Business Tax Association Releases Accountable Government Budget Review
Legislature Adheres to Less Than Half 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 the Iowa Legislature's Fiscal Year 2007 budget. 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 Legislature's FY07 budget adheres to less than half of ITA's sound budgeting principles.
"The Legislature failed to align revenues and expenditures within the same fiscal year," stated Iowa Taxpayers Association President Stacey Johnson. "The Legislature utilized a minimum of $160 million from the Fiscal Year 2006 ending fund balance to fund next year's expenditures."
"Spending occurring in a given fiscal year should be financed with revenue generated in that fiscal year. To finance a program that will not begin until a subsequent fiscal year creates another "built in" increase and does not constitute a sound budget," added Iowa Taxpayers Association Accountable Government Committee Chair Tom Wagner (CFO, Republic Companies - Davenport).
The Association's review also highlights a number of multi-year accelerating commitments. "In making these types of commitments, decisions are being made without knowing what the trade-offs will be in those future budget years. Multi-year accelerating commitments create more built-in increases and does not signify a sound budget," stated Wagner.
"The Legislature did take positive steps towards avoiding future diversions of funds statutorily authorized for a specific purpose with the creation of the Technology Reinvestment Fund (TRF)," stated Johnson. In previous years, a number of diversions from the Rebuild Iowa Infrastructure Fund were made for technology related projects. The TRF, comprised of general fund monies, was created to fund state technology needs. This is a positive step towards an accountable budget.
The Iowa Taxpayers Association will continue to encourage the Iowa Legislature to adhere to these sound 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.
# # #
