Budget committees start looking for cuts

DES MOINES – New-found angst descended on legislative budget meetings Tuesday as lawmakers began cutting programs to fit revised revenues and agencies considered what to do without.

“We're bracing for the worst, but trying to find the silver lining in all this,” said Cyndi Pederson, director of the state Department of Cultural Affairs, who worried lower spending targets by $673,000 would force her to lay off about 25 seasonal employees and close historic landmarks this summer.

“It is what it is and we can sit back and have pity parties upon ourselvers or we can sit down and say, OK, let's put it all out on the table,” she said. “If we can't figure it out, no one can. We're the creative thinkers.”

However, House-Senate budget subcommittee leaders conceded it's probably also going to take employee layoffs, service cutbacks, program elimination and other measures to balance the fiscal 2010 budget in light of large-scale revenue declines.

“It's probably a combination of selective and discretionary cuts,” said Rep. Todd Taylor, D-Cedar Rapids, co-chairman of the justice systems budget panel that must reduce next fiscal year's spending by another $21 million to meet its target.

“That's a very difficult number to reach,” he added. “Where can we do this and have the least amount of harm happen to one area – that is our theme.”

Spending levels weren't the only areas getting increased scrutiny Tuesday. Top senators said they are looking for at least $30 million in revenue boosts by capping tax credits that Gov. Chet Culver proposed in his January budget plan.

Sen. Joe Bolkcom, D-Iowa City, chairman of the Senate Ways and Means Committee, said majority Democrats are considering a cap on overall contingency tax credits and keeping the research & development tax credit as fully refundable but not doubling it in future years. Possible increases in court penalty fees also are under discussion.

Sen. Jerry Behn, R-Boone, said the state's budget woes are not on the revenue side of the ledger. The problems are rooted in too much state spending and Democrats are howling about having to cut when the reality is “they're just not going to be able to spend as much as they want.”

Even if majority Democrats had held spending increases to twice the rate of inflation the past two years, the general fund would have a surplus now rather than a deficit, Behn said.

Sen. Bill Dotzler, D-Waterloo, co-chairman of the economic development budget panel, said the current budget crisis is rooted in the fact the state has been hit with the worst drop in state revenues since the Great Depression.

“These decisions are going to be difficult to make, but we have to make them,” said Dotzler, whose target was chopped another $2.1 million on Monday. “We are going to take a step back on economic development.”

Pederson said her agency could be in line for about $300,000 in federal stimulus funding, but she worried things like funding for the arts – which she called the frosting on the cake -- is “an easy target” when lawmakers start looking for budget areas to cut.

“I certainly hope that everyone has to share in the pain,” she said. “We're all in this together and I think there should be no immunity necklace.”

Pederson said quality of life amenities are closely tied to workforce issues, but the spending cuts anticipated likely will mean seasonal layoffs that will prevent summer openings of the Abbie Gardner Sharp Cabin in Spirit Lake and the Montauk mansion in Clermont unless volunteer help can be found.

“It's a tough situation. Most people believe in government and believe that we're providing the services that people want and, when you have to go in and cut those, nobody wants to do that,” said Sen. Bob Dvorsky, D-Coralville, chairman of the Senate Appropriations Committee.