Myth of the $1 Billion Surplus

The so-called “surplus” is actually:

$600 million in one-time cash reserve funds (needed to help the state cash flow)
$250 million in one-time ending balance from this year (FY 12)
$200 million in on-going revenue growth for next year (FY 13)

The state budget is really about $12 billion. $6 billion appropriated by the state and $6 billion received from the federal government.

State law requires that 10% of the budget be set aside in cash reserves and not spent on ongoing operations. This means the $600 million is off-limits for existing and new spending.

The Legislature can legally spend the $250 million in one-time ending balance money from this year. However, this is a reckless and short-sighted budgeting practice because it builds $250 million of spending the following year without one-time money to pay for the new spending.

While the Legislature can spend up to 99% of the projected revenue, it is not required to spend at that level. The economy, federal debt, and anticipated federal cuts that will impact the $6 billion in federal funds received by the state require common sense and discipline.

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Walt Rogers

Walt Rogers is a State Representative for Iowa House District 20 representing Waterloo, Cedar Falls, Hudson, and Voorhies. Prior to that he worked with youth for over twenty years at Orchard Hill Church and Prairie Lakes Church, both in Cedar Falls, IA. He has also worked Rath Packing Company, Northland Products, and Mudd Advertising, and has served as a leadership consultant. Walt is a graduate of the University of Northern Iowa He and his wife Jenny live in Cedar Falls and have three adult children.