Auditor criticizes state budget plan

Des Moines Bureau

DES MOINES – State Auditor David Vaudt criticized the Legislature and Gov. Chet Culver for building a fiscal 2011 spending plan so heavily reliant on $736 million in one-time funding sources that it promises a budgetary “cliff” the following year.

“One out of every five dollars of general fund costs is shifted to and paid for by other sources,” the auditor told reporters.

Vaudt also said the much-ballyhooed reorganization efforts undertaken during the 2010 session by Culver and the Democratically controlled Legislature “barely scratched the surface” on what needs to be done to control the long-term costs of operating state government.

The auditor said the measures to revamp state operations, cut staff using an early-retirement incentive and other projected efficiencies will provide an estimated $108 million in savings for the general fund. The bulk of the overall savings of $250 million savings expected to be achieved government wide will take place in areas outside of the general fund, he added.

“It's not a real challenging goal that we've accomplished here,” he said. “While this is significant, it represents less than 2 percent of the true cost of providing general fund services. It's like a family with a $250 weekly grocery bill finding $4 per week in savings.”

While balanced, Vaudt said the state's fiscal 2011 budget relies on $325 million in one-time federal stimulus help and $265 million from the state's cash reserve to support true overall expenditures of nearly $6.4 billion. He expressed concern that up to $125 million in Medicaid funding is based on an expectation that Congress will approve an extension of stimulus funding, another $162 million in underfunded K-12 school aid could be shifted to property taxpayers and that $50 million in underfunded state salaries could result in more unpaid furlough days or layoffs during the fiscal year that begins July 1.

Vaudt said the fiscal 2012 budget will pose another $1 billion funding gap but state officials will face much more difficult decisions because “the easy options are gone” as one-time sources have been reduced. He noted the state's cash reserve will slip from $592 million to $199 million by June 30, 2011.

“We're going to face that huge cliff in 2012,” he said.

Culver countered that he and the Legislature faced tough challenges this past session and once again produced a balanced fiscal 2011 budget despite a continuing partisan, “doom and gloom” message from the Republican state auditor.

“Last year the auditor said the budget was not balanced. Well, he was wrong. He said we would have to have a special session because we would be $150 million short,” Culver said. “He was flat out wrong and he'll be wrong again today when he continues to mislead the public with talk of doom and gloom.”

The governor also pointed to the state's AAA bonding rating and high marks from the Pew Center for being among America's best-managed states in refuting Vaudt's criticism.

“Our budget is balanced. It's been balanced every single day since I've been governor,” Culver said. “I'm afraid this has become a lot about politics and partisanship instead of about the facts.”

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