By SEN. DENNIS BLACK
Democrat, Lynnville
By its very nature, government tends to be reactive. This is not new. Conversely, it has been the trend for at least a century. The downside to this is the fact when something occurs where any level of government is adversely affected, whether man or naturally induced, then the source of funds to "fix" the problem are seldom available.
Communities, counties and schools look to the state during times of shortfalls or disaster, and the state expects cooperation from the federal government. That is what occurred during the past several years in Iowa, other states and the national level. Then, with a global economic meltdown, changes in the spending habits of the populace exacerbate the problem. Unemployment grows, as capital investment in existing or intended small business and industry creation or expansion is put on hold. This is basic economics.
Add nature's wrath, whether in the Gulf of Mexico with the oil disaster, or moisture brought to the Midwest from the rotation of weather systems laden with moisture from the Gulf, or Pacific Coast fires and earthquakes that add to the cost of repair and replacement of infrastructure, and government is expected to accept the predominate burden of these costs. With that, the source of funding comes from our pockets. Needless-to-say, the last couple of years have been devastating from a national perspective.
From a provincial standpoint, Iowa is one of only eight states to win top financial marks. Eight states have received the highest possible rating, AAA, from the top three financial ratings agencies. Iowa's across-the-board AAA rating is a vote of confidence in our state's economic future. Proudly, we have the fourth best and stable state budget in the nation.
In other words, not only was Iowa's budget balanced on June 30 of last month, the last day of the fiscal year, that balance was $175 million more than anticipated by the Revenue Estimating Conference. With this, our ending balance for the fiscal year was $275 million. These extra funds will go into our cash reserves, which will top $500 million by the start of the year. Financially, Iowa is the envy of nearly all states in the nation.
With the figures all in, we find this to be very encouraging news, especially in view of the fact that the economy is not rebounding as quickly as expected. And yet, our unemployment across the state is relatively stable at about 6.7 percent. It is higher in the Jasper portion of my Senate district, but lower in the Polk County segment.
The function of the state is not job creation. Rather, the state can provide incentives, but we must strive to keep government at affordable levels. Again, by its very nature, the historic trend is for government to be all things to all people. That was not the intent of the founding fathers of this nation, for a bloated government not only thrives on taxes, but finds itself doing things for people that they were meant to do for themselves.
As a nation and state, we will succeed in overcoming this deep recession. It has not been one experienced before, because the world is far more complex with its internationally entwined financial markets and interaction. The economics I loved and excelled in at college is not somewhat antiquated. The world now operates on a different plane, and surely one in which we must learn to accept and lead. But the basic fact remains the same, whether it's our family budget or our state budget - we must learn to live within our means.
Questions or comments? Call me at 515-975-8608 or email dblack@black4senate.com
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