Time to be responsible
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 <http://www.desmoinesregister.com/article/20100405/NEWS10/4050314/1007/NEWS05>