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Your Capitol Voice: Slow farm recovery big reason for $120 million mistake
by Bobby Kaufmann, State Representative · Op-Ed · February 02, 2017
This week marks the beginning of our fourth week of session. The time for acclimation and getting re-accustomed to Des Moines is over. Many bills and budgets of great importance are making their way through the committee process.
This week we debate the de-appropriations bill and that is the focus of this newsletter. Many of you have asked why there needs to be a de-appropriation, who caused it, what is in the bill, and why are we handling it this way.
When we work on budgets for the next fiscal year we are dependent on a 3-member board called the REC (Revenue Estimating Committee). This panel is supposed to take an objective look at tax receipt trends in the state and make predictions based on formulas as to how much the legislature can spend. This board is made up of a member of the Governor’s office, a member of the nonpartisan LSA (Legislative Services Agency) and a member of the public (typically a CPA). The estimates given to us last year for FY17 proved to be off by a substantial margin ($120 million). The biggest reason for the drop has been a slower than usual recovery in the farm economy. The price of corn, soybeans, and most livestock is below the cost of production. Iowa is not Washington DC. We are legally required to have a balanced budget so the first bill this year will be a de-appropriation of $120 million dollars.
Many of you have asked why we cannot simply take the money out of the Emergency Fund. The answer is that those dollars are mandated to be in reserves for true emergencies like the flood of 2008. Cutting $120 million out of a $7.5 billion dollar budget is painful but not an emergency. Chris Hall, the ranking Democrat on the Appropriations committee, also agrees with that assessment and has stated it publicly. The other issue with using the reserves is that the legislature is legally required to replenish any funds used in the Reserves. If we took the $120 million out of that fund, we would be legally required to cut $120 million from the current budget in a mere few weeks.
When the Governor came out with his proposal to cut $120 million, I disagreed with him on a number of issues and agreed on some. I was very pleased he did not recommend any cuts to K-12 education and he kept our promise to fully fund the backfill to the cities. Medicaid was also held harmless. During this time of transitioning Medicaid services and spending, it was not feasible to make a cut to that program. Those were three priorities for me. I disagreed with the steep cuts to the community colleges, public safety, our Regent universities, and the judicial branch. While those programs will all experience cuts, we were successful in making the impact on them significantly lower. The negotiated bill also makes deep cuts to many administrative agencies as well as our own Legislative budget. The Legislature is taking the first hit, as we have lowered our staff, operating costs, and cut our pay by nearly 10%. We cut a total of 24 million.
The de-appropriations bill has been a cloud over the legislature that will finally be lifted. Next on the agenda is getting K-12 spending completed within the first 30 days. This 30-day window is something I have fought to meet since I have been in the legislature. Once those two items are out of the way, we can begin to have robust debates on a significant number of policy and tax issues and make some big changes for the positive in this state.
Capitol visitors: Mark Hansen, Muscatine; Mike Carberry, Iowa City.
Listening Post schedule: February 4
9AM-Muscatine Community College Student Center
Contact Rep. Kaufmann
Email: Bobby.Kaufmann@legis.iowa.gov
Phone: 515-281-3221
Write: 1527 330th St. Wilton IA 52778
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