While Iowans had little to do with the mismanagement, greed, and financial carelessness that is causing the worst national economic situation since the Great Depression, we will all be sharing in the pain. Governor Culver has offered a budget proposal that is balanced and does not raise taxes. Governor Culver is recommending a 6.5% across-the-board cut, or about $400 million, for 207 out of 253 programs in the state budget and includes no tax increases. Those cuts come on top of the $180 million cut the Governor made in December to keep the state’s budget balanced. The Governor also uses $200 million from the state’s cash reserve fund. Certain key services for Iowans will not see the full effect of the cut -- public safety, unemployment services, health care for children and families, crime victim compensation, pre-school education, substance abuse, and student achievement efforts. Now, the Legislature begins our work on the state budget. In the weeks ahead, our seven budget subcommittees will review every program and line item in the state budget to find waste and efficiencies. We will work together to produce a fiscally responsible budget that maintains the progress we’ve made for middle class families in education, affordable health care, good-paying jobs and public safety.
The first bill of the 2009 session is $56 million of emergency disaster relief and will be signed into law on Monday by Governor Culver. The bill has three major components -- $24 million for housing assistance, $10 million for individual disaster grants, and $22 million for community disaster grants. The housing assistance funds will be available through Jumpstart Iowa, which was created by Governor last fall to help storm victims with down payment assistance, housing repair or rehabilitation, and interim mortgage assistance. In addition to the $24 million more for housing assistance, the bill also expands eligibility to more Iowans by raising the county median family income threshold for assistance from 100% to 150%. Preference will first be given to Iowans who have received no Jumpstart aid. The individual disaster grants can be used for personal needs and mental health expenses. More Iowans qualify for assistance because the eligibility requirement is raised from 200% to 300% of the federal poverty level, which means a family of four making under $63,600 would qualify. The grants are administered by the Department of Human Services.
The $22 million for Community Disaster Grants will be given to cities and counties based on their share of the total statewide damage costs associated with the natural disasters. The grants can be used for things like buyout programs, small business assistance, nonprofit assistance, incentives for replacing or rehabilitating housing stock lost in disaster, and repair or replacement of public infrastructure. Iowans who still need assistance or would like more information on relief efforts can log on to www.rio.iowa.gov or call 515-242-5004.The $56 million comes from the state’s Economic Emergency Fund, which is one of our savings accounts, created to help in times of crisis. The emergency fund is currently full at $155 million and our other savings account, the Cash Reserve Fund, is also full $465 million. Given the devastating tornadoes and floods earlier this year that have caused billions in damages, it is clearly time to use some money to help rebuild.
A bill approved by the House and Senate this week allows flood ravaged communities an opportunity to help themselves. For over 30 years, Iowa law has allowed local communities, by a vote of the people, to impose a one cent local option sales tax (LOST) in their community. If the LOST referendum is approved, the extra penny is collected beginning on July 1 or January 1 of the following year. Currently, 89 of 99 counties already have the local option sales tax and 851 of 950 cities in Iowa already have approved the tax. In the wake of last summer’s devastating floods, some communities, like Cedar Rapids, that had not yet approved the LOST in their own community requested a simple change to the law that would be collecting the extra penny sooner. The LOST would still have to be approved by a vote of the people in a special election, but the community could start collecting the penny on April 1, instead of July 1. Senate File 44, which has already been approved by the Senate, is a one-time, temporary change only for communities that received a Presidential Disaster Declaration due to last summer’s severe weather. It does not create a new tax for local communities. It only allows them to speed up the collection process after it has been approved by a majority of voters in their own community.
For the past six years the Business Development & Process Team of the Iowa Coalition for Innovation and Growth, a collaboration of Iowa Business Council and the Iowa Chamber Alliance, has worked to institutionalize the philosophy of Lean Enterprise within state agencies. Successful businesses worldwide utilize Lean, which is the continuous, critical evaluation and improvement of administrative and production processes. Unnecessary steps or “touches” determined to add no value to to the end product or service are eliminated. As a result, human and financial resources are deployed more efficiently while costs are reduced, product quality is increased, employee sense of value and worth grows, and customer satisfaction rises. In 2006, the Iowa Department of Management received an appropriation to create the Office of Lean Enterprise, which has now assumed administrative responsibility for all future Lean events in state government. During the month of January the Office of Lean Enterprise, led by Teresa Hay McMahon, coordinated and conducted state government’s 100th Lean Event within the Iowa Workforce Development Unemployment Insurance Tax Collections Office. As a result of leadership from Governor Culver and the determined efforts of the State Government Lean Initiative and the Office of Lean Enterprise, Iowa now serves as a role model for state governments everywhere that are trying to duplicate the introduction of Lean throughout their own regulatory structures.