OSKALOOSA — Iowa House Majority Leader Kevin McCarthy says the Democrat-led Legislature this upcoming legislative session will balance the budget and reorganize state government to operate more efficiently.
"We're going to have a balanced budget and do so without raising taxes," he told the Herald in an interview noon Friday. Also, the governor and the Legislature will embark on "the largest government reorganization plan ever pursued by the Iowa General Assembly."
McCarthy was joined by Democratic state Rep. Eric Palmer and Democratic state Sen. Tom Rielly when he stopped at Smokey Row Friday as part of a tour around the state to give a "State of the State" report.
McCarthy said the government reorganization will equal on paper about a $250 million savings. He said the reorganization plan has bipartisan support.
The reorganization will be done in two phases - the governor can take immediate action and the Legislature will vote on its reorganization plans in January and February, McCarthy said.
Gov. Chet Culver can make $128 million in changes through an executive order immediately while the Legislature will vote on about $150 million in savings, McCarthy said. These savings will put the government in good finanical order as the state's "Rainy Day" fund currently has $530 million.
The reorganization includes things such as switching from paper to electronic filings, merging computer hubs, making group purchases for supplies and selling most of the state's vehicle fleet.
McCarthy said the reorganization will make government more transparent and will add up to a savings of $1 billion over four years.
McCarthy argues that Iowa is in much better financial shape than Wisconsin, which has no cash reserves and a 25 percent budget hole.
McCarthy said that Iowa is on the cusp of turning the corner economically.
"Our economy has reached a stabilization period," he said.
Housing starts are up 39 percent in the last quarter and the state's unemployment rate is 6.7 percent, which is a lot lower than many states.
"We're well positioned to weather the storm," Palmer said.
Plamer cited a study by the Pew Foundation that found Iowa was the 47th lowest in bonding among the states.
"I'm optimistic about the future of Iowa," Rielly said.
"We're a great place for business," Rielly said. He added that the state is more than willing to work with businesses and the state's quality of life is great. Companies like IBM and Google would not come to Iowa if it wasn't a good place to live and work, he said.
Rielly hopes that the reorganization will translate into better budgeting practices in the future.
Palmer said the state still needs to fund priorities such as early childhood education and child health care. He added that the SILO tax has been a boon to school districts in rural areas such the Oskaloosa school district.
Rielly said that Iowa was not immune to the effects of the global economic collapse.
"It's going to be tough. We will get through this," he said.
Herald Editor Duane Nollen can be reached by email at oskynews@oskyherald.com
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