Economic downturn means havoc for Iowa budget woes

Plymouth County legislators Rep. Chuck Soderberg and Sen. Randy Feenstra said the economic downturn is presenting some real challenges for the Iowa Legislature this year.

The two spoke at a 9 a.m. Legislator's Forum Saturday at the Le Mars Public Library.

"The number one priority for both parties is to get back on track and get people back to work," said Soderberg to a group of area residents.

As of last week, 80,000 Iowans were without jobs, he added.

The biggest challenge is to come up with a balanced budget for both this year and the next fiscal year, he added.

He said revenue estimates are expected to go to a negative revenue growth.

"We're looking at tough choices, not only before July 1 but also for 2010," Soderberg said.

Feenstra was participating in his first forum. Feenstra was elected to the Iowa senate in November replacing Dave Mulder, who retired.

He agreed with Soderberg that the budget is the top priority.

While Gov. Chet Culver has requested a zero-based budget, Soderberg said his subcommittee received a request for an 11 percent increase by one department.

"I asked that department head to make cuts or we will cut their budget," Soderberg said.

The uncertainty of federal stimulus dollars has added to the state's budget woes.

"My hope is there are specific strings attached to the funds, and that it doesn't just go into the general fund," Soderberg said.

The governor has also suggested borrowing $700 million from the state's reserve fund, paying it back over 20 years at $56 million per year. Since the governor has suggested money goes toward infrastructure, Soderberg says the best place for that money is the Road Use Fund.

Labor issues will also be focused on this legislative session, including the right to work law, collective bargaining, and the prevailing wage issues.

Being near the South Dakota, Nebraska and Minnesota borders, both Soderberg and Feenstra are concerned with the labor issues and the advantages border states can offer businesses.

Several in attendance at Saturday's forum said they were concerned about what opening collective bargaining could do to things such as teacher contracts and other labor negotiations.

Plymouth County Supervisor Gordon Greene expressed his concern about changes in the mental health formula and what that would mean for county budgets.

Feenstra said he gets frustrated when the burden is put on the back of the county and local people as the state makes cuts to their budget.

Le Mars Community Schools Board of Education member Mark Hemmingson said he was concerned with the School Infrastructure Local Option sales tax which was voted a state-wide one penny tax during last year's legislative session. The tax is to be used for buildings, busses and equipment for schools, but cannot be used for general fund expenses.

"The public doesn't understand it," Hemmingson said of how the districts can get money for building facilities but can't use the money for transportation costs and utilities. Hemmingson cited the Le Mars Community School District as one of the largest rural districts with a large number of bus routes.

While he asked if there was a way to get some of those funds released for utility and transportation expenses, others at the meeting expressed concern about opening a funding source to "tweaking."

"The SILO bill was a very emotional issue last year for both parties," Soderberg said. While he understood where the school districts were coming from, he didn't know if this would be the year to open that issue in the legislature.

The suggestion of opening a bill up raises questions of what changes would be made, Feenstra said.

"It would need to be opened for very specific things, such as transportation and utilities only," he added.

In labor issues, Soderberg said the Targeted Jobs program is working great in pilot cities in Iowa. That program involves tax breaks for businesses in border cities where neighboring states have a better business climate that Iowa.

"I hope to see that expanded," Soderberg said. Reports are expected from the pilot cities on the success of the program to keep businesses and jobs in Iowa.

Cheryl Juhl of The Can Farm in Le Mars went to Des Moines last week to talk with Soderberg about the bottle bill, and attended Saturday's forum. The bottle bill concerns the 5-cent deposit on pop bottles and cans that recycling centers pay consumers.

The Can Farm in Le Mars has nine employees.

"This is an issue that doesn't even affect the state budget," Soderberg said. He said he would keep working to get some action on the bottle/can redemption issue.

Those attending the forum agreed that the state can't afford to pass more unfunded mandates for local entities.

Soderberg said the legislature passed its first unfunded health bill last week.

"This is not a time for increased or added fees or unfunded mandates," Soderberg added. The record spending by the state will not be sustainable with the declining income being received, he added.

"The spending is out of control and there are tough choices ahead," Soderberg said.

Soderberg and Feenstra also met with area school administrators and board members at 8 a.m. and held a forum at Akron at 11 a.m. Saturday.