Overshadowed by other news from the capitol this week, the Iowa House approved the first budget bill of the 2011 session. In keeping with Governor Terry Branstad’s desire to move Iowa to biennial budgeting, the House Appropriations Committee wrote House File 642 to include two years of funding for the Department of Transportation. In most areas of the DOT’s work, House File 642 allocates the same amount of money for fiscal year 2013 (July 2012 through June 2013) as it does for fiscal year 2012 (beginning this July, ending next June).
Since Iowa Republicans have promised countless times not to spend more than the state takes in, it’s important to remember that there are no Iowa revenue forecasts for fiscal year 2013. The Revenue Estimating Conference meets periodically to revise revenue projections for the current budget year and the one to come, but even the most preliminary numbers for fiscal year 2013 have yet to appear. Iowa law restricts general fund spending to no more than 99 percent of projected revenues, but if Republicans who control the Iowa House write the remaining budget bills they way they wrote House File 642, they will have no idea whether they are spending 89 percent or 99 percent or 109 percent of state revenues in 2013. They’ll be making a shot in the dark.
Over the last several decades, many states have moved away from biennial budgeting. It’s hard enough to forecast revenues 12-18 months into the future, let alone for a full year beyond that. Minnesota’s use of biennial budgets is one reason why its fiscal problems during the “Great Recession” were much worse than Iowa’s. But at least in Minnesota, lawmakers have two-year revenue projections to work with when they draft a two-year spending plan. Iowa House Republicans seem ready to take on faith that revenues will be at least as high in fiscal year 2013 as in fiscal year 2012.
State Representative Tyler Olson, the ranking Democrat on the House Appropriations Committee, argued against pulling numbers “out of thin air” for House File 642. During floor debate on March 30, he offered an amendment to make the bill cover one fiscal year instead. His amendment failed on a party-line 58 to 40 vote (pdf). Shortly after, House File 642 passed 60 to 39, with only Democrat Brian Quirk (district 15) joining all Republicans present to vote yes. House File 642 contains a $5.2 million appropriation to replace a facility in New Hampton (Chickasaw County), which is in Quirk’s district.
In the Democratic-controlled Iowa Senate, biennial budgeting will be a tough sell. I expect the Senate Appropriations Committee to strike all fiscal year 2013 appropriations from House File 642. Add this to the list of contentious budget issues that Senate Democrats, the governor and House Republicans must settle during the next month. I have no idea what concessions either side will be willing to make.
Speaking of transportation, Bleeding Heartland readers may recall that Branstad hasn’t yet appointed a new director for the Iowa DOT. Instead, he asked Nancy Richardson to stay on in that role through the end of the 2011 legislative session. Branstad’s spokesman said in December that the administration needed extra time to do a nationwide search for a director. That would be unlike the way Branstad filled other state government positions. Jason Clayworth reported this week that as governor-elect, Branstad interviewed only one candidate for many jobs. Often Branstad overlooked all applicants to choose a person who hadn’t even applied for the position.
“In most cases I sought out people for these positions,” Branstad said. “Some of them applied, but, for the most part, I really went after people who I thought would be the best.”
I still wonder whether Branstad has always had a particular person in mind to run the DOT. Delaying that appointment until after the legislative session would make sense if Branstad’s choice was unavailable until late spring or summer, or was controversial enough to face problems during the Iowa Senate confirmation process.