Culver touting higher-than-expected savings

UPDATED Savings from the state's early retirement program, government reorganization and Gov. Chet Culver's executive order will be higher than expected, Culver said July 2.

The savings were expected to amount to about $270 million in fiscal 2010 and 2011, but Culver said Friday the savings are now estimated to be as high as $298.8 million over two years.

That comes on the heels of the non-partisan Legislative Services Agency's annual report showing net state tax collections for the 12-month period that ended June 30 were the lowest in four years.

Culver's executive order, which is expected to produce $84.2 million in savings, and the two legislative initiatives “are just the beginning” of efforts to reorganize and reform state government to find efficiencies in every state department, Culver said.

“State government must tighten its belt in the same way Iowans are finding ways to save money in their family budgets,” Culver said. “While the process is not always easy, our common-sense cost savings and efficiencies in state government are working. This is just the beginning of our efforts to reorganize and reform state government and we will find efficiencies in every state department.”

“I hope he's right,” said House Republican Leader Kraig Paulsen of Hiawatha.

The estimates by the departments of Management and Administrative Services seem optimistic compared to those of the LSA, Paulsen said, “So I don't think we should build these numbers into the budget.”

Culver is using a “politically heightened dollar figure” that completely ignores his record of unsustainable spending, sky-rocketing property taxes, generational debt and unacceptable levels of unemployment, said Senate Republican Leader Paul McKinley of Chariton.

“He has failed to address the nearly $250 million increase in property taxes this year, the quintupling of state debt, the consistently high unemployment and is denial about the almost $1 billion budget shortfall for next year,” McKinley said.

According to Culver, the state will reach $298.8 million in savings from:

• $88.6 million – State Employee Early Retirement Incentive Program (SERIP)
• $84.2 million – Executive Order 20
• $126.0 million – Senate File 2088 (State Reorganization Bill)

According to LSA, the state treasury took in $5.504 billion in tax receipts during the 2010 fiscal year that ended Wednesday. That's $235 million less than the $5.739 billion collected in fiscal 2009, $6.059 billion for fiscal 2008 and $5.548 billion for fiscal 2007.

Overall, net general fund receipts for fiscal 2010 were down 4.1 percent compared to fiscal 2009. That was better than the negative 8.7 percent projected by the state Revenue Estimating Conference in March. The three-member panel has projected a 2.1 percent growth rate in fiscal 2011 – which is half the yearly growth average of 4 percent for 2002 through 2009.

“Look, bottom line, the governor spent too much and he's been doing that for four years,” Paulsen said. “We still have a bloated budget and we're walking into a $1 billion spending gap.”