On the opening day of the 2017 legislative session I supported and co-sponsored four bills along with 28 Senate Republican colleagues. These are the only four bills that I sponsored this year. One of the first four bills Senate Republicans offered in January focused on fiscal responsibility.Iowans expect their elected officials to be responsible with their tax dollars. This is why Senate Republicans introduced a bill on a topic we have discussed for many years.
When it comes to budgeting, Senate Republicans believe we should treat the state budget like the family budget. This means we should not and cannot spend more than we take in on an annual basis. Under Iowa law, the legislature is given a directive to spend no more than 99 percent of anticipated revenues for the next fiscal year. That being said, the current law allows the Legislature to spend not only 99 percent of ongoing revenues, but also 100 percent of any surplus.
In addition, since it’s not in the Constitution, the Iowa law can be side-stepped and not followed. Several times in recent years, this is exactly what happened. Over the last four fiscal years, the state spent more money than we received. This resulted in depleting a $927 million surplus and going into the red by over $100 million.
The bill filed by Senate Republicans clamps down on the 99 percent expenditure limitation by removing the ability to count the surplus toward the expenditure limitation, removes the ability to sidestep Iowa law and spend above the 99 percent expenditure limitation by putting the law into our state constitution. It further clamps down on spending by specifying the Legislature can either spend 99 percent of current ongoing revenues or 104 percent of the previous year’s revenues, whichever is less. One of the reasons for the law is to keep Iowa on solid financial ground while providing both taxpayers and those entities receiving tax dollars the confidence that the state will meet it financial commitments. This law is important to our financial future that Senate Republicans want to put the 99 percent expenditure limitation into the Iowa Constitution.
In making our vision a reality, this legislation is required to be passed in two General Assemblies and then receive a majority of votes of the people in a general election. This is important because predictability and sustainability of state finances are vital. If we deviate from the 99 percent spending limitation, keeping financial commitments could prove challenging when state revenues fall short of expectations. This situation is not fodder or rhetoric; it is real.
Going into this legislative session, one of the first orders of business was working to find a solution on how to reduce more than $100 million from the current year budget because revenues did not meet expectations.
Not only is financial responsibility important for families in their everyday lives, the same can be said for of our entrepreneurs and job creators. Reckless spending on their behalf could result in a failure to meet financial obligations such as investing in employees, infrastructure and creating new jobs.
Senate Republican upcoming priorities are controlling state spending, reforming the tax code, and creating an economic environment favorable to job creation and higher wages. The State of Iowa is not any different. Passing a constitutional amendment to place the 99 percent expenditure limitation into the state constitution is advantageous for Iowa.