Iowans have learned quite a bit about our economy and the state’s budget in the last few weeks. On a national level, a debate rages on concerning the future of health care, a new national energy tax and the possible passage of another massive spending package. Closer to home, Iowans are talking about the state’s unbalanced budgets, out-of-control spending, the poor job climate as a result of high taxes and burdensome regulations and increasing unemployment.

Last Wednesday, the state started a new fiscal year which means Governor Culver and legislative Democrats’ $6.3 billion dollar budget, the largest budget in the history of the state, took effect. Yet, the more immediate concern is the state’s old budget that concluded on June 30. The nonpartisan and highly reputable Legislative Services Agency (LSA) found that Governor Culver and legislative Democrats left a deficit of $161 million dollars. Since the Iowa Constitution requires the state to have a balanced budget, that deficit cannot be ignored. While the governor has the authority to dip into the state’s savings to pay some of the bills, his transfer authority does not extend far enough to pay off the entire deficit. As a result, legislators could be headed back to Des Moines for a special session.

Unfortunately, the state’s new budget, which started July 1, also faces substantial deficits. For the past three years, Senate and House Republicans, Auditor Dave Vaudt and many independent expert economists have been warning the governor and his Democrat allies in the Legislature about the dangers of overspending. The governor and legislative Democrats chose to ignore those warnings and instead opted to increase spending and then put $1.7 billion on the state’s credit card. Now, the LSA predicts that at a minimum, the state will be facing over a $900 million dollar deficit by next spring and that number could easily grow to exceed $1 billion dollars if the economy does not begin to pick up steam.

While Governor Culver continues to be in denial about the fiscal condition of the state, I believe bold and decisive action must be taken soon. Senate and House Republicans have offered hundreds of millions in smart cost savings, yet each and everyone of those budget cutting solutions were rejected.

Instead, Democrats continued to build a bigger budget and expanded the size and scope of state government without passing any meaningful legislation that would ease the tax and regulatory burdens for small businesses and employers who create two out of every three new private sector jobs in Iowa. I also offered an aggressive package of pro-growth initiatives aimed at immediately providing a shot of adrenaline to Iowa’s economy to get more Iowans back into sustainable private sector jobs. However, without control of the Legislature, those aggressive private sector job creation initiatives were blocked.

Though many Iowa families, businesses and employers are making difficult decisions, enduring layoffs, cutbacks, furloughs and pay cuts, many government paid bureaucrats are actually getting wage and benefit increases this year - in some cases up to 9 percent. How many employers in the private sector are able to offer those kinds of increases to their employees during these challenging economic times? It has been reported that state employees would be getting a pay freeze this year. Only in government is a pay freeze actually a pay increase. It’s clear that government is out-of-touch and out-of-control.

To make things even more difficult for all Iowans and especially many in eastern Iowa that were affected by the natural disasters and flooding of 2008, legislative Democrats decided not to “couple” the state’s tax code with the federal tax code, which is something that has been done every other year. Many families and individuals filed their taxes on the assumption that the state would do as it always does by coupling with the federal tax code. Many Iowans are just now finding out that they are likely going to have to pay the state back because they are not permitted to take their usual deductions this year. This tax increase means that Iowa taxpayers will be forced to pay the state about $56 million dollars this year and another $63 million dollars next year. The Democrats have said they needed that extra money for the state’s bloated budget but they sure are not giving much consideration to your family’s budget.

The economy and the fiscal future of our state is on everyone’s mind and Iowa families and employers are looking for bold leaders who offer clarity, vision and fresh ideas. Senate Republicans have been tirelessly working to earn the trust of all Iowans by providing real solutions to the issues facing every Iowan and offering a new outlook that will grow Iowa and empower individuals to be able to achieve their maximum potential. It’s no secret that when our communities have successful individuals and families ˆ we also know that means we will have successful schools and churches, thriving businesses and employers and a greater sense of community because there will also be strong civic and charitable groups making a difference in the lives of others.

This past weekend, Americans celebrated the 233rd birthday of our nation. While many celebrated with backyard barbeques, trips to the local park and community fireworks shows, we also remember the sacrifices made by so many. It is because of their sacrifices that we can enjoy the freedoms, liberties and opportunities afforded to us today. Plenty of potential exists to make our state a beacon of opportunity that is recognized worldwide but it is going to take a real change in direction and a re-focus of our priorities. We must prepare our state to actively compete in the global economy and give our citizens back their government. Iowans deserve a vibrant economy that creates good jobs and a government that stays within its means, is limited and efficient. With our clear vision, Senate Republicans will work hard to attain those goals and thereby ensure that our best days are yet ahead.



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