WHITVER: Now is The Time to Bolster "Rainy Day" Accounts

There has been a lot of attention on the state budget the past couple of years. When I took office, we were trying to balance an upside down budget. Today, we have accumulated over $600 million in our ending balance.

There have been hundreds of ideas of what to do with the excess money. At the beginning of session, Republicans in the Senate drafted an amendment to give the money back to the taxpayers, which would have been about $700 per family. That proposal was blocked in the Senate and doesn't look like it will happen this year.

Since that time, I have spoken to many people about what to do with the ending balance. In fact, I included a question about it on my last constituent survey email. Most people agreed with giving the money back to the taxpayers, but the second most common suggestion was save it for a rainy day.

The state of Iowa currently has two reserve accounts in state code. We have the cash reserve account, which by law must contain 7.5 percent of our state budget (about $466 million). We also have an economic emergency account, which by law must contain 2.5 percent of our state budget (about $155 million). So in total, the state of Iowa keeps 10 percent of our state budget in reserve. These accounts are extremely important to ensure that the state can meet our financial commitments in tough economic times.

After hearing from many constituents who suggested that we save the money for a "rainy day," I began work on a bi-partisan plan to increase our "rainy day" fund another 2.5 percent to a total of 12.5 percent. Increasing the economic emergency account is the best way to protect the ending balance money and make sure it is saved. The Legislature has proven over the years that if money is not protected, they will spend every dollar they can get their hands on.

I believe an increase to 12.5 percent is a reasonable amount to have in our reserve accounts in case of an economic emergency. At 12.5 percent, we would be one of the highest reserve accounts in the nation. While some people may suggest that we save all of the $600 million of ending balance, I believe this would be counterproductive. If we save it all, we would have almost $1.5 billion in our reserves, over 20 percent of the state budget.

Instead of holding the rest of the $600 million in the state account, that money is more productive back in the hands of the people of Iowa. The money will be pumped back into the economy and provide Iowa with the economic growth that we need.

A bill to increase the economic emergency account filed by Senator Rob Hogg (Democrat from Linn County) did not survive funnel week, killing it for the session. However, it is a very simple bill that I will attempt to run as an amendment sometime this session. I am extremely hopeful that I can find the right place for the amendment so we can get it passed this session.

After increasing our emergency account, I will continue to work to get the rest of the money back to the taxpayers who paid the excess taxes. Increasing the economic emergency fund is a fiscally sound proposal that will help provide Iowa with more financial security for decades to come!

As always, feel free to contact me at jack@jackwhitver.com.