This session is down to the last two weeks, I think.  That is when it is scheduled to end anyway.  There are some big pieces of legislation in the hopper that still needs approval on one side or the other in the rotunda, before they are sent down to the Governor for his signature. 

The toughest job is to balance the budget with steady revenues while spending just keeps climbing.  It continues to amaze me how some people think that you can just continue to spend even if you don’t have the money.  You know that you can’t spend something that you don’t have.  But that doesn’t seem to slow down the spenders in government. 

Our state government has grown faster than our business sector in the last few years and that is one of our biggest problems. 

The governor has hired a consultant to look at different ways in order to run our state government more efficiently.  This all adds up to cuts in spending and when you start talking cuts it gets the attention of the ones being cut.  The following is just one of the states programs that are being recommended by the consultant.

All areas of education appear to have less money today than they had three years ago, except Iowa’s area education agencies (AEA’s).  Regents have $81 million less, community colleges lost $7 million, school districts took an across-the-board reduction, and the Department of Education has $1 million dollars, or 20 percent, less.  So why is the AEA overall budget increasing? There are two reasons.

First, the AEA's safeguarded their $7.5 million reduction in FY 02 through their budgeting measures that keep a 10% average carryover.  Very healthy!  Second, the AEA’s have benefited from a $12.6 million increase in federal special education funds.

When the 2003 legislative session started, it was no secret that for another year built-in costs in the overall state budget would exceed revenues.  This meant cuts.  The Reinvention proposals that project $125 million in savings will prevent the historic across-the-board reductions.  And the AEA’s are good candidates for reinvention. 

No one disputes the value of Iowa’s area education agencies.  But after 30 years it certainly won’t hurt to take a look at efficiencies that result in costs savings to the taxpayer. Consider, just consider, the change in the delivery of media services, increases in federal funds to the AEA’s to buy down the federal mandate for special education, positive increases in cooperative purchasing and AEA reorganization.

Is the goal to dismantle AEA’s?  Not at all.

Is the goal to ask them look at new cost saving efficiencies? Yes.

The three step Reinvention proposal looks at the $35 million FY03 carryover balance, asks AEA’s to provide $10 million cost savings in FY 04, and studies potential efficiencies.  The proposal no longer contains a fee for services starting in FY 05.   Cost savings are possible within the AEA system through such means as further improving cooperative purchasing, combining services with other entities and addressing the $20 million special education deficit which districts pay in property tax.

When the day is done, the Reinvention proposal asks AEA’s to realize a $400,000 reduction in next fiscal year’s major revenue sources.  With a $325 million budget, this isn’t asking a lot, especially when compared to what higher education and our local school districts have experienced in cuts.

The Iowa Values Fund Plan continues to be under consideration.  This is a plan that has some great potential for our area.  The plan provides $75 million in workforce training at our community colleges.

There is $300 million included that would be matching funds for communities that enact the local option sales tax for school infrastructure.  This pool of money is needed for counties such as Louisa County that does not have a retail base.  This fund would help bring Louisa County up to the State wide average of $575 per pupil if the county would pass the special option sales tax.  This is badly needed for rural Iowa to bring equity in the special option sales tax formula and to help provide property tax relief.

There several other pieces of legislation that we will be considering, but I have ran out of space.

Thanks for reading, if you need to reach me you can e-mail me at tom.sands@legis.state.ia.us or call me at 515-281-3221.

Until next week,

Tom Sands