Republicans in the legislature appear to be aiming for an overall spending plan that’s below the revised budget Governor Terry Branstad has just suggested for the next 15 months. Democrats accuse the Republican governor of playing a “shell game” with the budget.
This morning during an interview in his formal office, Branstad said “difficult decisions” have to be made, given lower-than-expected state tax revenue.
“The good news is because of the spending reforms we put in place back in the ’90s and the cash reserve that we have, I think we’re able to weather this situation a lot better than other states,” Branstad told reporters. “I mean 31 states are going through this and we know every one of the states that borders us to the west has huge budget problems. Illinois is a basket case, so you’ve got to look at it in perspective, but it’s still not easy.”
Senator Charles Schneider, a Republican from West Des Moines, leads the senate committee that writes state budget plans. He said with uncertainty about state tax collections, it’s “smart” for legislators to consider cutting more deeply than Branstad recommends — to ensure lawmakers aren’t forced to make another round of budget cuts in early 2018.
“There’s very little margin for error because we’ve spent the surplus down and we’re taking money from the cash reserve fund already,” Schneider told Radio Iowa. “A lot of us are trying to identify ways where we might be able to make some reductions beyond what the governor recommended, just to make sure we don’t have to deappropriate next year.”
Democrats say the decision to borrow $131 million from the state’s cash reserve to ensure the current year’s budget stays in the black is forcing Iowans to pay for Branstad’s “corporate tax giveaways.” Democrats also say the budget dilemma is proof the state’s economy is floundering under Branstad’s leadership. Branstad told reporters he’s optimistic a bounce back is not far ahead.
“Land values for the first time in three years have ticked up a little,” Branstad said. “I just met with the John Deere plant managers from all over the state of Iowa. They’re hiring people. They say they’ve seen the bottom. They think things are coming back. That’s an encouraging sign as well.”
Senator Schneider expects Republican legislators to release a spending outline in early April for the 12-month-long state budget that begins July 1. It’s a “tricky” process, according to Schneider.
“From another standpoint, as long as you focus on priorities, then that can make the decisions easier,” Schneider said.
And Schneider said making the difficult decisions now is better than promising money NOW to state agencies and public schools that may have to be withdrawn in early 2018 if state tax collections continue to sag.