Legislators look for deeper budget cuts

DES MOINES – Majority Democratic legislators said Monday they are looking at $246 million in spending cuts in fiscal 2010 that likely will mean employee layoffs, service reductions and other belt-tightening measures.

“It will be extremely difficult, very challenging and there will be a lot of pain that will be had,” said House Majority Leader Kevin McCarthy, D-Des Moines. “Our attempt is to see if we can spread that pain as much as possible and try to maintain core services to the most vulnerable Iowans.”

Sen. Bob Dvorsky, D-Coralville, chair of the Senate Appropriations Committee, said the new $5.803 billion spending target would represent a 4.1 percent reduction from current funding levels once all the downward revisions are tabulated.

The revised budget figures were required when projected state tax collections were downgraded Friday by $130 million through June 30 and by another $270 million for fiscal 2010.

Dvorsky said the latest fiscal 2010 spending targets are $330 million below the current year budget that lawmakers passed in April 2008 before Iowa was ravaged by record disasters and national recession. Next fiscal year's proposed spending level would be about $95 million below the state's general fund spending level of two years ago.

“This is worse than most people thought for 2010,” Dvorsky said “I'm afraid there's going to be layoffs and other things.”

Steve Ovel, a Kirkwood College executive who lobbies for all 15 Iowa community colleges, said each institution is trying to assess the potential impact on staff, program elimination and tuition increases.

“This is going to be a real challenge to address cuts of this magnitude,” Ovel said. “I think for all of us it's going to involve potential, significant staff reductions.”

Ovel said Kirkwood officials had hoped to hold tuition increases next school year to $4 per credit hour, but under the new circumstances that 3.9 percent raise will be subject to review.

“The last thing we would want to do is to have to raise tuition dramatically at a time when we have more and more Iowans coming to us for job skill upgrading, many, many more displaced workers,” he said. “Our demand is going up at a time when our state support is going down dramatically. It's a very bad combination.”

The deeper spending cuts that are being proposed are the result of last Friday's state Revenue Estimating Conference decision to lower the expected state tax collections by about $130 million through June 30 and another roughly $270 million for fiscal 2010.

Charles Krogmeier, Culver's chief of staff, said the governor is hopeful the state will have enough federal stimulus money for education and Medicaid to keep this fiscal year's budget balanced through June 30 without making further spending cuts or tapping state reserves.

“I think it's realistic,” he said.

Krogmeier said the governor's staff is formulating a spending plan that would cover the three fiscal years through June 30, 2011, to get a long-range view of the funding outlook through the life of the federal stimulus program.

The governor would like to maintain commitments made for school aid and Medicaid through fiscal 2010 and to avoid tapping state reserves more than $200 million in that fiscal year.

“It's going to be a moving process,” Krogmeier said. “It's going to be fluid.”

Krogmeier said discussions with lawmakers would focus on where in the fiscal 2010 budget they were looking at double-digit cuts and how much funding could be “back-filled” in areas of critical need.