Experts fear GOP cuts could undermine long-term economic growth


Meghan Malloy
The Iowa Independent
January 21, 2011

Republican lawmakers faced criticism Thursday from Democrats and economists who believe a bill aimed at cutting millions in state services in order to provide tax cuts will only fix short-term problems while creating holes in future budgets.

The bill in question, House File 45, is a broad spending cut bill. Most prominently, it would eliminate universal preschool funding for four year-olds, make funding cuts at the higher education level, cut funding for family planning services, eliminate a state-funded smoking cessation program and eliminate funding for passenger rail.

The bill would also create a “tax relief fund,” which would “receive one-time excess funds from the Economic Emergency Fund, once the state reserve funds are full,” according to the legislation. Legislative Services Agency officials have pegged $327.4 million going into the fund in the 2012 fiscal year.

Republican leaders maintained the bill — which passed late Wednesday night in the Iowa House — not only will solve long-term budget problems, but will “put a band-aid on the short-term budget problems we’re facing,” Speaker of the House Kraig Paulsen (R-Hiawatha) said.

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