Another Mess: Branstad And Reynolds Are Bankrupting Iowa

By the time Terry Branstad leaves for China, Iowa’s treasury may be as empty as his many campaign promises about fiscal responsibility. And Kim Reynolds is about to take on both the political responsibility and near-impossible governing responsibility of cleaning up her and her current boss’ huge mess.

The Des Moines Register reported late Friday the disheartening news that Iowa would once again be shelling out hundreds of millions of dollars for the Branstad/Reynolds failed Medicaid privatization scheme. The three private insurers have lobbied the Governor’s office for yet another payout to cover their “catastrophic” losses under the new setup, and it’s clear now that Branstad and Reynolds have given in.

“Department of Human Services leaders signed contract amendments in February, under which the government agreed to shoulder losses beyond a certain point,” the Register reported.

How much the state will hand over to the private insurers is unclear at the moment, but the healthcare providers claim they’ve lost $450 million from their Iowa operation. So one could theorize that Branstad and Reynolds are about to hand over more state funds in the 9-figure range.

Is Iowa going to have any money left by the end of 2017? The state’s revenue for this year has already been revised downward twice. In January Republicans made $118 million in cuts and credit transfers that put the budget problem on the backs of Iowa’s most vulnerable. Just a few weeks ago we found that we’re another $131 million in the hole.

With much less flourish and national media attention, Branstad and Reynolds may have already turned Iowa into the next Kansas. Except in this case, the state’s looming bankruptcy came not from deep, across-the-board income and business tax cuts, but by massive individual tax hand-outs to well-connected corporations, a huge corporate property tax cut and outright incompetent management of the state’s 500,000 Medicaid recipients.

Kansas had to slash state services and education, but at the least some of their people got an income tax cut. Working Iowans have gotten nothing for their budgetary heartaches. Out-of-state corporations have received all the benefits of Iowa’s own race to the bottom, while the men and women who go to work every day are left with underfunded education, a decimated mental health system, poor wages and now a lousy healthcare program.

Branstad may get out of the country before the real collapse hits, but his longterm reputation will suffer if Iowa’s fiscal situation implodes due to his poor choices. Reynolds will have to run on this record next year, and answer the question: you’ve spent all this money – what do you have to show for it?

Once the full amount of Branstad and Reynolds’ payout to the private Medicaid insurers comes out, it’ll add one more huge figure to the fiscal failures of this administration. You might expect these kinds of budget problems in years where Iowa is facing a terrible economy, but that just isn’t the case. There’s really just one big reason for it all: incompetent management.

by Pat Rynard
Posted 3/25/17