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ITR: Budget progress remains slow

Income TaxBy Iowans for Tax Relief

 

The budget impasse continues at the Capitol.  The overall state budget targets between the House Republicans and Senate Democrats are more than $170 million apart.  Last week House Republicans proposed a state budget for fiscal year 2016 that would spend $7.168 billion, while Senate Democrats made a budget proposal of $7.341 billion that matches Governor Branstand’s budget target.  The largest differences in those budgets stem from the proposed increase in state aid for K-12 education: House Republicans have offered an increase of 1.25% while Senate Democrats have offered an increase of 2.625%.

The House Republican budget target is an increase of approximately 2.5% over fiscal year 2015’s budget, while the target of Senate Democrats and Governor Branstad would be an increase of approximately 5.0%.  Iowans for Tax Relief believes both of these amounts allow too much growth of state government spending.  Compare those 2.5% and 5.0% increases with the much lower rates of inflation — last year inflation (CPI-U) increased by only 0.8% — and Iowa personal income growth which increased by only 1.3% last year.  Why should the state’s budget grow faster than the budgets of Iowa taxpayers?

Iowans for Tax Relief strongly urges the Legislature to adopt a final budget that spends less than the state takes in and leaves all reserve funds full for rainy days ahead.  Legislators must not tap into any reserve funds to pay for ongoing expenses.  If Legislators believe that spending must be increased on a critical item within the budget, they should find a less essential part of the budget to make an offsetting cut, just as Iowans do in their own household budgets.

 

More IDOT oddity

Iowans for Tax Relief has exposed the bait-and-switch tactics of the gas tax increase promoters who talked about urgent needs to repair dangerous bridges and roads but, when they got the money, they began spending it for nonessentials like land purchase, hiring employees, etc.

For example, we pointed out that the priorities list of the Iowa Department of Transportation (DOT) includes ONLY two bridges, and both of them are not rated by the DOT as Structurally Deficient. The two bridges are only getting surface repairs.  Now we have confirmed that the DOT has 105 bridges rated as Structurally Deficient, but none of them are receiving any of this first round of spending.

Resurfacing two safe bridges is a higher priority than repairing Structurally Deficient bridges.  Wise management of your gas tax dollars?  Another reason why so many Iowans are angry about a gas tax increase that was falsely sold to Iowans and Legislators?

 

Legislators reach session deadline

The 110th day of this Legislative session will be Friday, May 1.  The 110th day of session is significant because it is Legislators’ self-imposed deadline for the end of session.  Legislators often fail to meet this deadline and go days and even weeks into overtime session.  At this point it looks very unlikely that the Legislature will be able to adjourn on time on Friday this week.

While Legislators often go into overtime session, they do suffer consequences for their delay.  Starting on May 4 Legislators will no longer be paid their daily expense payments and assistant staff will likely be reduced.

When the Legislature will adjourn is still a big unknown.  There are still several issues on which Senate Leadership, House Leadership, and the Governor need to reach agreement.  This includes compromising on the budget increase for K-12 education funding and the overall budget figure.  If leadership in both chambers comes to an agreement on both figures this week, this session could wrap up quickly, but these stalemates can last for weeks and there is nothing to indicate leadership is close to a deal.