Republicans and Democrats on the House Appropriations Committee have agreed to use over $260 million in the state surplus to pay off some of the state’s debts.
For example, the state has $40 million in outstanding bond debt for construction of the Honey Creek State Park and this proposal essentially would pay that loan off early, saving the state about $2 million.
About $31.5 million in state surplus funds would be used for construction projects at the state universities. And Republican Representative Chuck Soderberg of Le Mars says another $110 million would be used to shore up state pension funds.
“There’s other one-time expenditures which we’ve identified in the bill which, there again, are legitimate, one-time expenditures,” Soderberg says. “It does not go for on-going programs.”
About half a billion dollars would be left in the state surplus, money Soderberg and other Republicans want to return to taxpayers.
“The Iowa taxpayers rightly deserve that money back in their pockets, whether that’s through tax reform or tax reductions,” Soderberg says.
Most Democrats on the committee voted for this plan, including Representative Tyler Olson of Cedar Rapids — the chairman of the Iowa Democratic Party. But Olson says if you add up all the tax and spending proposals House Republicans have put forward so far this year, the state would be more than $200 million in the red.
“I have not personally voted for a lot of massive tax cuts that have mostly gone to, you know, the upper one percent of Iowans,” Olson says. “I do believe that we have the ability, because of our financial strength, to buy down bonds, to make some investments…and those are good parts of this particular bill.”
The bill would dedicate nearly $114 million of the state surplus to paying off state debts — bonds that were issued to finance construction of a state prison, for example, as well as the bonds for former Governor Chet Culver’s “I-JOBS” infrastructure program.