Governor Culver proposed his budget yesterday afternoon. Going into the session, it was noted that Iowa had a budget deficit of about $500 million. The Governor fills this hole in the following manner.
-Uses $48 million of Federal bailout funds
-Reduces the tax credits by $52.5 million
-Cash Reserve Spending – $207.5 million
– Government reorganization savings – $352 million
Total proposed savings of: $660 million
The Governor had several positive budget increases:
-Education $60 million for allowable growth
-Education $100 million for K-12 cash reserves
-Iowa tuition grant increase of $3.3 million
-Nonpublic school textbook increase of $62,500
-Community College increase of $6 million
After dissecting the proposed budget, it seems there is no rationale on how it will be a balanced budget. The government reorganization savings will be about half of what the governor has anticipated. Also, the governor doesn’t spell out any tax credits he wants to cut. It’s interesting to hear all sides saying that this document is so flawed that it cannot even be used as a starting point.
The pressure will be on the legislature to craft a budget that will actually be balanced yet create sound fiscal policy for the state.
Final comment for the week: We did NO bills on the floor this week. It seems several of the fast track bills, like Government reorganization, have had enough opposition to put them on hold. Transparency is always a good thing!