Deficit or Surplus
Iowa Democrats say the state is running a major budget deficit. Iowa Republicans say they are following the state Constitution and the budget is balanced each fiscal year.
Only in the world of politics and government can both statements be true—and they are.
The state is spending, through legislatively-approved appropriations, more than it is taking in each year. By all normal math, that’s a deficit.
But there is so much money in the state surplus fund, any overages in spending are covered by taking money from the surplus. So it’s balanced, we’re not in the hole.
Obviously, however, those state surplus funds will only last so long. And as our friends at Common Sense Institute Iowa have analyzed it, the current year’s state budget is taking that into account. They have projected that so long as state spending is at the current level—as opposed to that of the past couple of years—we’ll still have more than enough in reserve for emergencies.
And this was all part of the plan; we had far too much in the surplus, so we now have a lower, flat, individual state income tax rate. By design, the state is taking less money in, using the overpayment of taxes to cover it.
But it’s great on the campaign trail to be a Democrat saying we have a state deficit…because that’s easy to say and for an audience to understand. It’s harder for Republicans to rebut, although they easily can…especially since the Democrats’ stated answer is to raise taxes, to make the so-called rich pay their so-called fair share.
As always, better ask what they mean by “rich” and “fair share”—if history is any guide (and it is), you might be in that group.
