Budget crisis may make dramatic change more appealing

Bad enough that Gov. Chet Culver has cut his own salary and has asked his department heads to do the same. Bad enough that he's embracing Republican cost-cutting proposals, such as selling the state vehicle fleet.

On the upside, a crisis this deep could lead to big changes.

“If your audience is very worried and you can craft your argument to match the worry, you might be successful in winning the change you seek,” said Donald Moynihan, associate director of the La Follette School of Public Affairs at the University of Wisconsin-Madison.

Moynihan said Culver's 10 percent across-the-board cuts are a blunt ax approach that provides “some sort of positive political symbolism - everyone sharing the pain. It doesn't differentiate between programs that are essential and programs where resources are perhaps less necessary.”

Culver's 10 percent, or $585 million, cut followed a prediction by the Revenue Estimating Council that state revenue would decline 8.4 percent, or $415 million, this year.

“It's all about priorities,” Culver said. “I'm still confident that if we set appropriate priorities we can minimize the impact cuts will have on essential services.”

Interest groups that regularly advocate tax and budget changes at the Capitol are wasting little time touting their big ideas.

Few people are tooting the crisis-as-opportunity horn louder than Ed Failor Jr., president of Iowans for Tax Relief.

“When you're up to your armpits in alligators, you either have to drain the swamp and get away from the alligators or you will be on the menu,” Failor said.

Iowans for Tax Relief is offering suggestions to save as much as Culver's 10 percent cut while protecting priorities. Among them are eliminating the Department of Economic Development, merging the departments of Natural Resources and Agriculture and Land Stewardship, and eliminating income taxes as a way to attract businesses and jobs.

Across the ideological aisle, Peter Fisher with the Iowa Fiscal Partnership said the discussion has to be about more than cutting taxes.

Fisher is calling for closing tax loopholes and eliminating tax credits that don't produce results. Tax credits to businesses have grown from $180 million to $421 million in just three years, he said.

Iowa's lack of a combined reporting law leaves as much as $80 million in revenue uncollected from multistate corporations, he said.

“Not only is that lost revenue, but it's unfair to Iowa businesses competing with those corporations,” Fisher said.

Even though the ideas aren't new, they're likely to get a hearing, said Iowa State University political scientist Matthew Potoski.

“Big changes are more possible in time of crisis than not, but I don't have a clear sense of whether the changes are better,” he said.

Legislative Democrats have pitched in, collecting budget-cutting ideas at www.legis.state.ia.us/aspx/SurveyForm/Improving_StGvt/

Democrats and Republicans had similar Web sites during the 2009 session. No one, however, seems to recall any suggestion that became law.