Words From Windschitl

The State Deficit

This week in the House Appropriations Committee meeting members were given a preview of the 2008 and 2009 budgets by the non-partisan Fiscal Services Department.  The preview was not pleasant.  According to the Fiscal Services Department, if Governor Culver’s budget recommendations are approved, the State of Iowa will face a $350 million deficit in 2009.

Currently at the end of each fiscal year Iowa Law says the left over balance in the General Fund is split between two important accounts; the Senior Living Trust Fund and the Cash Reserves.  This law is in place to save money for use in an economic emergency and to ensure the Senior Living Trust Fund has enough money to support our older Iowans.

Iowa law also states the Cash Reserve account must be filled at 10% of total spending.  With Governor Culver’s budget proposal the amount is $54.8 million this year.  Instead of the remaining amount going to the Senior Living Trust Fund (SLTF) Governor Culver has proposed to shift $81.7 million from the 2008 ending balance, leaving the SLTF without its needed deposit.  The Fiscal Bureau estimates without the deposit to the SLTF this year, it will be empty by 2009.

On top of a $500 million increase in spending last year, proposing another $500 million spending increase this year and shorting the Senior Living Trust Fund, the Governor is also recommending $332 million in tax increases and the use of one-time money to pay for ongoing programs, this is not a good solution.  This plan only digs Iowa taxpayers into a deep financial hole to start 2010.

Here are the tax increases and shifts in the Governor’s 2009 budget recommendations:

Ø      Combined corporate reporting tax increase - $75 million tax increase on businesses.

Ø      Shifting gambling tax proceeds from the Rural Iowa Infrastructure Fund (RIIF) -- $90 million shift to the general fund, making us more dependent on gambling revenues.

Ø      One-time taxable bond proceeds - $67 million for a third series of tobacco bonds, this will put Iowa in debt for the next 25 years.

Ø      One-time transfer from the Healthy Iowans Tobacco Trust (HITT) - $36 million fund transfer.

Ø      Bottle bill tax increase - $40 million for the two-cent increase on cans and bottles.

Ø      Improved court fine collections -- $18 million for increased collection of court fines.

Ø      Gift card grab -- $5 million due to taking revenues from expired gift cards from consumers and retailers.

Ø      Miscellaneous transfers $6.6 million for workforce development and child care.

I am troubled by the majority party’s care for the budget over the past two years.  We see the crisis occurring with the rise of debt in the United States, and the effects on our economy.  President Bush is urging Congress to pass the stimulus package providing tax rebates to the people.  This is not the time for government to tax more and spend more.

I believe now more than ever we must be fiscally responsible and more conservative.  We need to lower taxes across the board and provide real property tax relief.  We also need to maintain our crippling road systems and fund our educational system by providing protections, not another layer of government, on current revenue streams.

Our economy is fragile and all considerations of spending, raising taxes, funding programs, and increasing the size of our government need to be cautiously considered.

I now, and always, will remain true to the constituents of House District 56 by continuing to be fiscally conservative and responsible.  I will do this by voting against unnecessary taxes, budget increases, and growth of government. 

I appreciate your input on the bigger issues that we are facing at the Iowa Capitol this session; repeal of SILO (School Infrastructure Local Option tax) for a permanent statewide tax, TIME-21 to increase funding for our roads, the state budget, or any other issues important to you.  Please contact me with any questions or concerns, my number at the Statehouse is 515-281-3221 and at home is 712-642-4334 or e-mail me at matt.windschitl@legis.state.ia.us.

“While I take inspiration from the past, like most Americans, I live for the future.”
Ronald Reagan

Matt Windschitl

Iowa State Representative

House District 56