Stimulus, tax revenues remain ‘moving target’ in tough budget talks

DES MOINES - Sen. Bob Dvorsky says he's bracing for a "wild, interesting ride" in the coming weeks as the 83rd General Assembly shuts down its 2009 session.

That's probably because, as chairman of the Senate Appropriations Committee, the Coralville Democrat shares the task of assembling a $6 billion spending plan to fund state government operations for fiscal 2010. The work comes at a volatile time of shrinking revenue and national recession.

"It's a moving target," Dvorsky said. "The recession that we're in is unprecedented, and the federal stimulus is also unprecedented. Everything is a new situation."

Sen. Ron Wieck, R-Sioux City, said the tough state budget outlook has had the effect of "letting the air out of the session" by knocking out big-ticket ideas and tempering the 2009 workload.

"I don't want to complain that we haven't done much on policy because there's some really bad policy out there that we could be doing, and I'm happy that we're not doing that," he said.

At the same time, Wieck said, the federal stimulus money has served as a bailout for Iowa Democrats who won't have to curb their overspending.

Gov. Chet Culver, however, credited the stimulus money with allowing Iowa officials to maintain increased funding commitments for education and Medicaid.

"Without that, it really would have been difficult to prevent layoffs statewide," he said.

Budget decisions will become a legislative obsession throughout March and into April as final pieces of the fiscal puzzle are assembled. Foremost among those details will be the flexibility provided by Iowa's $1.9 billion chunk of the federal economic stimulus money and a March 20 revising of state tax revenue estimates.

"Those are still the two wild cards out there," Dvorsky said.

Once those are known, Senate Majority Leader Mike Gronstal, D-Council Bluffs, said, he is pushing for a swift, orderly shutdown well ahead of the unofficial May 2 adjournment target.

By contrast, House Majority Leader Kevin McCarthy, D-Des Moines, has discussed shutdown scenarios that call for temporarily sending lawmakers home if the federal money numbers are in flux and reconvening later. Or, he said, the Legislature could pass a bare-bones budget and return in special session to finalize numbers and beef up priority areas based on better data.

Gronstal doubts those options will be necessary.

"I have one shutdown scenario - to finish our work in very early April and be done for the year," Gronstal said.

"Does it get any easier to say ‘no' after you've said ‘no' four times? We don't have any resources," he added. "There's not going to be a lot of things we're going to be able to do, so we may as well say ‘no' once and mean it and not spend a lot of time with folks (who) are trying to get around the ‘no'."

Wieck said he has been "pleasantly surprised" to see labor-backed bills - that he expected Democrats would shove through - unable to muster the votes needed for passage.

That positive, he said, has been offset by the fact that Republicans feel shut out of the budget-making process and fear session-ending efforts to increase the state gas tax or slip unpopular policy changes into must-do budget measures.

"This session truly is not over until it is over," said Rep. Jeff Kaufmann, R-Wilton, who pledged to keep vigilant watch for political mischief.

Even with the tight budget, Gronstal predicted the 2009 session's work product will be noteworthy, having already provided $56 million in direct disaster aid and self-help options for communities to use in their recovery efforts.

Gronstal expects lawmakers in the coming weeks will approve Culver's $700 million infrastructure bonding plan to further aid disaster recovery and spur employment, and enhance the effort to get all Iowa children health coverage by 2011.

"The shrinking economy at the national level has perhaps lowered people's expectations overall," he said. "I think that's fairly obvious."