Governor Reynolds’ rejection of federal funds a testament to attention to state and country
Iowa Governor Kim Reynolds on Wednesday, May 12, 2021, in Des Moines, Iowa. (Kelsey Kremer / The Des Moines Register via AP)
Iowa Governor Kim Reynolds recently decided to reject $ 95 million in federal COVID funds for testing and contact tracing in K-12 schools and to end participation in the ‘Iowa to $ 300 Federal Pandemic Unemployment Compensation. This reflects Iowa’s budget philosophy, enshrined in our state’s constitution.
Iowa was one of the few states to have a budget surplus in 2020, long before any federal bailout from COVID through the CARES Act was designed to rectify city and state financial debt accumulated during the pandemic. and before. The reason Iowa continues to be successful economically and is one of the most affordable states to live in is because of our healthy spending habits. Beyond greed and irresponsibility, taking unnecessary federal funds is against Iowa’s philosophy.
State Auditor Rob Sand, a Democrat, said Reynolds was simply doing a “party stunt” to the detriment of the Iowa economy. Sand said the aid could have created hundreds of jobs to administer and assist with testing at schools, sporting events, graduation and contact tracing. However, such tests are probably unnecessary. The Centers for Disease Control and Prevention has approved the Pfizer vaccine for children 12 and older, and children are much less likely suffer from severe COVID-19 disease than adults. Vaccines are widely available to teachers and other adults who may come into contact with sick children – in fact, the vaccine supply exceeds Iowa demand.
Reynolds is right to reject federal money that would create unnecessary jobs for COVID-19 testing and a redundant unemployment benefit that discourages people from looking for work. Our state unemployment rate is one of the lowest in the country at just 3.7 percent and current unemployment benefits with the federal supplement of $ 300 cover 95 percent of the average wage, which could discourage people from looking for a job that pays at or below the average weekly wage in Iowa.
These executive decisions reflect a positive tax outlook for Iowa, which is in large part attributable to the balanced budget amendments in our state constitution. This type of law or constitutional amendment of a state means that a state generally cannot spend more than it collects in tax revenue.
To see how reckless state spending can destroy public accountability and the state economy, just look east at our neighbor, Illinois. Illinois has nearly $ 140 billion in unfunded retirement debt and its credit rating is just a cut above trash status. According to ALEC âRich States Poor StatesReport, Iowa ranks # 6 in the country for debt as a share of tax revenue with just 3% going to debt repayment compared to Illinois, ranked 50th with 11.2% going to debt. debt refund.
Iowa spends relatively little on servicing our debt, giving us the financial flexibility to support pandemic services like our easily accessible TestIowa locations and streamlined vaccine deployment.
There are a variety of causes for this Illinois debt crisis: increased pension funding, early retirement options, a tax hike that has driven citizens out of the state, and the continued inability of elected officials. government to pass fiscal liability laws. Iowa’s budget process could be described as a regular gym-goer with a healthy lifestyle, while Illinois is a dieter who starts having seizures two weeks before bikini season. .
Our other neighbor, Nebraska, has a smaller government debt of $ 1.8 billion compared to Illinois. When comparing demographics and industry, Nebraska is much more similar to Iowa. So how can Nebraska have so much government debt? Simply put, incentives matter.
Having an amendment in our state’s constitution that requires us to balance our budget means that every bill and invoice the state receives must be accounted for with a source of funding. Illinois will likely never get off this debt, as no politician will ever be elected on a platform of cutting public programs, retirement accounts, and public sector layoffs. The constitutional spending cap prompts politicians in Iowa to write rational plans, while the absence of a constitutional spending cap in other states encourages public projects that are economically unfeasible.
Economic conditions tend to snowball. Iowa has a very stable state economy because we’ve set ourselves up to be successful by having a healthy budget and a part-time legislature. Our politicians only have a certain amount of time to prioritize their goals and are paid a modest sum for their efforts. There is little financial or social incentive to become a political celebrity, and proposals must pass the economic odor test or they will be thrown down the funnel.
Iowa’s fiscal responsibility also benefits other Americans. During the COVID-19 pandemic, Congress debated the Illinois rescue. If a federal bailout is passed, taxpayers across the country will foot the bill for Illinois public pensions and other expenses.
The United States can afford a few bad apples in our basket, but too many of them will fail. The federal debt is real and threatens young Americans. Chaotically run state budgets rely on the rest of the country to be economically salable and provide lifelong charity for their bad decisions and non-existent accountability.
Reynolds set a good example for all of America that we need to take care of each other by taking care of the economic health of our country.
Patricia Patnode is editor-in-chief of the Gazette. Comments: [email protected]