Mixed Reviews on State Budget

On the one hand, the state ranks high in “fiscal strength.” On the other hand, the state continues to collect less each year in taxes.  

Talking about the state budget is never easy.  Let’s start with the “fiscal year.”  States do not budget on a calendar year, like many of us do with our home or business budgets.  Iowa’s “fiscal year” starts on July 1 and ends the following year on June 30. 

Secondly, Iowa law forces lawmakers to save for a “rainy day” (in case you haven’t noticed, it’s been raining lately).  Unlike many states, lawmakers in Iowa can only spend 99% of what they think they’ll have at the end of the year.  The rest gets put into an “economic emergency fund” for a rainy day

But the key to all this is “what they think they will have.”  If you work for an hourly wage, you probably can guess about how much you’ll make in a year, but you never know for certain until you get that final paycheck.  It’s the same with the state. 

We never know how much we’ll collect in taxes each year, we can only guess.  Yet, we’re required by law to have a budget ready to go far before we know how much money will be in the bank.

That’s where the Revenue Estimating Conference comes in. This three-member group of economists and budget experts looks at how much is collected each month, compares it to prior years, and makes an educated guess on how much money will be collected in that fiscal year.  They are usually pretty close, but when they aren’t, it often leads to mid-year across the board cuts (after all, we have to balance our budget).

The “Good News” - Iowa ended its fiscal year on June 30, and it looks like we came out ahead of the game (kind of).  The good news is Iowa finished out its fiscal year with an extra $275 million left in the bank.  That is $175 million more than they expected after the last revenue estimates.  These funds will go back into our savings accounts, for use in balancing future budgets.

While this is good news, and we are doing better than expected, we’re still not doing well.  Iowa ended up collecting more money this year, but it’s still less than the year before.  Our revenues continue to drop, just not as much as we expected. 

It’s like if you made $15,000 last year, but you were told your hours were being cut back and you’d only make $10,000 this year. Then you get a chance to work overtime, and end up making $12,000.  It’s still less money than the year before, just more than you expected.

The “Bad News” - Iowans paid $5.5 billion in state taxes last year.  This is 4.1% less than we collected the year before and is the lowest amount collected in four years.  Jeff Robinson, an analyst for the Legislative Services Agency, said this continued drop in revenues shows Iowa isn’t out of the woods yet.

Iowa collected $5.504 billion in taxes in the last year.  That’s not great news when you compare it to the amounts collected in 2009 ($5.739 billion), 2008 ($6.059 billion), and 2007 ($5.548 billion).  The biggest drop was in personal taxes, which were down $94.8 billion, in large part because of people losing their jobs.

“We’re not on a positive trend, we’re just on a better trend,” said Robinson.  “It is hard to believe that its this bad, but other states are worse.  While Iowa is still not out of the recessionary woods, we’re in a better part of the woods.”

Iowa Ranks High in Fiscal Strength - Iowa has the nation’s second lowest state debt per person, according to a report recently released by Moody’s Investors Service.

Nationally, states borrowed about $936/person, with many state budgets balanced using loans.  Iowa’s per-person debt is only $73 (our neighbor Nebraska beat us with a $15/person).  In contrast, Connecticut had the highest per person debt in the nation, at $4,859/person.

This is important, because someday, states have to pay off their debt and they can only do that if economies get better, or they raise more money some other way (like through taxes). 

Another study (by the Pew Center on the States) ranked states’ fiscal strength.  While Wyoming came out on top, Iowa and Nebraska tied for second place and were highlighted as states with strong financial practices that are in good position for economic recovery.

So, while it seems like times are tough, the grass is definitely not greener in other states.

State Gets Federal "OK" to Cut Special Education Funds

It is no secret state funding for education has been scaled back, and local school districts are making tough decisions about funding.  Teachers are being laid off, and programs cut. 

The Iowa Department of Education recently received approval from the Federal government to reduce its state support for special education.

Under the IDEA, waivers can be given out for exceptional or uncontrollable circumstances (such as a natural disaster or an unforeseen decline in state financial resources).  Iowa’s state revenues have been going down for four years in a row, with nearly a billion less in resources available to spend on public programs.

It is likely that more states will request waivers to cut special education funding, especially as they struggle to recover from the economic crisis.  These waivers are only granted for one fiscal year, and states are required to return funding to pre-waiver levels. 

For more information on this, go to: legalclips.nsba.org/?p=619 or www.iffcmh.org. 

Federal Medicaid Funding Falls Short

The national economic crisis hit states hard.   States started collecting less in taxes, but demand for state services started expanding as people lost their jobs.  States were having trouble making ends meet, so the Federal government stepped in last year to help them out.

One of the ways Congress helped out was by giving states more money for Medicaid services (called the Medicaid match).  This meant that states would get more federal money for each state dollar spent on Medicaid.  This helped take pressure off states that had less money to spend, but more demand for public services like Medicaid.

The problem is, this increased Medicaid match was going to end this year, leaving Iowa with $116 million less to pay for Medicaid services.  State legislators decided to pass a budget this year that assumed Congress would keep the increased match for another year.  At the time, most members of Congress promised to do that.

As is common in Washington DC, things got really political.  Federal health care reform passed, with a big price tag attached to it.  The Federal deficit continued to grow.  The elections were getting closer.  Suddenly, Congress was divided on whether to keep “bailing out the states.”

Last week, after months of uncertainty, Congress passed and the President signed a $26 billion state assistance package that included, among other things, continuation of the increased Medicaid match.  The measure gives states $16 billion to help cover their Medicaid budgets, of which $83.1 million would come to Iowa. 

Yes, you read that right.  The Congressional package will send $83.1 million to Iowa to pay for Medicaid services, but the Iowa Legislature banked on getting $116 million.   That means Iowa will be short at least $32.9 million to pay for Medicaid services next year.  

The state has choices in how to deal with this $32.9 million gap.  Lawmakers could come back into session in January and pass a supplemental appropriation bill that would give Medicaid the extra money needed.  But the state isn’t exactly flush with cash these days.  Or, services and programs paid for by Medicaid could be cut back, increasing waiting lists or cutting eligibility. 

The Iowa Department of Human Services (DHS) announced last week that it had not yet made plans to deal with a Medicaid shortfall.  “Truth be told, it’s a big deal that Congress has taken a step toward providing about two-thirds of the amount that the Iowa Legislature budgeted,” said DHS spokesperson Roger Munns. 

The remaining $10 billion of the state assistance package will be used to help states keep jobs for teachers, police officers, firefighters, and other public safety staff.  Iowa school districts will get about $96 million of this extra money for teacher and school employee salaries (saving about 1,500 school jobs in Iowa).

The entire $26 billion state assistance package pays for itself by increasing taxes on businesses with overseas operations and cutting spending on programs like Food Stamps. 

Campaign News

Third Party Candidate Deadline Passes - Friday, August 13 was another important deadline in the 2010 election.  Anyone wanting to run for office as a third party candidate (that is, running as something other than a Republican or Democrat) needed to file papers by the end of the day on Friday.  Here are the names of candidates to date (we printed this before the deadline). See the complete list of 2010 candidates here.

Socialist Workers Party Candidates:

• David Rosenfeld & Helen Meyers (Governor/Lt. Governor)
• Rebecca Williamson (3^rd Congressional District)
• Jason Faulkner (1^st Congressional District)

Libertarian Party:

• Eric Cooper/Nick Weltha (Governor/Lt. Governor)
• John Heiderscheit (US Senator)
• Rob Petsche (1^st Congressional District)
• Jack Porter (Secretary of State)

Constitution Party:

• Jon Tack (2^nd Congressional District) 

Culver-Branstad Debates Scheduled - Governor Chet Culver and former Governor Terry Branstad announced that they have agreed to three debates this fall – in Sioux City, Cedar Rapids, and Des Moines.  All will be televised and you can usually read what they said on the sponsoring newspaper’s website.  Here are the details

Thursday, October 7 (7 p.m.) in Cedar Rapids
Hosted by the Cedar Rapids Gazette/KCRG-TV 9

Thursday, October 21 (Noon) in Johnston @ IPTV
Hosted by the Des Moines Register/Iowa Public Television

Date/Time TBA in Sioux City
Hosted by Lee Enterprises/KCAU-TV/WQAD-TV

Both campaigns are expected to schedule one additional debate, between the candidates for Lt. Governor (current Lt. Governor Patty Judge and State Senator/Candidate for Lt. Governor Kim Reynolds).  Watch the ID Action/infoNET website or friend us on Facebook for additional updates.

Time Flies – Has It Been Ten Years? - The redrawing of congressional, legislative, and local elected districts is done every 10 years, after new census information becomes available. Because the 2010 census is done, Iowa has started the process of redrawing these very important lines.

Iowa's redistricting process is known nationally for its nonpartisan and fair approach, one that truly takes the politics out of the equation.  This is not so in many states, where commissions lead by politicians redraw the borders with political self-interest in mind (they keep a ‘good’ district and throw people they don’t like into ‘bad’ districts).  The courts often weigh in and determine if borders were drawn without regard to politics.  Sometimes these court battles drag on for many years.

Iowa instead turns to the nonpartisan Legislative Services Agency (LSA) to draft maps with the new district lines. The LSA has already started to prepare the first redistricting map and must give it to lawmakers by April 1, 2011. 

The only information drafters are allowed to consider in redrawing the map is population data.  From this data, they will try to make the new districts as equal in population and as compact as possible.  No other data or information can be considered, including information about voter registration, election results, or legislator addresses.

Because drafters will not have access to legislator addresses during the redrawing, they won’t know which lawmakers are in each district until the map is drawn. Because Iowa will likely lose a congressional seat, two of the five current Congressmen will be put into the same district.

Once a map is drawn, the Iowa Legislature will vote yes or no (they cannot change or amend the map in any way). If the Legislature votes against the first draft, they get a second draft (that also cannot be amended. If the second map is turned down, the LSA drafts a third map that can be amended. This entire process will take place in the 2011 legislative session.

So while we won’t have much money to spend in 2011, you will see a lot of time devoted to studying these maps and determining who has the political advantage in the 2012 election.

ID Action Advocacy Opportunities

You’ve heard it here before.  The squeaky wheel gets the grease.  The squeakier, the better, especially in an election year when your elected officials are out there asking for your vote. 

Now is the time to find out where the candidates running for office in your area stand on the issues you care about, and let them know why those issues are important to you. 

ID Action has always spent a great deal of time and resources on its Vote and Election activities.  It is important for persons of all abilities to be heard this election year.  It is important for people of all abilities to not only sit up and take notice, but also stand up and take action. 

That is why ID Action has put together a number of resources to help you get more involved locally, cast an informed vote, advocate for the issues important to you and your community, and ultimately, put your elected official’s feet to the fire.

Back By Popular Demand: ID Action Voter Trainings - In 2008, more than 1500 ID Action registrants attended voter trainings that featured hands-on practice with new voting machines and opportunities to talk one-on-one with the candidates.  These workshops were very popular – so we’re doing them again!

ID Action is looking for organizational partners to host this year’s Voter Workshops.  The workshops will help you understand the voting process using interactive formats.  The goal is to help Iowans of all abilities get more comfortable with voting, help them understand their rights as voters, and understand the importance of showing up on Election Day. 

If you are interested in hosting a Voter Workshop, call 1-866-432-2846 or email us at contactus@idaction.org. Call/email soon – time is running out and our dates are available on a first come, first serve basis.

VOTE Resources - ID Action has put together an online election toolkit that first time and veteran voters alike will find useful.  You’ll find lists of the candidates on the ballot and information about registering to vote, getting an absentee ballot, contacting candidates, and more.  There are links to candidate websites, as well as ways to find out more about the judges up for retention this year.  So take a few minutes and find out what is there – and check back because we’ll be adding more.

• Click here for our ELECTION TOOLKIT.
• Click here for VOTER TOOLKIT.

Town Hall Meetings & Public Forums  - Congress is in recess during the month of August, but don’t call it a vacation!  August is the month when many of our US Senators and US Representatives travel around the state to talk to the people they represent, usually in town hall meetings or forums.

At the same time, town hall meetings and public forums are no longer session-only activities for state legislators.  Many state legislators are seeing the year-round value of these open meetings with constituents.

We do not get much notice when these meetings are announced, but you can find the updated schedules here.

Listen to Candidates at the State Fair -  It’s Iowa State Fair time, and many candidates for public office have stepped up to the plate to speak at this year’s open-air political forum, called the Candidate Soapbox.  During the eleven days of the State Fair, fourteen candidates will have 20 minutes each to talk about any topic they want.  Stop by and listen to what they have to say!

You can find the soapbox at the Des Moines Register Service Center on the Grand Concourse.  See full Des Moines Register political soapbox line-up at: here.

Join Us at the Iowa State Fair for Building Bridges Day - The 15^th Annual Building Bridges Day at the Iowa State Fair is Friday, August 20. Building Bridges Day is a special day promoting unity and understanding between fairgoers and Iowans with disabilities. ID Action staff will be available to answer questions and talk to you about ID Action.  And be sure to get there early to pick up your Branstad/Culver face fans!

Congrats to our Survey Drawing Winners!Thanks to everyone who took the time to fill out our 2010 Reader Survey – we learned a lot from your comments! 

Advocating Change Campaign Grants Still Available - There is still time to apply for an Advocating for Change Campaign grant. If you have a disability-related issue that you want to change in your city, county, or even statewide, this is your chance to be heard. Grants are being offered to help with expenses up to $2000 for anyone interested in putting together a team to develop a campaign for change.  The grant application and guidelines are available on our website at www.idaction.org or you can call 1-866-432-2846 and request both documents be mailed to you.

Advocating Change Day is back!  Plan to join us at the State Capitol for a day of advocacy on Wednesday, March 30, 2011.

Congratulations to Our Survey Drawing Winners!  Congrats to three of you who won a $25 gift card in our reader survey drawing:

• Mitzi Cellan of Creston
• LouAnn Gordan of Ogden
• Frederick Fletcher of Holstein

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