Legislators considering mid-year cuts to the state budget have a new figure to consider. The panel of financial experts who set the official estimate of state tax collections is predicting 33 million more dollars will flow into the state treasury in the current budgeting year.
“We’re feeling more comfortable with what the impact the federal tax cuts are having, at least in Iowa,” said Dave Roederer, the governor’s budget director who is also a member of the panel that made today’s revised state tax estimate.
Roederer is reluctant to say how policymaker should react to today’s news.
“There still needs to be some reductions in funding,” Roederer told reporters after the meeting. “It’s what the comfortable level will be for the governor and the legislature.”
Roederer suggested the debate will now shift to how much of a “cushion” in the state budget legislators and the governor decide may be necessary. While $33 million is expected to flow into the state treasury, if no cuts are made, the current state budgeting plan would see nearly all of that spent by June 30. That’s the final day of the current fiscal year.
Republican lawmakers have indicated making sure there’s several million dollars extra in the budget plan is a priority. That money could cover any shortfall if state tax collections fall short of expectations. That’s what happened last summer, forcing the governor to dip into the state surplus to cover a deficit.
Legislators from both parties issued written statements, which you may read below.
(DES MOINES) – Rep. Pat Grassley (R-New Hartford), Chairman of the House Appropriations Committee, issued the following statement regarding today’s Revenue Estimating Conference meeting:
“After today’s REC meeting, we have a much clearer picture of what adjustments are truly necessary for the FY18 budget.
We are continuing to see growth in Iowa’s economy, but we need to be cautious with every budget decision we make. With this updated information, we will move forward with the FY19 budgeting process using a pragmatic, conservative approach.”
Statement from House Democrats on Revenue Estimating Conference from Rep. Chris Hall, Ranking Member of House Appropriations Committee
“Iowa is still facing a budget crisis. Month after month taxpayers have been waiting for the Governor and Republican lawmakers to balance the state budget. At the same time Iowa is unable to pay for basic services like education and healthcare, Republicans are pushing for a $1 billion tax break that would bankrupt this state for the next decade.
After putting $144 million on the state’s credit card last year, the majority party is ignoring common sense along with the bills they’ve already racked up. With wages stalled for most Iowans, we need to prioritize the needs of working families first instead of more lopsided tax breaks for the wealthy and special interests.
Democrats stand ready to balance the state budget and restore fiscal discipline to Iowa.”
Statehouse Republicans ‘still have a giant budget mess on their hands’
Statement by Senator Joe Bolkcom (D-Iowa City) on updated revenue estimates
“You can’t put lipstick on a pig. No matter how Statehouse Republicans try to spin it, they still have a giant budget mess on their hands.
“Here’s the truth:
Governor Reynolds and legislative Republicans have NO agreement on how to balance the current year’s budget.
Governor Reynolds and legislative Republicans have NO plan for balancing next year’s budget.
Statehouse Republicans putting $144 million on the state’s credit card in an attempt to balance FY17 budget.
Governor Reynolds and legislative Republicans are moving a bloated tax plan that gives most of the benefits to millionaires and big corporations.
Governor Reynolds and legislative Republicans are laying the groundwork to break a promise to Iowans that will result in higher property taxes.
“What’s to blame? An agenda by Governor Reynolds and legislative Republicans that includes grossly underfunding our local schools; turning Iowa’s respected, state-run Medicaid safety net into a national disaster; weakening the rights of workers and driving down wages; and showering out-of-state corporations with an all-you-can-eat buffet of tax cuts and tax credits.
“Senate Democrats still stand ready to work with legislative Republicans and the Governor on a mid-course correction that will restore fiscal stability to our state budget by investing in our schools and job-creation initiatives, and taking a serious look at out-of-control spending on tax credits.”