FROM THE DESK OF REPRESENTATIVE DE BOEF

February 10, 2005

This week began with a freezing rain as my husband and I left our church in Oskaloosa at 6:00 AM.  He is part of a work team headed to St. Martin to build a church there.  Since I go to Des Moines every Monday morning, I volunteered to load the suitcases in my van and help the team get to the airport.  The drive to Des Moines was a very nerve-wrecking 2 ½ hours on solid ice but we managed to make it safely.

I am sorry to say that a former State Representative and police sergeant from Ottumwa, Galen Davis, did not arrive safely at his destination.  He was forced off the road near Delta and killed earlier this week.  His special friend, Diane Orfanos was injured in the accident and is recuperating from a seriously crushed arm.  Diane and her family are my neighbors and my prayers are with them and the Davis family.

Despite both of these events, business at the State Capitol went on as usual.  The Governor’s budget continues to be a hot topic.  The current 2005 general fund budget is $4.519 billion.  The Governor’s recommended general fund budget for 2006 is $5.044 billion, an increase of $525 million or 11.6%.  He would like the Legislature to appropriate $213 million from the 2005 ending balance for his use in the 2006 budget, even before we know how much the ending balance will be.  Moving money from 2005 to 2006 increases the 2005 spending to make the 2006 increase look smaller – 6.6%.  Spending 2005 money in 2006 causes a real budget hole for 2007 because it’s not built into the base budget.

The Revenue Estimating Conference projected in December a revenue increase of only $157 million, not anywhere close to $525 million.  Therefore, the Governor has proposed $200 million in tax and revenue increases to attempt to balance his budget: 1) cigarette tax increase of 80 cents per pack for $130 million, 2) combined corporate reporting tax increase for $25 million, 3) transfer of reserve fund interest of $9 million, 4) transfer from the tobacco endowment of $35 million, and 5) an increase in speeding ticket fines of $1.7 million.

The Governor’s proposed budget not only raises taxes, but it is not sustainable in the next couple of years.  Increasing spending by over 11% with only 3% growth is not sound fiscal policy.  It is also not good tax policy to make the Medicaid budget dependent on the cigarette tax.  Cigarette tax revenue is deposited into the general fund and can be used for any general fund appropriation.  Raising the tax by 80 cents will make Iowa’s tax higher than any state in the Midwest and will result in smokers crossing the border or using the internet to buy cigarettes. In addition, this is a tax we actually want people to quit paying because of the movement to get smokers to quit.

I’m disappointed that the Governor’s new system of purchasing for results did not result in a responsible budget.  We still don’t know the final results of his collective bargaining agreement with state employees, although the final calculation of his recommendation includes a $74 million increase.  Not included in the general fund budget is spending recommended by the Governor for the Values Fund.  He wants to borrow $800 million that would be spent over five years and paid back over 20 years with funds from potential increased gambling revenue, making the state even more dependent on gambling.

Question of the Week…

Should the state of Iowa place increased restrictions on the access of products such as Sudafed in an attempt to stop the Meth labs?

I would appreciate your input.  My phone number at the Capitol is 515-281-3221, or e-mail me at bdeboef@legis.state.ia.us.  I would welcome visitors at the Capitol, too!