The state auditor says legislators should consider using the more than $800 million state budget surplus to pay off state debts.
State Auditor Dave Vaudt says the Iowa Public Employees Retirement System has a long-term shortfall of nearly $6 billion — and that $800 million also could be used to shore up the pension fund.
“Putting monies aside today and allowing these to earn over a period of time can have a huge impact on what that fund looks like several years from now,” Vaudt says.
However, Republicans in the legislature have proposed giving the surplus back to Iowans in the form of a tax refund of roughly $375 for each individual taxpayer. House Speaker Kraig Paulsen, a Republican from Hiawatha, says Vaudt’s alternative proposals are under consideration, too.
“We didn’t need the money to run state government and yet we collected it,” Paulsen says. “It’s the taxpayers dollars and we need to find a way to return some portion, if not all, which is the initial proposal we put out, but there are also some legitimate one-time expenses that may make sense.”
Senate Democratic Leader Mike Gronstal of Council Bluffs says Democrats are “open” to the auditor’s proposals to use the surplus to pay off debts and ensure the long-term solvency of pension funds.