Iowa GOP budget plan wins committee approval

DES MOINES – House Republicans are fast-tracking their plan to reduce state spending by $545 million over three years, passing it out of committee on the third day of the 2011 session.

On a party line vote Jan. 12, the House Appropriations Committee approved House Study Bill 1. The de-appropriations bill will cut spending $48 million in the year ending June 30 and $496 million more over the next two years.

The net savings will be $503 million, according to House Appropriations Committee Chairman Scott Raecker, R-Urbandale. The GOP plan includes supplemental appropriations for indigent legal defense and to eliminate the waiting list for mental health services.

The plans also calls for setting aside $327 million in a Taxpayer Relief Fund, he said,

Raecker defended the high-speed committee action that makes the bill eligible for floor action next week, The process has been “open and transparent” with the plans released to the public a week before the session opened, he said.

Also, the committee will have a public hearing from 6:30 to 8:30 p.m. Jan. 18 in the House chambers at the Capitol.

The pace is not unprecedented, Raecker said. Four years ago, Democrats passed promised increases in the minimum wage and cigarette taxes early in the session, Raecker said.

“This year, Republicans campaigned on smaller, smarter government, so we're going ahead to deliver on those campaign promises,” Raecker said. Although HSB 1 will be eligible for floor action Tuesday, he said it will be at least Wednesday before it will be debated.

Democrats questioned the need for the cuts given that the state has $950 million in reserves funds and the projected year-end balance.

“Budgets are about choices … and all cuts are not efficiencies,” Rep. Tyler Olson, D-Cedar Rapids, said. He promised Democrats would be offering other choices.

The first choice Democrats offered was an amendment to direct any revenue in the tax relief fund to commercial property tax relief, which Rep. Andrew Wenthe, D-Hawkeye, called a longstanding problem. It would aid small businesses and job creation, he said.

Although Republicans agree there is a need for commercial property tax relief, Rep. Nick Wagner, R-Marion, said that's a policy decision better left to the Ways and Means Community.

He assured the minority party that Republicans have no secret plan for the Taxpayer Relief Fund.

AFSCME President Danny Homan, who referred to the bill as the “Cut and Gut the Middle Class” bill, said he knows the GOP's plan. At a time Republicans say the state is broke and can't afford to pay for services, Homan said the savings will be used to give tax breaks to Wal-mart, Wells Fargo, Wellmark Blue Cross Blue Shield and others.

“This fund will be used to cut corporate taxes and commercial property taxes, while at the same time cutting services to seniors, the most vulnerable kids, renewable energy, education, small businesses, our state universities, and other services that lift Iowa's middle class up,” he said.

Republicans are operating from the “same old playbook,” according to Homan. They'll “cut taxes for those who don't need it, cut services for those who rely on them and cut the jobs of the people who provide them.”

Republicans also rejected Democratic amendments to spare funding for a 10-hour per week program that enrolls 21,300 four-year-olds in 326 of Iowa's 359 school districts and a smoking cessation program.

Governor-elect Terry Branstad has proposed changing the funding for preschool, perhaps moving to a voucher program to assist families that could not otherwise afford preschool.

While the House committee was debating the de-appropriations, Senate Appropriations Chairman Bob Dvorsky, D-Coralville, said the current year budget will have to be revisited in light of changing conditions.

It was “one of the toughest budgets we've done in years and years and years,” Dvorsky said. “Now the economy has improved and revenues are coming in better, so now we need to look at it again.”

Sen. Jack Hatch, D-Des Moines, warned against taking a “meat cleaver to the human services budget.” He asked Branstad to consider using the projected $331 million ending balance to offset the cuts at mental health institutes the Department of Human Services announced earlier in the day.

Persons wishing to speak at the public hearing from 6:30 to 8:30 p.m. Jan. 18 may sign up at the Legislative Information Office (LIO), Room G16, located in the Iowa State Capitol, or call the LIO at 515-281-5129. If unable to attend, you may e-mail written testimony to the LIO:

lioinfo@legis.state.ia.us Please type Testimony in the subject line. The first 40 persons to sign-up will speak. After that, there will be a waiting list.