As House Republicans begin rolling out our budget targets, we will craft a budget with job creators in mind. Our conservative approach will create stability and certainty for all Iowans.
Our Budget Returns to Commonsense Budgeting Principles
We will align ongoing spending with ongoing revenue. Iowans cannot afford a government that spends more money than it takes in. Anything less jeopardizes Iowa’s long-term economic health.
We will end the practice of using one-time money for ongoing expenses. This is not how
Iowans balance their own checkbooks at home and it’s not how House Republicans will balance the government checkbook.
As economic uncertainty continues throughout the country, it is imperative that we take a conservative approach to the budget to give stability for Iowa’s job creators. Controlling government spending by spending less than the government takes in demonstrates a commitment to commonsense budgeting and economic health that employers deserve. The threat of higher taxes kills job creation.
Our Plan Reflects Iowans’ Priorities
The House Republican 2012 Budget Targets Reflect a Long-Term Approach: The private sector isn’t growing, family incomes aren’t growing…government shouldn’t be growing.
House Republicans have continued their efforts of listening to Iowans and digging deep into the budgets, with a line by line review to cut out waste and find efficiencies. With Iowans help, we will once again create a state budget that is efficient and effective.
The House Republicans will spend just 97 percent of ongoing revenue. By comparison, the Republican budget spends $313 million less than Fiscal Year 2011, the Democrats’ last budget. This is an efficient budget that funds Iowans’ priorities.
House Republican budget targets reflect a growth rate of just under 1%.
For the first time since FY 2000, property tax credits are fully funded.
House Republicans have included a provision requiring every state employee contribute at least $200 a month to their health insurance. Many contribute zero right now.
The ending balance of roughly $300 million is deposited in the Taxpayer Trust Fund.
Taxpayers can no longer afford to carry the full burden for every state employee’s health insurance. Asking all employees, including state legislators, to contribute at least $200 towards their own health care is the right thing to do
Now is not the time to increase spending. Any excess revenue is an overpayment by the taxpayers and should not be spent. As we operate under the threat of the federal government eliminating money sent to Iowa, we should be prepared for the worst.
The Senate Democrats’ have a history of increasing government spending and using budget tricks to spend more than the state has in ongoing revenue. These outdated practices mean we will back in a few years dealing with the same problems. House Republicans are committed to passing budgets that are fact-based and accountable to Iowans.
In fiscal year 2007, the last budget Republicans approved prior to regaining the majority in the Iowa House, was just $5.3 billion. Over the last 5 years state government grew too fast and spent too much. State government is still taking too much from Iowans and Iowa employers. Savings and efficiencies are necessary to provide the certainty needed for taxpayers to start investing and planning for the future instead of just treading water.
Jobs, Savings and Certainty
The best way to help Iowa’s employers to begin hiring people and investing in their businesses is to do two things: address property taxes and keep control of government spending.
Property tax reform provides savings for individuals and businesses and it provides certainty for those same people as the plan for their futures.
Controlling government spending by spending less than the government receives demonstrates a commitment to commonsense budgeting and economic health that employers deserve. The threat of higher taxes stops employers from hiring and investing.
Iowa families and Iowa employers are struggling with high property taxes and government that is demanding more and more. This burden is impeding job growth and hurting the economic health of our communities.
Our goal is to have a property tax system and state budget that contributes instead of takes away from economic, family and community health. Iowans deserve quality jobs that will develop into careers. They deserve the peace of mind to plan for their futures.
Property Tax Reform & Relief
Over the last ten years, school rates have increased 60 percent, county rates have increased 64 percent and city rates have gone up 74 percent. Over the same time period, Iowans’ personal income only grew by 46 percent. These kind of out-of-control tax hikes are not sustainable.
If we do nothing, the hardworking Iowa taxpayers are looking down the barrel of a $2.3 billion property tax increase over the next 10 years, with the majority of that falling to homeowners
Property tax reform affects Iowa’s economy and jobs. High property taxes keep businesses of all sizes from expanding, hiring or even settling on Iowa.
We must ensure that one group of taxpayers is not pitted against the other. ALL Iowans deserve to see relief in their tax bill. Additionally, we must not shift the burden to any class of property taxpayers to another.
The House GOP plan is the only plan that addresses all classes of property. Leaving out residential property taxpayers locks in a shift that results in a significant property tax increase for homeowners. The House GOP plan provides certainty to taxpayers and allows long term planning by employers.
The House GOP plan is the only plan that removes taxing authority. This has to happen in order to ensure real, genuine property tax relief. Otherwise, it is short term temporary patch and the Legislature will be back in the same place in a few years trying to address the same problem.
Democrats’ insistence on protecting local government revenues continues to be the major stumbling block in achieving any level of real, genuine property tax relief. In fact, the plan approved by the Senate Democrats last year leads to an increase in residential property taxes. We can do better than picking one set of winners in this effort.
Myth of the $1 Billion Surplus
• The so-called “surplus” is actually:
o $600 million in one-time cash reserve funds (needed to help the state cash flow)
The state budget is really about $12 billion. $6 billion appropriated by the state and $6 billion received from the federal government.
State law requires that 10% of the budget be set aside in cash reserves and not spent on ongoing operations. This means the $600 million is off-limits for existing and new spending.
The Legislature can legally spend the $250 million in one-time ending balance money from this year. However, this is a reckless and short-sighted budgeting practice because it builds $250 million of spending the following year with no one-time money to pay for the new spending.
While the Legislature can spend up to 99% of the projected revenue, it is not required to spend at the level. The economy, federal debt, and anticipated federal cuts that will impact the $6 billion in federal funds receive by the state require commonsense and discipline.
o $250 million in one-time ending balance from this year (FY 12)
o $200 million in on-going revenue growth for next year (FY 13)
Controlling Government Spending and Creating Jobs Go Hand in Hand
Controlling government spending by spending less than the government receives demonstrates a commitment to commonsense budgeting and economic health that employers deserve. The threat of higher taxes needs to be removed.
Our goal is to have a responsible state budget that contributes instead of takes away from economic, family and community health. Iowans deserve quality jobs that will develop into careers. They deserve the peace of mind to plan for their futures.
Iowa’s employers need a commitment from the Legislature to keep government from spending more than it takes in. Spending more than the state receives sets up individuals and employers for tax increases. They need the certainty that this will not happen.
The benefit of an efficient and responsible state budget is jobs, savings and certainty.
In fiscal year 2007, the last budget Republicans approved prior to regaining the majority in the Iowa House, was just $5.3 billion. State government is growing too fast and spending too much. State government is still taking too much from Iowans and Iowa employers. Savings and efficiencies are necessary to provide the certainty needed for taxpayers to start investing and planning for the future instead of just treading water.
This is what every department and every agency should be submitting to Iowans, a plan to save money instead of plans to spend more their tax dollars.
House Republicans commend Gov. Branstad and officials at the Department of Transportation for reviewing their department to find efficiencies. For those areas that require the legislature to act, we will begin the review right away.
Iowans deserve an efficient and effective state government and House Republicans are going to continue to work hard to ensure taxpayer dollars dedicated to roads and bridges are being spent wisely.