Budget Outlook Updated
The Revenue Estimating Conference met this week to make their latest revenue projections for both the current and following fiscal years. The REC has continued to cite low commodity prices and a sluggish agricultural economy as a driving factor for the lower than anticipate revenue figures. Inaccurate revenue projections are not limited to Iowa. At least 30 states, whose economies largely rely on agriculture and energy, have had to make budget reductions in the middle of their fiscal year.
The REC lowered the FY17 revenue projection by $131 million. This is in addition to the $117 million in reductions that were done at the beginning of session. With only a few months left in the fiscal year, additional budget reduction opportunities remain limited. Gov. Branstad has proposed using the Cash Reserve account to make up the budget shortfall. If this happens, the House Majority will not adjourn session without a plan to refill the cash reserve account.
The REC lowered the FY 18 revenue projection by $191 million. This leaves about $6 million available in new revenue for the fiscal year. An additional $40 million has already been approved for schools.
The House plan to effectively manage the state budget is threefold:
- Taxpayers and the Legislature need more accurate revenue estimates from the Revenue Estimating Conference.
- A hard look needs to be taken at the “what” and “where” taxpayer money is used to make sure Iowans are getting the best value and their priorities are being met.
- Every tax credit is on the table to ensure Iowa’s taxpayers are getting a good deal.
Democrats are criticizing the budget management of Republicans but conveniently leave out the fact that they supported plans that increase state spending by more than $1 BILLION over the last two years. Without the Republican majority’s strong stand, key areas like local school budgets would be facing deep cuts. Iowans can count on us to stand strong against reckless government spending ideas.
Common Sense Solutions move forward in the House this week
School Funding Flexibility:
House Files 564 and 565 provide schools with more flexibility, allowing locally elected officials to utilize unused funds that are typically reserved for specific purposes. These bills recognize that no two school districts are exactly alike and will allow each school district to better meet the specific needs of our students and teachers.
Protecting Young Iowans from Synthetic Drugs:
House File 296 will protect Iowa’s kids by keeping deadly synthetic drugs off the streets, while also making it easier to prosecute sellers of those drugs.
Supporting Families with Autistic Children:
House File 215 addresses the unique challenges parents of children with autism face by extending insurance coverage for autism treatments to Iowa families. Coverage for autism can be very expensive but is very beneficial for future growth. This legislation ensures access to programs with proven, positive outcomes in the child’s development.
Privacy Protections for the 21st Century: House Joint Resolution 1 extends Fourth Amendment privacy protections to Iowans’ electronic communications and data, ensuring Constitutional rights keep up with today’s technology.
Reining in an Out of Control Federal Government:
House Joint Resolution 12 calls for a Convention of the States to address the Federal Government’s power and jurisdiction.
Reforming Iowa’s tax credit programs
All session long, the House Minority has blamed tax credits and exemptions for inaccurate revenue projections.
Many of these tax credits passed in a bipartisan way over the years. Reforming Iowa’s tax credit programs should be a bipartisan endeavor but it appears that simply want to talk about it rather than act unfortunately.
This week the Appropriations Committee introduced House Study Bill 187 to reform the state’s various tax credit programs and track their fiscal impact. The bill sets a cap on the total amount of tax credits that can be redeemed each year and eliminates refundability of tax credits where businesses or individuals can receive a refund even if they have no tax liability.
There should be no sacred cows as we reevaluate these tax credits to make sure taxpayers are getting a good deal. Every tax credit needs to be on the table.