Cutting spending from the current-year budget as well as from the budget for fiscal year 2012 will be statehouse Republicans' top priority, incoming Iowa House Speaker Kraig Paulsen told journalists yesterday. Paulsen said Republicans will seek to reduce fiscal year 2011 spending by "hundreds of millions" of dollars.
Mid-year spending cuts would make sense if Iowa faced revenue shortfalls, like the declines that prompted Governor Chet Culver's across the board budget cut in October 2009. However, state revenues have been coming in ahead of projections since fiscal year 2011 began, and the 2011 budget was balanced when Democratic legislators approved it in March. The Revenue Estimating Conference will meet again in December. If their projections show that Iowa's finances are on solid ground, with revenues still exceeding expectations for the current-year budget, how will Republicans justify their planned cuts?
Paulsen asserts there are "several hundred million dollars in the current year's budget of marginal or no value to Iowans," but a large share of the budget goes toward education and human services. Todd Dorman posted the wish lists for spending cuts Iowa House Republicans offered during the last two legislative sessions. Some of the ideas are more realistic than others. Republicans could save tens of millions by scrapping the preschool program and the Power Fund. However, Iowa doesn't spend anything like the $92.3 million Republicans claim we could save by ending "all state benefits to adult illegal immigrants." I expect the Legislative Services Agency to point that out next year.
Republicans have said $18.5 million could be saved through privatizing the state's vehicle fleet. However, Democrats have disputed those projections:
Since December 2009, the Department of Administrative Services has already achieved more than $10.5 million in cost savings under [Executive Order] 20 and [Senate File] 2088 on fleet management reforms. A 2007 Iowa Legislative Services Report concluded that selling off the entire state fleet would cost taxpayers millions of dollars, instead of saving money.
I doubt it would be workable to combine administrative functions at the University of Iowa, Iowa State and the University of Northern Iowa, which Republicans claim would save taxpayers $62 million.
Republican plans to save $4 million by eliminating "taxpayer-funded lobbyists" are misleading too. Although some state employees register as lobbyists during the legislative session to weigh in on bills that would affect their departments, the state does not hire any contract lobbyists. A Des Moines Register report from last summer identified $1.8 million in Iowa taxpayer-funded lobbying costs, but that figure included lobbying expenses of "state agencies, municipalities, county agencies and associations where member dues are paid by taxpayers, such as the Iowa League of Cities."
Any comments about the state budget are welcome in this thread.
UPDATE: In the comments, willinIA points out that the $62 million in supposed savings from merging administrative functions at the regents universities was pulled out of the air by Ed Failor of Iowans for Tax Relief.