Kent Sorenson » Budget

We can’t build a solid future by borrowing

Kent Sorenson — Fri, 21 May 2010 00:21:07 +0000

Not only have Iowans witnessed hefty increases in state spending, the unemployment rate and property taxes during the last few years, but we have seen an alarming spike in public debt.

As it stands today, Iowa now has the most debt in the state’s 164 year history. A recent tally shows that Iowa has nearly $1.1 billion in public debt associated with our prisons, Vision Iowa spending, school infrastructure, and Governor Culver’s failed I-JOBS program. Prior to Governor Culver being elected and Democrats taking control of the Legislature in 2006, Iowa had close to $200 million of debt in those areas. In just a few short years, the debt amount has quintupled.

Unfortunately, that is only just a fraction of Iowa’s debt. Iowa’s true total debt for all of state government and its agencies, cities, schools, AEAs, regent universities and community colleges is over $11.6 billion as of June 30, 2009 according to a report issued late last year by the State Treasurer. Compared to the year before, that level of debt is an increase of 6.33 percent. With the level of spending happening in Iowa this year, that number is likely to only get bigger.

Debt at all levels of government is growing out of control. The debt crisis in Greece and Europe as a whole has threatened their entire currency and the consequences are beginning to ripple through our stock market and the worldwide economy. Our federal deficit is now well beyond $12 trillion and getting worse by the day.

The simple truth is that government is spending too much of your money.

The long-term solution is two-fold. First, we need to stop spending at such an alarming rate. We need to better prioritize our spending. Secondly, we must grow our economy so we can create more jobs. With the highest unemployment in over two decades, it’s safe to say Governor Culver and legislative Democrats have proven that you cannot tax, borrow or spend your way to prosperity.
Governor Culver’s $1.7 billion I-JOBS program is a prime example. When he announced the idea, he promised it would create 30,000 jobs. In the time since, over 30,000 Iowans have actually lost their jobs. We must move away from the mindset of allowing government to pick winners and losers.

Instead, we must unleash the entrepreneurial spirit and ingenuity of the private sector. We know small business, the engine of economic growth in this state, is responsible for two out of every three new jobs created. We should not be adding additional barriers, such as Culver’s massive property tax increases, that make it more difficult for jobs to be created. We must grow this economy and send a clear message that Iowa is a destination for all those who wish to find success and fulfill their economic dreams.

We must never lose focus on the future and remember that while we aim to help the Iowans of today, we are also building a state so that all of our children, grandchildren and the future generations of Iowans can find a job, build a business and raise their families here.

Future generations of Iowans deserve more than spiraling debt and unsustainable spending year after year. It is simply unfair to them. They deserve a state where opportunity is provided and success is rewarded. Each generation is trusted with the goal of renewing the promise of a more hopeful and optimistic future. Our children and grandchildren are counting on us to make good on our word.

Time to be responsible

Kent Sorenson — Mon, 26 Apr 2010 16:52:20 +0000

The 2010 legislative session has come and gone. Coming into the session the Legislature faced a 1.1 billion dollar budget shortfall. As the session came to a close and we began debating the budget bills it was clear that despite the modest savings made through the government reorganization bill, the Democrats who are in the majority were going to be relying a great deal on one-time money and raiding the cash reserve fund to cure their appetite for spending.

What does that really mean? To the average Iowa family, this might be what the state budget looks like on a family budget scale (courtesy of House Appropriations Ranking Member Rep. Scott Raecker <http://www.raeckerbacker.com/> ).

“For 2010, a family planned their budget for the year and identified that they have $64,000 in expenses. They then looked at the amount of money they would take in and saw they only had $53,000 to spend. The shortfall was $11,000. Rather than look at ways to cut expenses to meet the revenue, the family took a financial gift from an uncle (Uncle Sam) to balance the family budget not worrying about where they would make up the difference this year or next.

“Mid-year, it was clear that there was not enough revenue to cover expenses so the family made some mid-year budget cuts and decided not to pay for some commitments that had previously been made.

“Now the family is planning their budget for 2011 and even after the mid-year expense savings from the previous year, they still have $62,000 in expenses and only $53,000 in revenue to balance the budget except this year Uncle Sam does not have the same financial windfall so they decide to find efficiencies and reorganize the family expenses to save money and take the rest from their savings account. After weeks of talking about expense savings, they come up with their best effort to reduce expenses and they save $700 from their $62,000 in spending. They then decide to take the money in their savings account to balance the budget and will worry about next year when it comes.

“The other thing they do to balance the budget is for about $2,000 in expenses they will have someone else (aka: the property taxpayer) pay for them.”

The state has committed to spend $6.2 billion next year, yet we only have $5.3 billion in on-going revenue. The state is spending one-time money from the federal government as if it came from a great uncle. To balance the budget, the Legislature and governor reorganized government to save $70 million and plans to deplete the state savings account for the rest.

Unfortunately, the commitments that were made to fund Iowa’s K-12 education system will not be fully funded by state dollars so local districts are left to cut teachers and programs – and raise property taxes.

The state budget can be very complex, but in reality the principle is simple. The state should not spend more than it takes in. Just like Iowa families and businesses, we must be responsible in meeting our needs with our available resources. Balancing the budget isn’t good enough if it’s on the back of the taxpayer. The 2010 Legislative Session has left a legacy of liability and burden for Iowans that reaches farther than just one year.

See the Des Moines Register take on this at:
http://www.desmoinesregister.com/article/20100405/NEWS10/4050314/1007/NEWS05
/Big-revenue-gap-awaits-lawmakers-next-session

Spending & Government Reorganization

Kent Sorenson — Mon, 01 Feb 2010 23:02:36 +0000

January 29, 2010

Iowa’s $1.1 Billion Spending Gap

Governor Culver has increased Iowa’s annual budget by $1 billion during the first three years of his term, and now we are going into fiscal year 2011 with a $1.1 billion spending gap. This is not a coincidence; it is gross mismanagement of our tax dollars. How much is a billion dollars, you say? Here’s how I picture it: You would have to spend $38,052 every single hour of the three years Culver’s been Governor to spend an extra billion dollars. That’s over $913,000 in additional spending every single day!

Government Reorganization Savings Inflated in Governor’s Budget:

Governor Culver included $341 million in Government Reorganization Savings for the FY2011 Budget. However, the Fiscal Impact Statement released on January 20 by the Legislative Services Division predicts only $29 million in savings for FY2011. This overinflated tally includes a shift of $50 million in State Patrol Costs to the Road Fund. Folks, shifting expenditures from one fund to another is not a savings to the taxpayers of Iowa.

I am all for shrinking Government if that is what we are truly doing, but I am not going to allow someone to use smoke and mirrors tactics to shift things around and call it something it is not. As I watch this unfold I am going to be honest to my constituents. Last year we offered over $300 million in cost saving ideas in amendments during floor debates and not one was accepted. Instead, the majority party choose to keep buying bug shields, leather seats, and Bose stereos for state cars, rather than being thrifty with Iowans tax dollars.

House Republicans are working to find real solutions to our state budget crisis, and I look forward to receiving your input as we continue this complicated process.

Respectfully,

Representative Kent Sorenson
515-962-2192
kent@kentsorenson.com

Legislative Update

Kent Sorenson — Tue, 26 Jan 2010 21:15:14 +0000

Iowa government is facing its toughest year yet. As you will read below, the current financial outlook for Iowa is bleak. But in the midst of all these problems, I want you to know that House Republican leaders are asking questions designed to hold legislators accountable and keeping the upcoming budget process transparent for all Iowans to scrutinize.

Iowa’s Spending Gap Rises Perilously

During Governor Culver’s term, the gap between state spending and revenue has skyrocketed. In FY2009, the spending gap was $400 million, which increased to $800 million in FY2010. However, fiscal services is now estimating a $1.1 billion spending gap for FY2011.

How Much Money Will Government Reorganization Save ?

Only a couple weeks ago, Democratic leaders of the State Government Reorganization Committee claimed that there were “scores of millions of dollars to be saved” through creating a new operating structure of state government. However, this week we learned that the current recommended changes yield only 1.7 million savings in FY2010, 28.9 million in FY2011, and $66.7 million in FY 2012, which is far short of the earlier prediction of $200 million in savings.

Property Taxpayers Beware! Education Bill Watch

House File 2001, sponsored by key Democrats, allows Iowa school districts to shift up to $380 million in employee benefit costs from the general fund to property taxes. If passed, HF2001 could result in up to $380 million in additional property taxes for Iowans.

In Your Community

I want to hear your input on addressing Iowa’s issues. Our first 2010 legislative forum is on Saturday, January 30 from 9-10 am at the Norwalk Library, 1051 North Avenue. I look forward to seeing you there!

As I write this newsletter, I am struck by the enormity of the job that lies ahead, particularly with Governor Culver and Democrats in control of the legislature. I’ll need your help this year to make sure our voices are heard.

Respectfully,

Rep. Kent Sorenson

Kent.sorenson@legis.state.ia.us

515-962-2192

Beginning Of The 2010 Session

Kent Sorenson — Thu, 21 Jan 2010 05:38:08 +0000

The Iowa Legislature opened its 2010 session this week, and there is much to be done in Iowa to follow the will of its people. I am writing this newsletter to help you stay informed and be involved in your government. Together, we’ll hold our elected officials accountable – for both transparency in how they conduct the legislature, and how they spend our hard-earned money.

Governor Culver’s Condition of the State Speech

Governor Culver’s address on Tuesday included the statement, “I’m proud of the fact that we’ve balanced the budget three years in a row, without raising taxes on hardworking Iowans.” However, the governor has signed utility tax increases, employer tax increases, and levied a $250 million property tax increase during this time. He continually avoided taking responsibility for Iowa’s current budget crisis.

Did you know that over $7 million of the $165 million designated for disaster relief and prevention is being funneled to projects that aren’t even disaster related?

This year Iowans will have the opportunity of voting Culver out of office, but we have a tough year ahead keeping fiscal irresponsibility in check.

Let Us Vote Rally

On Tuesday, January 12, Iowans from all across the state once again came to the statehouse to ask their legislators to let them vote on a marriage amendment. I had the opportunity to speak to the 1000+ Iowans gathered and I am humbled by the overwhelming grassroots effort to protect the vital institution of marriage in Iowa.

Hot Topics Ahead

I’ll be keeping you informed as we take on numerous fundamental issues in this session, including balancing the state budget, improving education, addressing labor and unemployment issues, enacting gun legislation, and once again, preserving the institution of marriage in Iowa.

In Your Community

Join me for the first of our 2010 legislative forums on Saturday, January 30 from 9-10 am at the Norwalk Library, 1051 North Avenue. I look forward to seeing you there!

Thank you for giving me the opportunity to represent our district in the House of Representatives. That responsibility means a lot to me, and I am working hard to ensure your voice is heard.

Respectfully,

Rep. Kent Sorenson

Kent.sorenson@legis.state.ia.us

515- 962-2192

More Budget Woes

Kent Sorenson — Thu, 08 Oct 2009 03:29:44 +0000

The Revenue Estimating Conference met today to revise the revenue estimate for FY 2010 and set the revenue estimate for FY 2011.

The previous estimate for FY 2010 was $5.843, or -1.4 percent compared to actual adjusted FY 2009. The new estimate is $5.438 billion, or -8.4 percent compared to FY 09. This is $415 million lower than the estimate used to create the FY 2010 budget.

When the ending balance is taken into account, the budget is $315 million short for FY 2010. Also by law the Governor is required to refill the $45.3 million taken from the EEF to balance the FY 09 budget. In order to balance the budget he would need to order a 6.2 percent ATB cut. If he not withstands the EEF language, he would need a 5.4 percent ATB cut. However, it will have to be bigger than that because he has to leave a cushion in case the December or March estimates are lowered.

The initial estimate for FY 2011 is $5.412 billion, or -0.4 percent compared to the new estimate for FY 2010. The spending gap is at least $1 billion for FY 2011 but we will have more accurate numbers once Fiscal Services updates the general fund balance sheet.

It is expected the Governor will enact an across the board cut within the next few days. The Governor’s spokesman suggested it will be larger than 5.4 percent. Stimulus funds will not be impacted by the ATB cut.

While the national economy is partially to blame, the spending and borrowing of the Democrats has contributed to the problem. And now our children will be carrying the burden of the current administration mismanagement.