This week marked the one year anniversary of the passage of Governor Culver’s $1.7 billion dollar temporary work program known as I-JOBS. Governor Culver marked this occasion by signing an $150 million dollar expensive expansion of the program.
Now that the program has been in place for a year and has now been dramatically expanded, what is the progress report?
Governor Culver promised 30,000 new jobs as a result of I-JOBS. He said it would be the revitalization and revival of our economy. A year later, instead of 30,000 new jobs for Iowans, more than 30,000 Iowans have actually lost their jobs.
Iowa’s unemployment remains unacceptably high at 6.8 percent. In many counties throughout Iowa, the unemployment far exceeds not only the Iowa average but also the national average of 9.7 percent.
In the past year, Iowa lost 222 factories and we remain 49th in the nation in friendliness to job creators according to US News & World Report and 41st according to the very reputable Small Business Survival Index. Two-thirds of Iowa’s counties lost population in 2009 because of a lack of jobs.
At the time of I-JOBS passage, 71 percent of Iowans voiced their opposition to it according to a poll conducted for The Des Moines Register. Today’s high school seniors will be nearly 50 years old before the decades of debt will be paid off.
We can and must do better.
Not a single Republican in the Senate or House voted for I-JOBS or its expansion because we know Iowans do not want decades of debt – they want good sustainable private sector jobs.
Like the issues of property tax relief and responsible budgeting, the issue of jobs is one that draws a bright line of distinction between the two parties.
As was the case with President Obama and congressional Democrats, Governor Culver and his legislative Democrats have pursued a strategy of creating large pots of money and asking government bureaucrats to pick winners and losers by micromanaging from Washington or Des Moines.
Instead, we must be a state that focuses like a laser on jobs and economic growth. We know that small businesses create two out of every three new jobs and that is why we must make it easier for small businesses, entrepreneurs and employers to invest once again in our workforce. We must offer the current and future job creators of Iowa two important qualities: stability and commitment.
Job creators need stable fiscal policies so they know what to expect if they come to Iowa or expand here. The wayward budgeting of the last three years has produced higher job-killing property taxes and other tax and fee increases. We must ensure stable fiscal policies that do not rock the boat.
With stability comes commitment. We must commit to keeping our state a Right-to-Work state and avoid many of the anti-jobs bills that have been discussed during the last few years. Whether it be the repeal of federal deductibility or pursuing the dangerous anti-jobs bills backed by well financed labor bosses, even discussing these bills has sent the wrong message. We should not punish the very people who we need to help grow our state.
Iowa needs stability and commitment.
A year later, Governor Culver’s I-JOBS has not worked as promised. When we should be removing barriers to job creation and making it easier for entrepreneurs and employers to thrive, legislative Democrats have done the opposite by raising property taxes and increasing fees and fines and discussing and enacting harmful anti-jobs legislation.
We can experience a 99 county resurgence. Iowa is filled with promise but we must begin to change direction and reignite the entrepreneurial spirit of the private sector. It’s time to stop picking winners and losers and instead empower all who wish to be prosperous. Let us again put our faith in the people to move Iowa forward instead of allowing government to hold us back.
State Auditor Dave Vaudt, Iowa’s taxpayer watchdog and foremost expert on the state budget, issued his much anticipated report on the new budget late last week. The results of his assessment should concern every Iowan.
Senate Republicans believe that when the taxpayer’s watchdog barks, it’s wise to pay close attention. Unfortunately, for the past several years, Governor Culver and legislative Democrats have not.
The last four years have produced the four largest budgets, the most debt and the largest deficits in state history – all while taxes and unemployment are heading higher. Now, the taxpayers of Iowa are now suffering the consequences of their overspending and fiscal mismanagement.
There is a reason why not a single Senate or House Republican voted for any of Governor Culver and legislative Democrats’ budgets the last two years: we simply cannot afford it and it spends too much money.
For example, while we were disappointed that the government reorganization effort did not go far enough and that many of our ideas were not incorporated, Auditor Vaudt showed the effort trimmed $108 million for the state’s general fund – an amount that is approximately two percent of the state’s budget. However, they turned around and increased spending by $248 million. Subtract $108 million from $248 million and you are left with $140 million dollars in added spending.
Vaudt put it in perspective by noting, “It’s like a family with a $250 weekly grocery bill finding $4 per week in savings on cereal so they decide to celebrate by having a $9 steak each week - increasing the grocery bill by a net of $5 per week. Would any Iowa family consider this to be ‘savings,’ or is it just Iowa government which does?”
Auditor Vaudt also echoed the concerns of Senate Republicans about the use of one-time dollars for ongoing expenses. Over $736 million one-time dollars were authorized in the new budget to pay for on-going expenses. Unless new sources of revenues are generated next year or spending is reduced significantly, next year’s session will be extremely difficult.
According to Vaudt, “This spending gap is often referred to as a “cliff” by experts because of the severity and suddenness of the drop in resources which are expected to be available.”
Senate Republicans would prefer to reduce spending and better prioritize Iowa’s budget. Not a single Iowan should find it acceptable that our state is headed off a financial cliff unless bold action is taken to reverse our current course.
Iowans should also be concerned about the depleted level of Iowa’s “rainy day fund” or savings account. Governor Culver and legislative Democrats have left it with less than $200 million in the fund, a dangerously low level that is approximately 50 percent of where it was in July of 2008.
Iowans are thrifty, careful and conscientious with their own money and expect government to treat their tax dollars the same way. That has not been the case.
Vaudt also voiced concern over the statewide increase in property taxes happening in most school districts across Iowa. By underfunding the per-student school aid formula by $162 million dollars, local districts have had to cut district budgets and raise property taxes. Governor Culver’s property tax increase is conservatively estimated to be around $182 million dollars – but that number is likely to be much higher.
Higher property taxes will only stifle private sector job creation at a time when our unemployment remains unacceptably high. We should not be raising barriers to job creation – we should be lowering them.
In concluding, Vaudt offered the following overall evaluation, “Thanks to this budget, next year’s Legislature again faces a spending gap of nearly $1 billion. That means revenues would have to grow over 13 percent just to match this year’s true total spending for General Fund services. We face a huge gap in the next fiscal year. Iowa is, however, essentially out of ‘easy’ options for dealing with the spending gap.”
In what Senate Republicans had hoped would be a session focused on budgeting and spending reform, property tax relief and private sector job creation, the 2010 session became one of missed opportunities. They continued to kick the can down the road, raised property taxes and essentially ignored the issue of jobs altogether.
But to be clear: there is still reason for optimism and we still have hope to turn things around.It will require us to make a 180 degree turn from the current direction we are headed. Since elections do have consequences, real changes will need to be made this fall.
Governor Culver and legislative Democrats ignored the bark of the taxpayer’s watchdog and as a result, a bigger bite will be taken out of your pocketbook. Senate Republicans believe you, the taxpayer, deserve much better.
Senate Republicans are committed to the cause of turning this state around by focusing on responsible and sustainable spending, lower property taxes and private sector job creation. The combination of those three key areas will lead to the economic resurgence that Iowa badly needs.
Of all the weeks on the calendar, this may be the week Iowa taxpayers look forward to the least.
On one hand, this week marks the deadline for filing federal tax returns. Many Iowans will likely write bigger checks to both the federal and state government this year.
On the other hand, this is also the week where every school district in the state must certify their budget for the upcoming school year. Normally, this might not seem like a particularly noteworthy annual occurrence to everyday Iowans. But due to the recent actions by Governor Culver and legislative Democrats, property tax increases are on the way.
Last fall, when Governor Culver made his 10 percent across-the-board reduction after three years of unsustainable spending and irresponsible budgeting, hundreds of millions of dollars were slashed from Iowa’s schools. This left a gaping divide between the money schools had to spend and the budget they had been following.
This forced school districts to further trim their expenses, raid their cash reserves (if they had any to begin with) and increase property taxes.
Fast forward a few months and the same problems still persist.
Even though Governor Culver and legislative Democrats spent the second highest amount of money in Iowa history this legislative session, they underfunded the K-12 per-pupil education formula by $162 million dollars.
Though most school districts have made drastic cuts to adjust to the decrease in funding from the state, many school districts have had to dip into their cash reserves and in most cases, substantially increase property taxes. Conservative estimates show that Governor Culver’s property tax increase this year will be in the neighborhood of $182 million dollars when all of the other non-school funding related increases are also added in. It could possibly end up larger.
It’s hard to miss the headlines popping up all over the state this week reminding Iowans of the higher property taxes headed their way.
Iowa already has some of the highest property taxes in the nation. At a time when we should be encouraging entrepreneurs, employers and small businesses to invest and expand in Iowa to help grow our economy and create jobs, this property tax increase will sting badly. The simple truth is that property tax increases badly hurt job growth and business development.
Unfortunately, it was all avoidable.
Every year, our schools receive over four billion dollars. Of that, half a billion dollars comes with a whole series of strings and unfunded mandates attached. In order to assist our schools and shield the taxpayers from the governor’s property tax increases, Senate Republicans offered a bold plan this past session to suspend these mandates and remove these strings to allow greater flexibility and local control.
Normally, these dollars cannot be used for a school’s general fund. However, our common sense plan would allow schools the flexibility to use that money to pay for any expense.
Instead of having to abide by mandates created by lawmakers and bureaucrats in Des Moines, Senate Republicans believed it would be better to give local school boards and administrators the flexibility and local control to spend that money as they see fit.
Regrettably, it was defeated with all Senate Democrats voting to raise property taxes and all Senate Republicans voting to give our schools more local flexibility and more protection for the taxpayer.
Governor Culver and legislative Democrats instead chose to mandate school districts drain their cash reserves. When our school districts replenish their cash reserves in the future, that money will again come directly out of the pockets of Iowa’s property taxpayers.
Is there any wonder why tea parties are popping up all over the state, demanding an end to the policies of the last four years here in Iowa? Iowans know we cannot afford to have the same out-of-control agenda continue to be repeated year after year.
In the coming weeks and months, Senate Republicans will continue to advocate for property tax relief, private sector job creation and responsible and sustainable budgets. We believe that is the recipe for a smarter, healthier and more abundant future for Iowans.
The second most spending in state history.That’s the unfortunate legacy of the 2010 session.
Iowans will remember this legislative session as one of missed opportunities. Senate Republicans believed this session should have been focused on the important priority areas of private sector job creation, property tax relief and budget and spending reform.
Instead, legislative Democrats, with the blessing of Governor Culver, used the session as an opportunity to again continue the irresponsible spending that has plagued Iowa for the past three years.
Legislative Democrats authorized $5.3 billion dollars in spending using ongoing funds. That is the number they use to discuss the size of the budget. But that is only giving Iowans part of the picture.
Beyond the $5.3 billion, there is also $732 million in one-time dollars that will be used for ongoing expenses. These one-time dollars are found from raiding and therefore leaving many of Iowa’s important savings accounts at dangerously low levels. In addition, they also exhausted any existing federal dollars that were sent to Iowa as part of President Obama’s bailout in early 2009.
Added together, it surpasses over $6 billion dollars in spending which includes tens of millions of dollars in wasteful pork projects.
Once again, we have a budget that does not reflect the true priorities of the taxpayers who pay for it all and again spends far too much. The consequences will impact the lives of every Iowan.
Yet, all of that does not include the added property tax increases that will be piled on top of local property taxpayers in literally every corner of the state. Conservative estimates suggest the total of Governor Culver’s property tax increase is around $186 million dollars. It’s likely the final number could be much higher.
So where does all of this spending leave Iowa down the road? With a serious problem!
Given the use of one-time dollars for on-going expenses and the built in spending increases that have been put on auto-pilot, the non-partisan Legislative Services Agency has indicated that next year’s budget deficit will be just over $1 billion dollars. Keep in mind, Iowa did not even have a $1 billion dollar budget until 1976.
Not a single Republican in either the Senate or House of Representatives voted for any of the Governor Culver and legislative Democrats’ budget the last two years because we have listened to the citizens of Iowa. Iowans have made it abundantly clear that the record spending, eye-popping deficits and generational debt is unacceptable and irresponsible. We simply have more government than our economy can support.
Thankfully, our state’s Constitution requires a balanced budget but that means Iowa’s new governor and Legislature will have their hands full next year. We need to bring about dramatic and substantial spending and budgetary reforms.
First, Senate Republicans propose and support an amendment to the Iowa Constitution to limit state spending to no more than 99 percent of state revenue. Secondly, Senate Republicans propose requiring a two-thirds supermajority vote of both houses of the Legislature to authorize new state debt. Next, we propose a systematic process wherein every program funded by state government will be sunset (de-authorized) by a date certain unless the governor and Legislature take action to reinstate it.
Beyond real budget reform and putting an end to Governor Culver’s property tax increases, we must get serious about private sector job creation. The best and only real long-term solution is to streamline government and substantially grow our economy and increase job creation.
Responsible budgeting, lower property taxes and more private sector jobs for Iowans. That is the Senate Republican vision for a more prosperous Iowa future.
Senate Republican Leader Paul McKinley, House Republican Leader Kraig Paulsen and House Republican Whip Linda Upmeyer met with the editorial board of The Des Moines Register to discuss the 2010 legislative session, the session of missed opportunities.