Business Tax Association Releases Accountable Government Budget Review
Governor Adheres to Less Than 1/2 of Association's Sound Budgeting Principles
The Iowa Taxpayers Association (ITA), the state's leading nonpartisan business tax policy advocacy organization founded in 1935, has released its review of Governor Vilsack's Fiscal Year 2007 budget recommendations. The review highlights the more significant deviations and convergences from the group's established sound budgeting principles. To view the complete report, simply click here.
The Governor's FY07 budget adheres to less than half of ITA's sound budgeting principles.
"The Governor continues to rely on time-limited revenue sources, including the Senior Living Trust Fund which is expected to be depleted in the near future, to fund on-going expenses such as Medicaid," stated Iowa Taxpayers Association President Stacey Johnson.
"As those types of funds are depleted, a large gap in the budget, estimated to be $200 - $300 million, will be present and a new revenue source will need to be identified to fund those ongoing program commitments. In looking to the future, this poses serious concerns on how this possible revenue shortage will be handled," added Iowa Taxpayers Association Accountable Government Committee Chair Tom Wagner (CFO, Republic Companies - Davenport).
The Association noted one area of promise to rectify this recurring deviation in the Governor's new budgeting process, "Budgeting for Results." The theory is to start with all revenues currently available and expend those resources only on the expenditures that achieve the most value and the ultimate goal identified by the State. Rather than building upon the current base budget, the Governor has attempted to align available revenues to those identified expenses in the same fiscal year. "As a practice, this is a good first step towards aligning revenue and expenses within the same fiscal year," stated Wagner.
"The Iowa Taxpayers Association does recognize the difficult economic conditions under which the Legislature has operated in recent years, and the efforts made to continue government services at a reasonable level while not imposing additional tax burdens on Iowans. However, the ITA similarly recognizes the need to maintain a consistency in its evaluations of the accounting practices of the Legislature, emphasizing the need to adhere to these budgeting principles in order to ensure a sound economic basis for years to come," stated Johnson. "This report is disappointing in the respect that five of the seven principles evaluated were violated. We will continue to encourage the Governor and the Iowa Legislature to adhere to these budgeting principles."
In 2001, Iowa Taxpayers Association developed a Committee on Accountable Government. The work of this group complements and reinforces the goals of the Accountable Government Act passed in 2001. By focusing on what Iowa Taxpayers Association believes are sound budgeting and financial practices, the Office of the Governor and members of the General Assembly are offered tools by this Committee through which they can provide more accountability in the practice of government.
The purpose of these reviews is not to provide subjective judgment or declaratory comment on the merits of individual State programs. The hope is to complement the standards set forth in the Accountable Government Act of 2001.
