CHICAGO -- A committee of business, labor, and political leaders last week recommended a combination of state budget cuts and reforms that could save Iowa $417 million in fiscal 1993.

The recommendations of the governor's Committee on Government Spending Reform, would allow the state to comply with a law that requires the general fund budget to be balanced according to generally accepted accounting principles by the time fiscal 1993 ends on June 30, 1993.

Gov. Terry Branstad's administration currently estimates the state's GAAP deficit at $298 million. The general fund budget for the fiscal year that began July 1 is $3.2 billion.

Committee Chairman David Fisher said the most controversial recommendation is to slash state aid to public schools by $127 million in fiscal 1993, which begins July 1, 1992.

Mr. Fisher said the committee's 22 members believe the cuts could be made without affecting the quality of education in the state. He noted that state funding of schools had grown to $1.92 billion in 1990, from $1.18 billion in 1980, while enrollment had declined to 480,000 students, from 550,000.

"We're only asking that the school districts become more efficient," Mr. Fisher said.

Paulee Lipsman, a spokeswoman for House Speaker Bob Arnould, D-Davenport, said she doubted the the Democrat-controlled legislature would go along with such a large cut to education.

"We've always put a priority on a quality education system, and I don't think we'd be willing to do anything that could harm that," she said.

Richard Vohs, a spokesman for the governor, said Gov. Branstad would not comment on the specific recommendations in the report until he had time to study them. Mr. Vohs added that the governor could incorporate some of the recommendations into the fiscal 1993 budget he will propose next month.

The committee, which Gov. Branstad appointed in September to explore possible state budget reforms, suggested dozens of cuts and savings. Among the major recommendations were:

* cutting funding to community colleges by $33 million.

* eliminating the $30 million annual appropriate for the Resource Enhancement and Protection program, a pollution control initiative.

* transferring $50 million to the general fund from the Road Use Tax Fund.

* reducing the number of state Department of Transportation Drivers License facilities to 19 from 141, for a savings of $9.5 million.

The committee also recommended that the state create a rainy-day fund, but it did not specify how large the fund should be or how it should be created. Moody's Investors Service and Standard & Poor's Corp. have recommended that the state consider implementing a rainy-day fund.

One big-ticket item the committee recommended is to fund the construction of the Iowa Communications Network, a fiber optic telecommunications system that would link state offices, universities, community colleges, and schools.

Mr. Vohs said the state is scheduled to issuea about $90 million of certificates of participation in January to help build the network, which is estimated to cost $100 million. The rest of the money would come from state appropriation. Debt service on the certificates would be paid by annual appropriations of the legislature. The state constitution bars Iowa from issuing general obligation debt.

Mr. Vohs said the governor would review all the committee's recommendations and incorporate some or all of them into the fiscal 1993 budget that he will propose next month.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.