UPDATE: Gov. Terry Branstad has proposed a fiscal 2014 state budget that eliminates both the chronic spending gaps and “bad budgeting” tricks that have dogged the state’s balance sheets for years, State Auditor David Vaudt said Monday.
However, he was not so complimentary of state lawmakers, who he said still issue spending targets that lack appropriate details for reliable analysis and present budgeting numbers “on a distorted basis” that create “an improper appearance” to the public that they are spending a smaller amount of tax collections than they really are.
Vaudt, in his yearly report to reporters, gave the governor high marks in analyzing the proposals for fiscal years 2014 and 2015 that Branstad submitted to the split-control Legislature last January.
“These are the most fiscally responsible budget proposals I have analyzed in my 10 years as state auditor,” said Vaudt, a Clive Republican who praised the governor and Legislature for curbing the practice of using one-time payments to the state for on-going expenses. “These budgets are fiscally sustainable and plan for the long term.”
The auditor credited “modest” yearly spending growth coupled with better-than-expected tax collections as the main reasons state budget-makers have succeeded in eliminating a $764 million spending gap over three fiscal years – an accomplishment he heralded as “very significant” and “a huge improvement.”
He said the governor’s plan would spend 99 cents for each $1 in tax collections for the fiscal year that begins July 1.
“When I look back just three budget years ago, we were in what I call a real pickle,” Vaudt told reporters, “and now we’ve actually made a huge difference, I think, with what we’re doing, how we’re thinking longer term, and that we’re trying to live within the dollars that are available rather than reaching out for other one-time money to make it work.
“We’re definitely on the right track today. I feel very good about Iowa’s financial condition today versus what it was a few years ago,” he added.
According to the auditor’s report, Branstad’s fiscal 2014 budget would spend $6.909 billion, which would result in an $81 million surplus as of June 30, 2014. However, that plan includes no new money for K-12 schools for the next school year and no new money to fund salaries and benefits for state employees in fiscal 2014 – issues that will have to be negotiated with legislators in the coming months.
Vaudt also noted that the governor’s budget still relies on about $37 million in one-time money to cover disaster payments made by the Iowa Executive Council using the state’s economic emergency account. He said those payments should be treated as ongoing expenditures within the general fund appropriations.
During his weekly news conference with reporters Monday, Branstad said his administration has worked hard to implement sound financial practices that create budgets that are sustainable for the long term.
“If you look at the mess that we inherited two years ago and you look at all the bad-budgeting practices, I think we’ve corrected over 90 percent of them,” the governor said. “There are still some areas where, due to the fact that we have to work with the Legislature, we’ve not been able to correct those. We want to be as close as possible to the good financial practices that the auditor advocates.”
Sen. Robert Dvorsky, D-Coralville, chairman of the Senate Appropriations Committee, said the state’s improved fiscal outlook is the product of good bipartisan work by House Republicans and Senate Democrats working with the governor. He said Iowa’s robust economic recovery also has aided those efforts.
Vaudt said he uses a different budgeting format when analyzing state fiscal spread sheets, so his numbers do not reflect the $800 million-plus surplus shown in legislative budget documents. He also uses different spending assumptions than lawmakers employed in calculating their fiscal 2014 spending targets.
Last month Republicans and Democrats in the split-control Legislature issued separate spending targets that were about $484 million apart.
Majority House Republicans unveiled a budget proposal that sought to spend $6.414 billion, while Democrats who control the Senate proposed a fiscal spending plan slightly below $6.9 billion. Branstad’s budget proposed landed in the middle with the $6.538 billion plan he unveiled last January.