When the Revenue Estimating Conference (REC) met in March, most Iowans learned that the committee had lowered the revenue estimate for the next budget year.
The REC also issued a revised estimate for the current budget year, and some people are using those numbers to try and mislead Iowans into believing the state has more new revenue than it actually does.
I wrote in last week’s Fry Times, that on March 19, the Revenue Estimating Conference projected that the state’s general fund will take in $6.7674 billion through June 30, 2015. This was lower than their December 2014 estimate of $6.8571 billion, because of changes made this session in a bill aimed at matching Iowa’s tax with the federal tax code.
Some are claiming that the state is experiencing 6 percent revenue growth. If you were to follow their lead and take the difference between the projected revenue for FY 2015 (6.7674 billion) and the projected revenue FY 2016 ($7.1755 billion), you would find an increase of $408.1 million or 6 percent.
But there’s a small problem with this calculations — the FY 2016 budget will be built from the actual spending levels on programs in FY 2015, not the REC’s revenue projection for that year.
The actual amount of additional revenue that will be in Iowa’s budget next year is $180.9 million. This number comes from subtracting the actual spending in FY 2015 ($6.9946 billion) from the FY 2016 revenue estimate. That gives the state a 2.59 percent increase. For these reasons, we must be diligent and truthful with Iowans as we move through the budget negotiations.
We will continue to hold true to the following principles to produce a balanced and sustainable state budget:
1. We will spend less than the state collects
2.We will not use one-time money to fund on-going needs
3. We will not balance the budget by intentionally underfunding programs; and
4. We will return unused tax dollars to Iowa’s taxpayers.
I continue to get numerous emails weekly from hard working tax payers in House District 27 who ask me to stand firm and apply the budgeting principles that we all live by in our home with our own family budgets. The past five years have shown sound fiscal management of the state of Iowa’s budget, and we will continue to do so again this year!