Pella Chronicle

August 13, 2009

McKinley’s Memos

Paul McKinley - Senate Republican Leader

For lots of Iowans, August is an important month. Often, it is the month were many families and students are beginning to get ready for the start of classes and extra-curricular activities at our schools, colleges or universities. This is also the month where families may get away, perhaps somewhere closer to home in Iowa this year, for a quick vacation. It’s a time when hundreds of thousands of Iowans descend on Des Moines for a unique tradition unlike any other: the Iowa State Fair.

Yet, this year it is important because of the major policy discussions happening all over our country. Unlike some years, much of the August political attention this year is focused on the debate unfolding in Congress about the future of health care in America. Many Iowans are concerned about the risky and expensive health care experiment being pushed in Washington that would hand as much as one sixth of the country’s economy over to the government and they are worried about plans under consideration for a national energy tax.

However, there is important news about Iowa’s state government and budget too. After a 21 percent increase in spending the first two years of his term, Governor Culver and legislative Democrats this year continued on their spending spree which ended with a $6.3 billion dollar budget ˆ the largest in state history. Furthermore, they forced through a very unpopular temporary government make-work program paid for by putting over $1 billion dollars on the state’s credit card. The plan does not create any sustainable permanent jobs but babies born this year will be nearly 30 years old before this debt is paid off.

For the last three years, Iowa has not experienced a significant revenue problem - but we have witnessed a severe spending problem. While revenues to the state are coming in at levels slightly less than last year, they remain close to all-time record levels. Had the governor and legislative Democrats kept spending under control, Iowa would not be faced with unsustainable and unbalanced budgets and soaring deficits that could top a billion dollars.

Earlier this week, the non-partisan Legislative Services Agency (LSA) released a new report showing Iowa’s receipts for the month of July are down six percent over a year ago ˆ a number that amounts to roughly $23 million dollars. LSA showed personal income tax collections are down 6.1% over last July and corporate income tax revenues dropped by 42.1%. The report also shows a $40 million increase in sales tax collections to the state, but this is simply the result of the final implementation of the state takeover of the penny sales tax for school infrastructure. Those tax dollars come into the state and every dollar is immediately refunded to the school infrastructure account. Those dollars are not net new dollars to the state government available for state general fund expenditures.

Even though the LSA numbers accurately reported a slight dip in revenue to the state, Governor Culver, using his own budgeting tactics, proclaimed that revenues to the state actually increased by $4.7 million dollars. Unfortunately, Governor Culver included the school infrastructure money that cannot be spent for general fund purposes in his calculations and therefore is misleading the taxpayers of Iowa about the true fiscal picture of the state. With record deficits looming as a result of unbridled spending, Iowans need to be presented with all the facts ˆ not more partisan spin - so they can make informed decisions about which direction their elected officials should proceed.

To get Iowa’s economy moving in the right direction, Senate Republicans have offered and proposed bold solutions that will make our state more competitive, more friendly to creating jobs and allow Iowans to keep more of their hard earned money. Iowans expert a straightforward and transparent government that reflects the wishes of the people it is supposed to represent.

As the summer begins to wind down, as students and teachers head back to school, as families take a few days to get away on a vacation or head to the state fair, we are again reminded how lucky we are to live in Iowa where people are hardworking and independent and our towns and cities value that core Midwestern sense of community that makes our state so unique. Amidst some of the challenging economic times facing this state, there is a great reason to be optimistic about the future.

I understand that when optimism about the future exists, opportunity abounds. Let us not squander this opportunity to give Iowans more of a voice in government, keep government living within its means and enact real common sense solutions that help individuals, families and communities realize their dreams right here in Iowa.

As always, I welcome hearing from you and can be reached by phone at 515-281-3560 or by e-mail at paul.mckinley@legis.state.ia.us