget deficit for the current fiscal year and fiscal year 2010. For FY 2009 Iowa is facing a $134 million deficit that the Center on Budget and Policy Priorities projects say will rise to $779 million for FY 2010.[1] Gov. Chet Culver announced in January 2009 that in light of the state's budget deficit more than 80 percent of state programs will be subject to a 6.5 percent budget cut. The Governor has already cut $40 million and made a 1.5 percent across-the-board cut totaling approximately $90 million for FY 2009. "While we’re cutting day-to-day expenditures of state government, we will invest in creating jobs, supporting businesses, and strengthening our economy. And we’re in a position to do it without raising taxes,” said Culver. Approximately $6.2 billion is budgeted for FY 2010. [2] However, some Iowa lawmakers said that an additional $133 million in cuts can and should be made. Legislators suggested increasing Culver's recommended 6.5 percent in budget cuts to 8.5 percent. "These are difficult times for family budgets and the state budget is no different," said Rep. Jo Oldson.[3]
[edit] Impact of budget woes
- Main article: State budget crisis, 2009-2010
- In January the Iowa Workforce Development announced unemployment had risen to 4.6 percent compared to 4.3 percent a month ago and 3.8 percent a year ago. Over the last 12 months, 9300 professional and business services jobs, 7000 manufacturing jobs, and 3800 construction jobs were lost. In total, 77,000 Iowans are currently unemployed.[2]
- Shelby county's mental health budget is expected to be operating in the red by the end of FY 2009 with a fund balance deficit of one percent due to the current year's 1.5 percent cut implemented at the state level. The Governor's proposed 6.5 percent cut next year would further increase the deficit for the county program to a minus 11 percent fund balance. By 2012 the deficit is estimated to be at negative 43 percent.[4]
- In light of the state's deficit Sen. Matt McCoy said that he will introduce a bill to force about two-thirds of Iowa's school districts to merge. He wants to target districts with fewer than 750 students, and free up tens of millions of dollars in administrative costs that could be spent on teachers and students. However school officials worry that the bill will create unequal workloads among superintendents in urban and rural counties and shift the focus away from the students. [5]
- Among the options the Iowa Supreme Court is considering with regards to budget cuts for FY 2010 are reducing non-personnel costs, the reduction of travel, temporary and permanent layoffs and the switch to electronic equipment to record court proceedings. Some judges have also offered to voluntarily participate in furloughs.[6]
- Budget cuts to the judicial branch will also affect the rate at which cases are processed. Officials said that the cuts means that prisoners will sit in jail longer in criminal matters, leading to increased jail costs. Also it is estimated that there will be a decrease in fine collections, which could decrease county and city revenue.[6]
[edit] Budget background
In Iowa state agencies prepare and submit requests by October 1st for the following fiscal year. On December 15 the Revenue Estimating Conference, comprised of the Governor, the director of legislative services agency, and a third member agreed to by the other two, meet to estimate the revenue for the upcoming fiscal year. The Governor then reviews the budget requests by state agencies, conducts public hearings and submits recommendations to the Legislature in January. From January through February the legislature hosts a variety of joint meetings. Once the budget bill is approved the bill is submitted to the Governor, who has line-item veto authority in appropriations bills.[7]
Iowa's fiscal year begins July 1 and ends June 30.
[edit] Budget figures
The following table provides a history of Iowa's expenditures and gross domestic product (GDP).
| Fiscal Year | Expenditures (billions) | GDP (billions) |
|---|---|---|
| 2000 | $17.2 [8] | $90.2 [8] |
| 2001 | $18.2 [8] | $91.9 [8] |
| 2002 | $19.3 [8] | $97.4 [8] |
| 2003 | $19.9 [8] | $102.2 [8] |
| 2004 | $20.6 [8] | $111.9 [8] |
| 2005 | $21.4 [8] | $115.6 [8] |
| 2006 | $23.0 [8] | $121.9 [8] |
| 2007 | $24.7 [8] | $129.0 [8] |
| 2008 | $26.4 [8] | $136.5 [8] |
| 2009 | $28.4* [8] | $144.4* [8] |
- NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.
[edit] Ideas about why the crisis exists
- General Fund revenues, lottery and other transfers, accruals, refunds and gambling estimates for the fiscal year that begins in July were $132 million lower than projections made in October.[9] For FY 2009, the revised estimate of net general fund receipts totals $6,052.0 million, which is $99.5 million less than the October 2008 Iowa Revenue Estimating Conference estimates.[10]
- Mental health budget revenues have been capped for counties in Iowa, according to Shelby county officials. In Shelby county it is capped at a maximum tax levying power of $1.60 per $1,000 taxable valuation, which brings in roughly $885,000 annually. That's the most in dollars the county can tax for, even if valuations go up, the levy is adjusted downward to bring in only those dollars.[4]
- Approximately $525 million is owed to the state in unpaid fees, fine and taxes according to the Iowa Department of Revenues. This excludes the amount owed to individual cities. Des Moines, for example, has more than $1 million in unpaid parking fees.[11][12]
[edit] Proposed actions
[edit] Governor Chet Culver
In late January the Governor submitted a $6.2 billion budget for FY 2010 which includes budget cuts across most state departments and no recommendations for tax increases. Culver said that he would like to cut approximately 6.5 percent to almost every state department. However, Culver said that some departments - education, department of corrections, appropriations to meet requirements of the department of justice, Homeland Security, human services, public safety, victims compensation and workforce development, will be exempt from cuts.[2]
Culver said that he is upset with high salaries at the Rebuild Iowa Office, an agency that Culver created to coordinate flood recovery efforts in 2008. He added that the salaries will be "adjusted downward" in the budget.[13]
In February 2009 Culver signed into law a bill that allows for school budgets to expand by 2 percent during the 2010-11 school year. Additionally the bill increases state funding for elementary and secondary schools by $60 million.[14].
Additionally Culver said that he plans to continue supporting a failed bill known as "prevailing wage," House file 333, that would set minimum pay and benefit standards for workers on public projects."I think it's time we move forward on some important bills that would help hardworking Iowans, and we're going to keep fighting to do that," Culver said.[15]
[edit] Republicans
Republicans said that they aren't pleased with the Governor's budget cut recommendation. Senate minority leader Paul McKinley said,"When you’ve increased spending 21 percent, to cut 7.5 percent is a gesture, but we’re in this mess simply because they’ve spent too much money." [16] House minority leader Kraig Paulsen said that they will propose their own ideas for saving money, such as "getting rid of" the Iowa Communications Network, by either selling it or shutting it down.[9]
In late January Senate Republicans issued their own plan to create a balanced budget, some which include: enact a Constitutional amendment that will prohibit the Legislature from spending more than 99 percent of the revenue taken in by the state, Constitutionally mandate that the Legislature must use the December Revenue Estimating Conference (REC) for the upcoming budget and budget more responsibly and with greater transparency and accountability.“Just from looking at the current state of Iowa’s budget and the massive overspending that has occurred during the last two years, it is clear that Iowans cannot afford to have the Democrats continue the kinds of budgetary practices that have ballooned Iowa’s budget and put us in these tough times,” said Senate Republican Whip Steve Kettering.[17]
[edit] Democrats
Iowa House majority leader Rep. Kevin McCarthy said in late February that he is considering the sale of Iowa's fiber-optic communications network to raise money and ease the state budget. Prior to McCarthy's suggestion the House rejected a similar concept by Republicans through out the state. "I know it's been discussed in the past, but we haven't had this kind of economic challenge before," said McCarthy.[18] However, legislative Democrats said that regardless of the final outcome there is a 2.47 percent gap between the Governor's budget and theirs. In late February lawmakers called for $134 million in budget cuts beyond the Governor's proposed cuts. [9]
Rep. Paul Bell filed a bill that targets owners of mobile or manufactured homes who are delinquent on property taxes by preventing them from renewing their vehicle registration. Bell said that the state needs to do something about the approximately $525 million that is owed the state in unpaid fees, fines and taxes.[12]
[edit] Economic Stimulus Package
Iowa is expected to receive approximately $2 billion from the $787 billion economic stimulus package. According to White House officials the stimulus bill is estimated to create or save 37,000 jobs. [19]
According to preliminary reports Iowa is expected to receive:[20]
- $564 million for Medicaid
- $472 million in state aid for education
- $395 million for highways, bridges and transit
- $275 million for unemployment insurance
- $202 million for Title I schools and special education.
[edit] Budget transparency
Iowa currently has no statewide, official spending database online.
[edit] Economic Stimulus Transparency
- The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.[21]
- It is estimated that Iowa will receive at least $1.5 billion in federal funding.[22]
- The economic recovery website for Iowa is available here.
[edit] Legislation
- See also: Iowa Open Records Law
Iowa House File 801, which would have created a transparency database, died,[23] despite passing the House by 96-3. It will be raised again next year during the second session of Iowa's General Assembly.
[edit] Government tools
The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:
| State Database | Searchability | Grants | Contracts | Line Item Expenditures | Dept/Agency Budgets | Public Employee Salary | Exemption Level |
|---|---|---|---|---|---|---|---|
| None | n/a | n/a | n/a | n/a | n/a | n/a | n/a |
[edit] Limitations and Suggestions
[edit] Support for creation of the database
Although State Representative Jamie Van Fossen supported transparency legislation this spring, House File 2439 failed to pass, according to the Public Interest Institute's October edition of the "Iowa Transparency Newsletter."
[edit] Independent transparency sites
Although there is currently no state spending database in Iowa, there are several links (provided below) related to Iowa's level of transparency:
[edit] Public employee salary information
Iowa's Des Moines Register maintains a public employee salary database.
Additionally, the Department of Administrative Services posts some salary data here.
[edit] See Also
[edit] External links
- Model transparency legislation from the American Legislative Exchange Council is available at this link.
- Public Interest Institute
- Iowa Department of Management
- Public Employee Salary Database
[edit] Additional Links
[edit] References
- ↑ Center on Budget and Policy Priorities,"State budget troubles worsen," February 10,2009
- ↑ 2.0 2.1 2.2 The State of Iowa,"Governor Culver releases FY2010 budget," January 28,2009
- ↑ Associated Press,"Iowa leaders cut $133 million from budget," February 26,2009
- ↑ 4.0 4.1 The Harlan Tribune,"State cuts means waiting lists for consumers," February 23,2009
- ↑ The Daily Reporter,"Area superintendents respond to lawmaker's proposed school mergers," February 11,2009
- ↑ 6.0 6.1 The Hawk Eye,"Court budget woes continue," February 19,2009
- ↑ State of Iowa,"Iowa state budget process," January 1,2006
- ↑ 8.00 8.01 8.02 8.03 8.04 8.05 8.06 8.07 8.08 8.09 8.10 8.11 8.12 8.13 8.14 8.15 8.16 8.17 8.18 8.19 US Government Spending,"Iowa State and Local spending," retrieved February 27,2009
- ↑ 9.0 9.1 9.2 Des Moines Register,"Democrats advocate even deeper budget cuts," February 27,2009
- ↑ Iowa Department of Management,"Revenue Estimating Conference," retrieved March 1,2009
- ↑ Des Moines Register,"Fees past due? State, counties hunt for ways to collect debt," February 22,2009
- ↑ 12.0 12.1 Associated Press,"Iowa looks to collect overdue fees, taxes," February 23,2009
- ↑ Chicago Tribune,"Culver:salaries too high at Rebuild Iowa Office," February 16,2009
- ↑ 'Associated Press',"Culver signs bill raising Iowa school funding million for educational efforts in the state," February 27,2009
- ↑ Des Moines Register,"Culver says he'll press for revival of wage bill," February 25,3009
- ↑ Globe Gazette,"Iowa Dems say budget plan may change," February 26,2009
- ↑ Republican Party of Iowa,"Senate Republicans outline bold balanced budget proposal," January 27,2009
- ↑ Associated Press,"Iowa House Dem leader interested in network sale," February 27,2009
- ↑ WHOtv,"Iowa gets nearly $2 billion in stimulus money," February 18,2009
- ↑ Quad-City Times,"Iowa set to receive nearly $5 billion from stimulus," February 15,2009
- ↑ National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
- ↑ Wall Street Journal, "Stimulus Spending by State"
- ↑ Iowa House Republicans, "States Opening Checkbook to the Public, Iowa Isn’t One of Them," May 20, 2009
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