Next Wednesday is not only a day to flip the calendar and start a new month – it is also the day when the new laws passed during this year’s legislative session go into effect. Though many of the new changes to Iowa’s code will not generate a lot of attention, one outcome of the 2009 legislation session – the state’s new budget – will likely dominate discussions in Iowa for the next year.
Ever since the Legislature passed and Governor Culver signed the new $6.3 billion dollar budget, the largest budget in the 163 year history of the state, independent and non-partisan analysts with the state’s Legislative Services Agency (LSA) suggest Iowa will likely face a budget deficit well over $900 million dollars by the time the next legislative session commences in January. Yet, many other experts already believe the budget deficit will grow larger and Iowa’s fiscal hole will get bigger because the economy continues at a sluggish pace. Iowa did not even have a one billion dollar budget until 1976 yet many predict that Iowa’s budget deficit will top one billion dollars.
Prior to this year’s session, Governor Culver and his legislative allies ballooned the size of government by nearly a billion dollars – a 21 percent increase in spending. This past session, they continued to grow government and then used the state’s credit card to add $1.7 billion dollars of debt to create temporary government make-work positions. Newborns today will have graduated from high school and college, started their career and probably their own family by the time this new debt is paid off and that is just the consequence of one legislative session. I know that most family’s and employer’s budgets have not grown by that much in such a short period and it is fiscally irresponsible and unsustainable to believe that government should grow that fast too. Iowans expect their government to live within its means just as any family must do.
Iowans are becoming increasingly alarmed about the state’s fiscal future, record spending and record deficits but they are also concerned with the deficit of fiscal leadership from the governor and his counterparts in the Legislature. Governor Culver recently told reporters that he was not aware of how many dollars were left in the state’s ending balance, even as this year’s state budget teeters on the edge of being unbalanced, a result that could force the Legislature to come back to Des Moines for a special session this summer.
Even more recently, the governor said, “We have a $441 million coffee can – it’s the largest cash reserve ever in the history of our state.” Yet, earlier this year, the state’s ‘coffee can’ had $640 million dollars. As the budget continued to grow, $200 million from the state’s savings account got raided and then spent. Those remaining reserves, plus the $204.3 million left from the federal spending bill passed earlier this year, will not last long considering the severity of upcoming budget deficit crisis unless Governor Culver and legislative Democrats opt to significantly raise taxes on Iowa families and employers, make deep cuts or ask Washington D.C. for another bailout.
Last week, Iowa Workforce Development announced that Iowa’s unemployment rate had climbed to a level not seen in the last 22 years. There are over 96,000 unemployed Iowans and the number continues to grow as more reports surface of layoffs and cutbacks. This is consistent with the story published only a few months ago by U.S. News and World Report showing that Iowa is second to last of all the states in the country when it comes to friendliness to businesses. Only West Virginia has an employment climate that makes Iowa’s high taxes, onerous rules and regulations and proclivity to discuss anti-jobs legislation that will stifle job creation and economic growth seem more appealing. Iowa cannot afford to be near the bottom in the nation because we are not just competing with other states – we are competing with other countries too.
A recent article in the Wall Street Journal titled “Maine Miracle” shows that a turnaround can happen if the leaders of a state understand that providing tax relief through cutting taxes and encouraging investment is the best way to grow the economy and put more people in to sustainable private sector jobs. Unlike Iowa, Maine leaders understood that growing the size and scope of government, taxing to spend and borrowing to spend is not the ticket to economic prosperity or more sustainable private sector jobs. Maine, according to the Small Business Survival Committee, had the third worst job climate in the country. “No state has improved its economic attractiveness more than Maine has this year,” proclaimed the author of the story. Maine Governor John Baldacci, who happens to be a Democrat said, “Without employers, you don’t have employees.” Then he added, “The best social services program is a job.”
In contrast with Governor Culver and his party members in the Legislature, Senate Republicans have offered hundreds of millions of dollars in real cost savings solutions and have proposed a bold set of pro-growth initiatives that will grow Iowa’s economy – not grow Iowa’s government. Our plan would provide an immediate jolt of adrenaline to Iowa’s economy as a result of aggressive, limited, one-time tax credits. In our plan, we have also addressed the need to plan for the economic future because the economy is constantly evolving and our state needs to be prepared to adapt for the new jobs that will be coming in the years and decades ahead. Our ambitious proposal is aimed at re-establishing the principle of free market capitalism as the engine of economic growth in Iowa. Unfortunately, because we are not yet in control of the Legislature, the current majority party refused to even allow our initiatives to be discussed – let alone be voted on.
Our state is uniquely situated to weather this current economic storm because Iowans are blessed with common sense and we still cherish freedom, understand personal responsibility and value hard work and honesty. I know that while these are challenging times, challenges always provide opportunities. As Iowans, we should take this opportunity to grow our state and provide a future for our children and grandchildren that all of us can be proud of. This is not the time to be spending record levels of taxpayer dollars, adding record levels of debt or enacting new tax increases and job killing bills. This is the time to make government smaller, leaner and more efficient. When we pursue the right priorities, like growing Iowa’s economy instead of Iowa’s government, we can be assured that our best days will be yet to come.
Senate Republicans are working hard to earn the taxpayers’ trust because we know that Iowans deserve a surplus of competent and experienced economic leadership and we will continue to work hard to make a difference for your family, your business, your school and your community.
As always, I welcome hearing from you and can be reached by phone at 515-281-3560 or by e-mail at email@example.com
Written by Senate Republican Leader Paul McKinley
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