The state is facing a $117 million shortfall in revenues to maintain the spending levels approved by the 2016 Legislature. To fix this problem, the 2017 Legislature needs to reduce spending levels so they do not exceed revenue.
The state cannot spend money it does not have. When the Legislature adjourned in April, total spending was less than available revenue. Since then revenue has dropped creating the need to reduce costs to maintain a balanced budget and prevent a tax increase.
FY 2017 is the fourth consecutive year where actual revenue to the state will not meet the official forecast from the Revenue Estimating Conference. The House will be looking for ways to help improve the accuracy of the REC’s revenue projections in the future.
The FY17 Deappropriations bill conforms with our Budget Principles. The $25.2 million in non-recurring or one-time money is only used once and does not go to on-going expenses. This amount - $25.2 million – is reduced from the funds available for use in FY18. This eliminates the revenue from being built into the FY18 budget and keeps it as non-recurring revenue.
Within the bill, the House has given state agencies flexibility to implement the cuts in the best way possible for their agency. This will help agencies to avoid program disruptions that impact the public.
While the bill includes reduction to state universities, the amount in the bill is less than the amount in the Governor’s proposal. The president of the Board of Regents has told the media that this reduction will not result in a tuition increase.
As Iowa’s welfare reform caseload continues to decline, spending on the Family Investment Program has also declined. This allowed the state to use federal funding on other programs, which reduces the reductions to other DHS programs.
The House looked at the possibility at reducing the fiscal impact of tax credits to the budget. The non-partisan Legislative Services Agency said that any changes to tax credits would have little to no positive fiscal impact to the FY 2017 budget.
As always, please join me at one of my legislative forums in February:
February 3rd @ 8:00 – Corydon – Farm Bureau
February 3rd @ 10:00 – Chariton – Mosaic
February 3rd @ 12:00 – Osceola – Lakeside Casino
February 3rd @ 2:00 – Leon – Community Center