The midyear budget cuts signed by Gov. Kim Reynolds last week have some good, some bad and some ugly.
Iowa policymakers passed a de-appropriations package to help address the state’s budget shortfall. That measure, Senate File 2117, eliminates $25 million from state agencies during the final few months of the current budget year.
First, the good. We are pleased to see lawmakers and the governor settled on a smaller amount to cut than previously proposed.
Earlier this year, Senate Republicans proposed $52 million in cuts, and later another $34 million proposal. Those extreme cuts would have unleashed untold havoc on public services.
Lawmakers ultimately opted to repurpose $10 million in uncommitted gaming revenues, which had been earmarked for economic development incentives. There’s no doubt using those dollars to diminish the impact of midyear budget cuts is preferable to dumping them into the state’s already-generous economic development program.
But there’s also the bad. Democrats are complaining the midyear cuts could have been avoided altogether. Many would have preferred to generate new revenue, shrink the year-end balance or consider dipping into the state’s rainy day fund.
Most notably, the Republican budget cut law takes $11 million from the University of Iowa and Iowa State University, along with $500,000 from the state’s community colleges. Many Iowans are extremely concerned about the impact these huge cuts will have on our higher education system, especially at a moment when everyone seems to agree job and career training are crucial to the state’s economic future.
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And finally, there’s plenty of ugly, especially when you put the budget cut package in context of other Republican priorities this legislative session.
Perhaps the worst part about these last-minute budget cuts is Iowans have no assurance we won’t be back in the same spot again next year. Despite a string of lackluster revenue projections in recent years, Republican policymakers are on a mission to skim even more off the state’s coffers.
Reynolds and legislative Republicans have vowed to pass a major tax reform package yet this year, though Iowans still have no clear idea what it will look like, with only weeks left in the session.
A plan released by the governor’s office earlier this year would reduce $1.7 billion from Iowans’ tax bills in its first six years, while a bill already approved by the Iowa Senate would slash $200 million in its first year, ramping up to $1.2 billion annually in five years.
It does not take an accountant to see a budget crunch year is a poor time to pass historic tax cuts. This is a moment to tighten our belts, not give our pants away.
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