Two years ago, Iowa faced a $900 million budget shortfall. Today, we have an ending balance of $688 million and our budget reserves are full. To achieve this dramatic turnaround, we needed to make a fundamental change in legislative decision-making. In the past, state government spent every dollar possible, every year, including money we didn’t even have.
Now that the state’s fiscal house is back in order, we cannot return to the poor decisions of the past. The temptation to grow government as much as possible must be resisted.
As we begin moving budget bills through the House, we will remain committed to the core principles that led to our recent success: We will not spend more money than the state takes in, we will not use one-time money to pay for on-going expenses, and we will not intentionally underfund entitlement programs to balance the state’s budget.
The overall amount of revenue that is available to be spent in Fiscal Year 2014 is $7.1822 billion. This amount includes the $688.1 million in the ending balance that is an overpayment by Iowa taxpayers. The amount of ongoing revenue that is available is $6.5377 billion. The Fiscal Year 2014 proposal by House Republicans spends just $6.4139 billion. This represents a 3 percent increase over last year’s spending level and it protects priority services in the areas of education, health and human services and public safety.
Perhaps the most important figure is that the House Republican budget spends just 98 cents for every dollar of state revenue. This budget is balanced.
Also of note is that this budget proposal includes the funding necessary to maintain our commitment to education; including the funding necessary to allow the Regents universities to freeze tuition, $10 million increase to the community colleges, $1 million increase for Iowa Tuition Grant needs, and a two percent increase in supplemental state aid for our local schools.
While revenue growth is currently ahead of projections, there is a great deal of uncertainty about future revenue due to ongoing drought conditions, slow economic growth, and the federal sequestration.
These first pieces of the state budget are part of our unwavering commitment to fiscal responsibility and restraint. We will hold strong to our budgeting principles that will keep the state on solid ground and bring certainty to Iowa taxpayers and employers.