The pace is picking up at the State House.  There is one more week before the end of the funnel.  The people with more experience than I inform me that next week will be hectic to say the least.  March 14^th is the last day bills can come out of committee, with the exception of bills in the Ways and Means committee and the Appropriations Committee, and still have life.  Any bills that have not come out of committee by that time will be done for the year.  The bills that are in the two committees of Ways and Means and Appropriations can continue to come out of committee.

On Tuesday, March 4, House and Senate Republicans released the FY 2004 joint budget targets.  The budget targets will help put the state of Iowa on sound financial footing for the future.

The targets represent an increase of general fund spending of just $6.5 million compared to an estimate FY 03.  This figure does not include the $41.1 million supplemental appropriation for Medicaid in FY 03 or the cost of the salary bill for FY 04.  However, when these two figures are added in, the increase over FY 03 will still be less than $10 million.  This is a decrease from the Governor’s recommendation of roughly $140 million in spending.

The State Auditor recently criticized the Governor’s budget recommendation for a lack of long-term planning.  Republicans answered this criticism by reducing the FY 05 deficit to under $100 million in the targets.  The is the first time since Terry Branstad was in office that the budget process will look at more than one fiscal year at a time.

The GOP budget targets are in line with the principles of sound budget practices because they: reduce the reliance on one-time sources of revenue for ongoing expenses; will not implement new programs for a partial fiscal year; avoid multi-year accelerating commitments; avoid automatic spending increases (with the exception of two percent allowable growth in FY 05); attempt to align expenditures with revenues; and use a conservative approach to determining revenue and expenses.

The targets continue the Republican principle of improving student achievement.  The budget fully funds two percent allowable growth for K-12 schools, funds an increase for the teacher compensation program and continues the $30 million class size reduction and reading improvement block grant program. 

Finally, the budget targets represent something that, politically speaking, the Governor can sign.  Most of the reductions come from the reinvention savings plan, an idea originally proposed by the Governor.  We agree with him that a better way to implement budget cuts is through reinventing state government.

The bottom line is that we have budget targets aimed to put the state on a sound financial footing for the future while maintaining a commitment to improving student achievement and creating wealth for all Iowans.  It is fair to assume that there will be groups complain that the cuts are too deep or that the Legislature isn’t spending enough.  If more were spent, the deficit in FY 05 would require massive cuts or a tax increase and that is not an option.  It is a much more sensible fiscal policy to slow the growth of spending this year to prevent those things from happening next year.

We continue to look at ways to completely overhaul our tax structure.  There is little doubt that Iowa’s tax structure is broken and it needs to be fixed.  The climate could not be better to do just that than this year.  There is lots of work going on to put some of the different ideas on paper that has some numbers to back up the ideas.  This all takes a great deal time, but the rewards will far exceed any work that it takes to get it passed.

I will be in Wapello with Senator Tom Courtney, on Saturday, March 08, 2002  at 1:00 in the afternoon in the Louisa County Supervisors Office, for a Town hall meeting.

Until next week,

Tom Sands