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Legislative Update 05/29/2015

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Government exists to protect us from each other.  Where government has gone beyond its limits is in deciding to protect us from ourselves.  -- Ronald Regan

Legislative Update

Friends,
 
Senate Democrats have charged that House Republicans are more interested in protecting a balance sheet than protecting Iowans in need of services. In addition, we need to look at the overall health of our economy.  Just today I received revised data that shows that output for the US economy shrank 0.7% in the first quarter after initial reports tallied a 0.2% gain.  The revisions show that consumption expenditures were weaker, net exports were a bigger negative, and inventory buildup was slower. Real final sales (a key measure which strips out inventory adjustment and trade to focus purely on domestic demand) fell to -1.1%, the lowest print since March of 2009 when the economy was still in recession. Trade data also subtracted 1.9% from growth… the biggest drag from trade in nearly 20 years. Price data was little changed from initial reports. It’s notable too that the savings rate rose to 5.5% from 4.7%, continuing the trend of consumer frugality that punctuates an economy still struggle with debt deflation and deleveraging.
 
It is disappointing that Democrats continue to misunderstand the Legislature’s responsibility to Iowans.  This isn’t about a balance sheet.  It is about the money earned by hardworking Iowans and what we’ll do to protect the taxpayers and families who go to work, play by the rules and pay their taxes.  Those Iowans expect to be treated with respect.  That is why House Republicans will stand up and protect their money every day.  Every dollar the Legislature spends that it doesn’t have puts the financial security of those taxpayers and families in jeopardy.  Responsible budgeting ensures Iowa’s must vulnerable citizens have resources they can depend on next year and the year after. 
 
It is important to Iowans that the Legislature does not spend more than we have and live within our means.  While standing by this principle for the last five legislative sessions, Republicans have found common ground with the Governor and Senate Democrats.  We expect that to continue this year.  Living within our means is something the hardworking taxpayers of Iowa do every day.  Government needs to do the same.
 
As has been the case every legislative session since 2011, the holdup to adjournment is the spending appetite of Senate Democrats.  Every year they push to spend more than the state collects and every year House Republicans hold the line while providing workable solutions to spend within our means.
 
The House Republican budget plan spends 99.9% ($7.168 billion) of on-going revenue ($7.175 billion) ensuring that government does not spend more than it has and lives within its means.  This is a 2.48% (173.8 million) increase over FY 15.  The Senate Democrat plan spends 102.5% (7.341 billion) of on-going revenue.  That is a 4.73% ($347 million) increase over FY 15.
 
According to the non-partisan LSA, actual state revenue growth is 2.6%, not 6%.  In actual dollars, growth is $180.9 million, not $408.1 million.  According to LSA the $408.1 million figure cited by Democrats represents the growth between estimates not the growth between actual spending and the FY 2016 estimate.
 
The House Republican General Fund budget plan does not use the ending balance, the Cash Reserve or the Economic Emergency Fund.  According to the non-partisan Legislative Services Agency in regards to the ending balance, “It should be noted that these excess funds are considered one-time revenues that can carry-forward from one fiscal year to the next.  The transfer amounts can be unpredictable from one year to the next…  Reliance on these revenues for ongoing operational expenses of government programs can result in budget shortfalls if an economic downturn causes a drop in annual tax revenue.”
 
Iowans are sending $7.175 billion to state government coffers.  That is a tremendous amount of money. Spending more than they are sending to the state sets hardworking taxpayers up for either future budget cuts or a tax increase.  Instead of that, the Legislature should simply live within its means.
 
If there are legitimate one-time expenses – such as paying off state debt, or making targeted investments in key infrastructure projects, or improving water quality – then using one-time resources like the ending balance may be appropriate.  House Republicans voted to pay off state debt using ending balance dollars in 2013 and 2014.
 
Sincerely, 

Representative John H. Wills
 


Legislative Priorities 

2015-16 HOUSE REPUBLICAN BUDGET PRINCIPLES

House Republicans are committed to these principles to produce a balanced and sustainable state budget:

  1. We will spend less than the state collects;
  2. We will not use one-time money to fund on-going needs;
  3. We will not balance the budget by intentionally underfunding programs; and
  4. We will return unused tax dollars to Iowa’s taxpayers.
The House Republican position on government spending is reasonable, sustainable and based on simple common-sense budgeting principles.
 


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State Representative, John H. Wills
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