Iowa Faces Over $130 Million Budget Shortfall

dome

Members of Southeast Iowa’s legislative delegation spoke to local community and business leaders on Saturday about the $130 million budget shortfall that the Revenue Estimating Conference announced must be made between now and June 30.

State Senator Tom Greene (R-Burlington), State Representative Dennis Cohoon (D-Burlington), and State Representative David Kerr (R-Wapello) spoke at the monthly Eggs and Issues Breakfast sponsored by the Greater Burlington Partnership.

In January, the representatives projected an anticipated $110 million budget shortfall. Greene says that the incorrect estimate earlier in the year means that they “overspent and overpromised.”

“It’s not a revenue problem, it’s a spending problem,” he said. “You just can’t spend what you don’t have. It’s as simple as that.”

He added that the revenue is not growing as fast as the expenses are growing. As a result, he predicts that they will have to dip into the reserve fund. He anticipates that the upcoming fiscal year will be tighter until the revenue catches up.

Cohoon said he partially agreed with Greene. This is a spending problem, he said, but it is also a revenue problem.

“It’s wages being down,” he stated. “If we did have higher wages, we would have more income. We get our money off income taxes and sales taxes.”

He continued, saying that unemployment is very low, but the lack of income taxes demonstrates that workers are not earning enough.

Kerr says that they have four choices: cut programs, increase the revenue, dip into the reserve fund, or do a combination of the three.

Kerr concluded the discussion with a sentiment that Cohoon shared.

“When I first got into the legislature, we worked with republicans even though they were in the minority,” he said. “But Terry Brandstad was governor. We worked together on the budget. That doesn’t happen anymore.”