Letter to the Pilot

Tuesday, April 2, 2002

Rainy days in Iowa

There has been a lot of misinformation about the

budget and the so-called "rainy day fund" and I must

set the record straight.

The current fall in state revenues began in December 2000 and continues through today. In February 2001, the Legislature approved a budget reduction bill in order to deal with declining revenue. Governor Vilsack chose to ignore the warnings from the Legislature and vetoed the bill.

At the end of Fiscal Year 2001 (which ended June 30, 2001), the state ended with a deficit of $66 million. Vilsack was forced to shift $66 million from the Economic Emergency Fund (EEF), also known as the "rainy day fund," in order to cover the deficit. This was the first time EEF funds were used to cover a budget deficit...

Despite the fact that revenue began to decline in December 2000, the Governor agreed to a huge pay raise for state employees. The raise cost taxpayers $90 million in FY02 and $55 million in FY03. It is difficult for the Governor to claim that his number one priority is K-12 education when the largest increase in his budget is for state employees.

Due to his failure to deal with the downturn in revenue and his demands for additional spending, the Governor was left with no choice but to enact a 4.3 percent across the board cut in November 2001.

Fast forward to February of this year. The Legislature approved another budget reduction bill. This time, despite public denouncements of the bill, the Governor signed it. The bill contained an additional 1 percent budget cut for most agencies. However, the bill used $45 million from the EEF to hold K-12 harmless from the cut. Then in March, the Legislature approved the K-12 school aid bill, which used $25 million from the EEF and $20 million from the tobacco settlement to hold K-12 harmless from further cuts. In addition, the Legislature used $35.5 million from the Senior Living fund and over $100 million from the tobacco settlement, the most that can be taken from those funds.

The liberals in the Legislature, the special interest groups and several major newspapers say that we should "use the rainy day funds" to solve the budget problems. The fact is that we have already used $135 million from the EEF, leaving only $100 million in the "rainy day fund."

The fact of the matter is that the Republican Legislature has led the way on the balancing the budget...

Iowa Rep. Dave Millage