By Rep. Steve Olson
Special to the Herald
April 27, 2009 09:40 am
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As the legislature draws to a conclusion, issues seem to gain in importance and partisan politics seems to jump out of the woodwork. To give you an example, the minority party has proposed $200 million in revenue savings, these proposals were made to help reduce drastic cuts in people programs. For some unknown reason, except that the minority party made these proposals, they have been rejected by the majority party on the floor. Following are a few of the budget saving proposals that I voted for, but were defeated on the floor of the House:
n Prohibit the purchase of new state cars for one year, for a savings of $11 million,
n Eliminate filling “phantom employees” vacancies, for a savings of $25 million,
n Cut office supply purchasing by 50 percent, for a savings of $10 million,
n Reduce Regents library acquisitions by 50 percent, for a savings of $12 million,
n State employees would pay a portion of their health insurance costs, for a savings of $17.8 million,
n Board of Regents employees would pay a portion of their health insurance costs, for a savings of $14.3 million, and
n Delay DNR land acquisition for one-year, for a savings of $5 million.
One of the difficulties in the budgeting process is the timeline that we must follow in Iowa. The legislature tries to follow a calendar of 110 days for the first session, the reason for the timeline is because we are a part-time legislature and to control legislative expenses. Unfortunately, this year the process has been delayed because of the declining state income and some doubts about the federal stimulus package. Just last week Gov. Culver announced that the amount of direct aid to Iowa is approximately $2.5 billion, versus the previous number of $1.9 billion. I continue to receive calls from constituents on how their agency can apply for the stimulus money and what the rules are on the use of federal money. At this time, the best way is by contacting the governor’s office.
The question facing legislators and Iowans today is the bonding proposal and what this state needs. Last Thursday when the House had completed its work for the week, the Appropriations Committee considered the three bonding proposals that are waiting to be debated by the House. Each of the bills has a different purpose and they each make the taxpayers responsible for 20 years of payments to the bondholders.
The first bonding bill, SF 376, would have the state sell $201 million in bonds in order to provide $175 million of projects. Many of the projects in this bill are related to the state’s corrections system. The Legislature tried to fund these last year by selling bonds backed by the state’s tobacco settlement. The public was not interested in buying these bonds, so it was back to the drawing board to fund these projects. The bill also includes funding for programs like the Community Attractions and Tourism program (CAT) and Accelerated Career Education (ACE).
While this bill right now has $175 million worth of projects, rumor at the Capitol is it is being changed to include an additional $300 million for other projects. This money would go for the Governor’s I-JOBS idea, rebuilding flood damaged areas in Linn County and alternative energy projects.
Another bill, SF 474, would raise $100 million for the Board of Regents. These funds would be used to pay for the state’s share of flood repair costs at the University of Iowa.
The final bonding bill, SF 477 is a big mystery. All it currently says is that the Legislature intends to issue bonds for infrastructure projects. Again, the rumor is this bill will ask for $125 million in bonds to pay for unidentified infrastructure projects and expanding broadband access.
I have nothing against all of these designated important projects. Most of them are worthwhile, but I hesitate to support doing them all at once, and especially bonding for them. I have several reasons why I cannot support this proposal.
First of all is the cost. What would these three bills cost us as taxpayers? The $100 million for University of Iowa would cost us $217 million over the next 20 years. And the $175 million for the prison projects would cost us $316 million. For borrowing $275 million, Iowa taxpayers will pay an additional $258 million in interest and fees.
My second concern is the fact that this proposal is being created behind closed doors. The governor and legislative Democrats can talk about bi-partisanship and consensus on this idea, but no Republican senator or representative has been invited to the table. Five representatives and five senators, all of the majority party, sat down and determined the projects the bonds would support. So much for transparency in government.
Another concern is the issues brought by our state auditor and treasurer. State Auditor David Vaudt has raised a number of issues with this proposal. Treasurer Michael Fitzgerald — the person responsible for selling the bonds — has said he has not been participating in the meetings on the bonds. If the people responsible for these bills aren’t part of the process, how do we know this will work?
I have had constituents contact me about increasing the annual cap on historic tax credit. On Monday, the House overwhelming passed SF 481. This bill increases the annual cap on historic tax credit from $20 million to $50 million. Hopefully, this will be helpful for historic preservation projects in the area.
Republican Steve Olson of DeWitt serves in the Iowa House of Representatives.
He represents House District 83, which covers portions of Clinton and Scott counties.
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