What a year Iowa has experienced! Tornados, record floods, and now financial distress top the list of challenges for this year's legislative session.
I wanted to use my first newsletter to paint a financial picture for Iowa's taxpayers. Our main mission as Iowa legislators is to provide a balanced budget which begins on July 1, 2009 (referred to as the FY2010 Budget). A couple of weeks ago we were told that our "spending gap" is $779,000,000! A "spending gap" occurs when there exists NO REVENUE to pay for the purchases we've approved for next year. Example: If you purchase a home and an automobile this year, the purchase was approved in 2009 and the payments will be made in 2010 and beyond, but you have no money to pay for these purchases. The Iowa Legislature approved increased spending in FY2009 for employee pay raises, property tax credits, education funding, and Medicaid payments. Simply put, we have $779 million dollars in increased spending on the books with no money to pay for the increase.
Sometimes a complicated situation is best defined by a simple answer. There are two simple solutions to the problem. Cut the $779 million in extra spending; or: Raise taxes and fees to pay for the $779 million in increased expenses.
Many taxpayers have become immune to the large numbers government throws at them, especially during the financial bail out, the auto bail out and now the State of Iowa financial crisis. In fact, most taxpayers have no idea how much money $779,000,000 actually is. Here are three test questions you can answer to see if you understand the level of overspending Iowa is experiencing.
Question #1: If I laid 779,000,000 dollar bills end-to-end, and then I got in my car and drove 100mph non-stop, how long would I have to drive before I reached the end of the 779,000,000 dollar bills?
Answer: It would take me one month to reach the end of the dollar bills!
Question #2: If you laid 779,000,000 dollar bills end-to-end, how far would it stretch?
Answer: More than twice around the world!
Question #3: Ok, I'll be 51 years old in February. If I was able to pull a dollar bill out of my pocket every second to pay for the $779,000,000 shortfall, how long would it take me to complete the payment?
Answer: Beginning at age 51, I would finish just short of my 76th birthday!!!!
Ok, your test is over, now my test begins.
Question for Rep. Horbach: How do you intend to balance the $779 million short fall?
Answer: Don't raise taxes, cut spending!
(Hey Dad - Remember helping me with my math homework? It paid off!)