Republican elected officials are sending a mixed message about Iowa’s finances. Before the 2011 legislative session began, Republicans were outraged about a so-called “unaffordable” union contract that would give state workers modest raises, at a cost of about $100 million a year for two years. Barely a week into the session, a party-line Iowa House vote approved a broad “deappropriations” bill, in which about a third of the savings came from cutting Iowa’s preschool grant for four-year-olds. The universal voluntary preschool program was expected to cost $70 million to $75 million per year (according to Legislative Services Agency estimates), or up to $90 million by some other estimates.
Since then, House Republicans have passed House File 185, which allows zero growth in K-12 education budgets for the next two fiscal years. That was an unprecedented move. In nearly 40 years, the Iowa legislature has never approved less than 1 percent allowable growth for school district budgets: not during the farm crisis, not during the recessions and budget crunches of the early 1980s, early 1990s, 2001-02 or 2009-10. Now, we are told, our dire fiscal condition doesn’t leave any room to spend $65 million to allow school districts to increase their budgets by 2 percent.
Yet on February 16, the Iowa House approved House File 194 on a mostly party-line vote. The bill would cut Iowa’s individual income tax rates by 20 percent, which the Legislative Services Agency estimates would cost $330 million during fiscal year 2012 and more than $700 million in each of the next three fiscal years. How Iowa can afford that loss of revenue and what services would be cut to keep the budget balanced, House Republicans don’t say.
Meanwhile, Governor Terry Branstad plans to lay off hundreds of state workers to cut labor costs and sent state legislators a draft budget with no allowable growth for K-12 schools for two years. This week Branstad offered a preschool plan that would support fewer children at a lower cost ($43 million per year). He and his Department of Education director, Jason Glass, have repeatedly said Iowa cannot afford to continue the preschool program as currently structured. Yet Branstad’s plan to cut corporate taxes in half would deprive the state of at least $100 million in revenues. He has proposed about $450 million in commercial property tax cuts, with the idea that state government would reimburse local governments for much of that lost revenue. If our budget constraints are so severe, how can we afford those policies?
More context on the state budget is after the jump, along with details on the Iowa Senate’s resistance to Republican tax and education funding proposals.
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