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House
and Senate Republicans Release Joint Budget Targets
On
Tuesday, March 4, House and Senate Republicans released the FY
2004 joint budget targets. The
budget targets will help put the state of Iowa on sound financial
footing for the future.
The
targets represent an increase of general fund spending of just
$6.5 million compared to FY 03.
This figure does not include the $41.1 million supplemental
appropriation for Medicaid in FY 03 or the cost of the salary bill
for FY 04.
The
State Auditor recently criticized the Governor’s budget
recommendation for a lack of long-term planning.
Republicans answered this criticism by reducing the FY 05
deficit to under $100 million in the targets.
One
month ago, Republican leaders said they would follow the sound
budgeting principles put forth by the Iowa Taxpayers Association.
The GOP budget targets are in line with these principles
because they: reduce the reliance on one-time sources of revenue
for ongoing expenses; will not implement new programs for a
partial fiscal year; avoid multi-year accelerating commitments;
avoid automatic spending increases (with the exception of two
percent allowable growth in FY 05); attempt to align expenditures
with revenues; and use a conservative approach to determining
revenue and expenses.
The
targets continue the Republican principle of improving student
achievement. The
budget fully funds two percent allowable growth for K-12 schools,
funds an increase for the teacher compensation program and
continues the $30 million class size reduction and reading
improvement block grant program.
Finally,
the budget targets represent something that, politically speaking,
the Governor can sign. Most
of the reductions come from the reinvention savings plan, an idea
originally proposed by the Governor.
We agree with him that a better way to implement budget
cuts is through reinventing state government.
The
bottom line is that the Republican budget targets aim to put the
state on a sound financial footing for the future while
maintaining a commitment to improving student achievement and
creating wealth for all Iowans.
It is fair to assume the Democrats will complain that the
cuts are too deep or that the Legislature isn’t spending enough.
If more was spent, the deficit in FY 05 would require
massive cuts or a tax increase and it is doubtful Democrats could
be counted to vote for
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either
in an election year. It
is a much more sensible fiscal policy to slow the growth of spending
this year to prevent those things from happening next year.
Republicans
Lead the Way on Biotechnology Fund
TransOva,
a growing biotechnology company located in northwest Iowa, has
proposed state financial assistance for the building of production
facilities, a purification facility, a commercial biodefense
pharmaceutical production facility, and for proprietary technology.
HSB 180 appropriates a total of $33 million over three years
for the construction of such facilities. The House Economic Growth
Committee passed HSB 180 out of committee on Tuesday, March 4. The
bill has moved on to the House Appropriations Committee, where it
will be discussed on Monday, March 10.
Funding
for these facilities is established through an Animal Biotechnology
Commercialization Fund (ABC) Fund.
The fund is to be administered through the Department of
Economic Development (DED), and will provide grants and loans to
qualified life science companies for the purposes of constructing
infrastructure for the production facilities, purification
facilities, and commercial biodefense pharmaceutical production
facility.
State
funding for the facilities is contingent on the commitment of
private and federal funds. For
example, TransOva is anticipating the commercial biodefense
pharmaceutical production facility to be a federal-private venture
involving $100 million in federal and private investment for the
production of bio-defense human antibody products.
State funding would be contingent upon a secured federal
contract and identification of a project facility.
With
the construction of the production facilities, purification
facility, and the biodefense commercial production facility, over
200 new jobs will be created at salary levels of $35,000 to $45,000.
The total projected tax revenues per year are over $57
million including sales tax, income tax, and property tax.
Ways
& Means Update
Bills passed out of Ways & Means this week:
No
Bills passed out of committee this week.
Bill
Assignments:
No Bills where assigned in committee this week.
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