As Iowa reopens local communities, main street businesses and statewide industries, the Legislature heads back to session with responsible governance as the top priority. Our state’s health and economic comeback will be led by all of us, and we need a government responsive to our citizens.
Fiscal resilience: The Statehouse has a significant task when reconvening: craft the Iowa’s $8.24 billion budget and balance our finances.
Appropriation committees are diligently working details of funding for areas including COVID-19 relief, Medicaid, education and operating essential state agencies in an unprecedented economic environment.
Jeff Chapman, director of fiscal policy at the Pew Charitable Trust, assess: “Every state is going to have to make difficult decisions when it comes to cutting priority spending.” The impact could be felt in the 2021 and 2022 fiscal years.
But, there is reason to be optimistic, he states: Iowa is in a good spot when compared to other states because of its reserve accounts. “In the last several years, Iowa has been a real success story,” Chapman said, noting that several states had low rainy day balances during the Great Recession. “Iowa had greater savings than most states in the country.”
Smart fiscal planning is what helped earn Iowa’s fiscally responsibly reputation, and ensures Iowans keep more of what they make. This is the best way to invest in our local communities.
As families are tightening their belts at home, and business are working on razor-thin margins, the state of Iowa must support our communities’ economic rebound with a budget that incentivizes growth, not increases taxes on working Iowans.
Bailouts are not the answer: At the federal level, unfortunately, Congress passed another gargantuan $3 trillion bailout bill as a starting point for negotiations with Senate Republicans and the White House over the next round of coronavirus “relief” legislation. Much of this spending has nothing to do with fighting the virus but cherry-picks money for select constituencies. This only serves to outrage sensible Americans, when the nation faces unprecedented health and economic challenges.
Bailouts result in government agencies picking winners and losers. Congress would give tax-dollars to irresponsible state legislatures who have run up decades of debt, while casting aside Iowa’s principled approach to balancing our budget, investing in key priorities, and fully funding our “rainy day” reserves.
Moreover, 40% of low-income Americans have lost their jobs, entire industries are on the verge of collapse and tens of thousands of small-business owners are watching their nest eggs and dreams go up in smoke. Congressional hand-outs that do not enable an economic re-start only prolong the injury to hundreds of millions of Americans.
Perhaps the most egregious example is Congress’s expansion of the $600-per-week unemployment “bonuses” through the end of January 2021. According to Treasury Department analysis, the $600 weekly unemployment bonus on-top of existing state unemployment benefits, offers roughly the same or more money to unemployed workers than the average state wage.
Helping Americans in need is a responsibility of government, but using tax dollars to pay unemployment benefits at levels higher than wages prior to the pandemic is irresponsible and hampers Iowa and America’s national recovery. Bailouts go beyond economic stimulus. They are costly, nonsensical, and clearly politically motivated.
For Iowa, our budget priorities must quickly target relief to only those most in need while finding ways to safely reopen as much of the economy as possible.