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The Paulsen Perspective: Protecting Iowans’ Tax Dollars

Another week has passed here at the capitol and we’re making significant progress on key pieces of legislation.  The education reform bill made its way through the committee process this week, so we will likely see it on the floor next week.

Additionally, we debated on the floor and sent to the Senate, a bill to fund the mental health transition fund.  If you recall, last year the Legislature made great strides to redesign the state’s mental health services in a bipartisan manner.  Part of our redesign was the creation of the transition fund, to help counties provide non-Medicaid funded services through the transition period.  The Department of Human Services recommended $11.6 million to fund the counties’ transition – we passed that bill and sent it to the Senate for their consideration on Wednesday.

There was also progress made on a measure designed to protect Iowans’ tax dollars.  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.  This is a fundamental change in legislative decision making, driven by Iowans.  This is a significant departure from how government operated in the past where every dollar was spent, even some we didn’t have.

House Republicans have instilled a fundamental culture change and we will not retreat now. As we develop our budget targets, we remain committed to the principles used to get our fiscal house in order:

  • We will not spend more money than the state takes in;
  • We will not use one-time money to pay for on-going expenses;
  • We will not intentionally underfund entitlement programs to balance the state’s budget;
  • We will return unused tax dollars to Iowa’s taxpayers.

Our current 99 percent expenditure limitation law has served us well.  However, this law allows the Legislature and the governor to spend more than the state collects.

To that end, House Republicans have proposed House Joint Resolution 2 which is a proposal to amend the state’s Constitution in the following ways:

  • Limit the size of the annual state budget to 99 percent of ongoing revenue and send any ending balance to the Taxpayers Trust Fund, where it can be returned to Iowans.
  • Require that any bonding receive two-thirds approval of both chambers of the Legislature.
  •  Require the Legislature approve any tax increase by a 60 percent vote of each chamber.

This legislation will make it more difficult for the Legislature to raise taxes, spend the state into debt, or spend more money than the state takes in.

The bill cleared a subcommittee panel this week and is eligible to be considered by the full Appropriations committee.


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