(Des Moines, Iowa) – State Auditor Mary Mosiman,
in fulfilling her duty as the “Taxpayers’ Watchdog”
to report directly to the people of Iowa
on the condition of the State’s finances, has
completed her review of Governor Branstad’s Fiscal
Year 2015 proposed budget.
Proposed Budget Continues to Reduce Reliance on
One-time Monies
Auditor Mosiman said, “Though we continue to shift
ongoing General Fund costs to other funds, we
are making improvements. The Fiscal Year 2014 adopt
ed budget reduces the reliance on one-time
monies to just $36 million – a huge improvement over
past years. The Governor’s Fiscal Year 2015
proposal further reduces the amount to $29 million.”
However, Auditor Mosiman added, “We continue to have
significant transparency-related shifts –
shifting ongoing General Fund revenues and expenses
to other funds. These types of shifts distort
comparisons with previous years. This budget proposal
decreases shifts that impact transparency by
$66 million, so this is a step in the right direction.”
Spending Gap and Long-Term Planning
Auditor Mosiman said, “Don’t spend more than you take
in. My predecessor championed that simple,
common-sense rule, and I do as well.” The proposed
Fiscal Year 2015 budget calls for a spending gap
of $144 million. Mosiman said, “The proposed budget
does not include significant spending on new
programs, so nearly all of the spending increase in
the proposal is focused on honoring commitments
made to existing programs.”
Specifically, Mosiman noted two ambitious new laws
which begin to have substantial fiscal impacts in
Fiscal Year 2015 – the property tax reform law and
the education reform law. Auditor Mosiman had
previously noted provisions in each law have a
delayed fiscal impact followed by multi-year
accelerating commitments. “The impacts of these two
laws alone will exceed $150 million in Fiscal
Year 2015 and will increase in future years.”
Mosiman said, “Long-term planning is essential to
ensure Iowa stays on a path of fiscal sustainability.
.When our state officials plan for the long term,
they can impact the future instead of simply reacting
to it.” For years the State Auditor’s office has
emphasized long-term planning as a good budgeting
practice. Mosiman said, “Because the proposed
budget is based on a long-term plan, it is critical to
maintain fiscal discipline over the term of the plan.”
Noted Items and Challenges Ahead
Mosiman noted the proposed budget potentially under
funds Medicaid by $19 million. Mosiman said,
“I realize Medicaid spending is a moving target,
but it is a good budgeting practice to use the best
estimate available. This budget falls at least $19
million short of the best reported estimate for
Medicaid.”
Salary and benefit cost increases are not separately
funded in the proposed budget, which means
agencies will have to absorb any increased costs
within their existing appropriations. If enacted,
this would be the sixth consecutive year salary and
benefit cost increases have not been separately funded.
Auditor Mosiman said, “If this practice continues without
offsetting agency efficiencies, these salary and benefit
cost increases could affect the level of service agencies
can provide.”
There will be considerable pressure on revenues and
spending in Fiscal Year 2015 and beyond. Mosiman
noted, “The State is essentially an equal partner with
the Federal government in terms of delivering services
to Iowans. As the Federal government makes its fiscal
decisions, we can reasonably expect a change in
Federal dollars coming to the State. When that
happens, we need to be prepared.”