Branstad: Culver in 'state of denial' about budget

CEDAR RAPIDS -- Terry Branstad, who weathered state budget crunches during the farm crisis of the 1980s, doesn't think Gov. Chet Culver understands the seriousness of Iowa's fiscal troubles.

"It's just like he's in a state of denial," the four-term Republican governor said about Culver's response to indications the state will not have enough cash on hand to cover the state's bill when the fiscal year closes June 30.

The non-partisan Legislative Services Agency has raised concern that the 45 million ending balance lawmakers anticipated when they adjourned and the governor's authority to transfer up to $50 million from reserves without legislative approval may not be enough to cover the budget hole at the end of the fiscal year.

"And (Culver) is acting like it's no problem," Branstad said about the first-term Democrat.

Culver continued to take that tack in western Iowa Wednesday, saying the state still has $440 million in reserve and "we're probably going to have to use a fair share of that in the next 12-18 months" to weather tough budgetary times.

"We still feel very good that we're going to balance in '09, but we're watching it closely," Culver said in Atlantic. "We should be alright."

Branstad, now president of Des Moines University, said Culver and Democratic legislative leaders, who have "dug a huge financial hole" for the state without a plan to put Iowa back on firm fiscal footing.

Minority Republicans, who voted against all of the budget bills in the 2009 legislative session "stood up against some of the worst budgeting decisions I've ever seen," Branstad said Wednesday before addressing the Cedar Rapids Noon Rotary Club meeting at the Scottish Rite Temple.

Culver is optimistic that Iowa would be among the first dozen states to bounce back from the recession more quickly than much of the country.

Culver said he will watch the September Revenue Estimating Conference fiscal projections before deciding if further spending reductions may be in order. He hoped no more changes will be required, but "we'll adjust" if need be.

Culver should follow his lead and undertake a "major restructuring downsizing of government and reform government spending," Branstad said.

Culver said he plans to work with the legislative committee looking at streamlining government and expects to have recommendations for reorganizing and improving efficiencies early in the 2011 session.

"He needs to bring in outside people with knowledge and expertise to do an organizational audit of government at all levels," Branstad said. "He should use this economic challenge as an opportunity to reduce the size and cost of government, but also to make it more efficient and accountable."

Gazette Des Moines Bureau Chief Rod Boshart contributed to this story