Culver experts confident budget will balance

DES MOINES – Gov. Chet Culver's budget experts expressed confidence Tuesday the state's fiscal 2009 budget will end with a positive balance even in the face of eroding tax revenues.

“We think we're in a position that the governor will be able to balance the budget with the tools he has at hand,” Culver's budget director Dick Oshlo told reporters during a fiscal briefing.

“We believe it's manageable and there will not be a need for a special legislative session,” he added.

Culver's budget team members said the state's fiscal position has worsened since the state Revenue Estimating Conference issued revised tax receipt projections in March. However, they estimated gross tax receipts will be about $60 million less than what the three-member panel projected for the 2009 fiscal year, which ended Tuesday.

The Legislative Services Agency, which issues its year-end revenue report Wednesday, posted a running daily total that indicated net state tax collections would be 5.4 percent less than fiscal 2008 – with each percentage points representing $59 million.

Before adjourning in April, state lawmakers adjusted the fiscal 2009 budget to finish with a $44 million balance. The governor also has authority to transfer $50 million in surplus reserves if need be to assure a positive balance when the fiscal 2009 books are officially closed by the end of September.

Oshlo said accrued funds, reversions and various transfers, along with the ending balance and transfer authority should provide the flexibility needed to balance the fiscal 2009 budget, but LSA revenue analyst Jeff Robinson was unsure based on the eroding tax collections.

“That's a question that makes people nervous. I don't have an answer,” he said. “This doesn't look good, but the year's not over.”

Tuesday's revenue sheet noted that personal income tax refunds were up nearly 21 percent over fiscal 2008 and corporate income tax refunds were up 48.5 percent. However, Culver budget experts said some of those transfer accounts still were below REC expectations.