A leading democrat at the Iowa statehouse is warning of the next big court ruling that could knock a hole in the state budget. Barely a week after the state supreme court’s ruling on casino taxes, the senate minority leader says the next wave to topple the legislature could be a court ruling on a tax cuts. Democratic senator Mike Gronstal of Council Bluffs says if republicans win their lawsuit against the governor, it creates quite a shortfall. That’s another 310-million dollar problem in their budget, he says. Republicans sued the governor after he vetoed parts of the economic- development bill that also created the Iowa Values fund. G.O.P. leaders argued the governor didn’t have the authority to “X” out the tax cuts from that bill. If the court rules he DID have that power, it’ll likely mean the restoration of those tax cuts, which will take a big bite out of a budget that’s already stretched too thin. Gronstal says Republicans will have more than just a budget shortfall to worry about. Gronstal says the republicans will wind up with what they themselves would see as “bad law” and if the court rules the governor does have the right to line-item veto, it’s not the outcome they want — so he proposed they drop the lawsuit. But statehouse republicans have no intention of doing that. They also don’t plan to build the contested tax cut into their budget for next year. State representative Bill Dix is chair of the house budget committee. …Representative Dix says he doesn’t expect the court to rule until after the legislature has adjourned. If republicans win and the tax cut goes into affect, the legislature could call a special session and postpone the enactment date. But a G.O.P. staff member says if the economy continues to improve – an uptick in tax collections could cover the first year costs of the tax cut.
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