Culver expects budget adjustments

DES MOINES – Gov. Chet Culver said Tuesday that slumping state revenues could force him to cut state spending and dip into cash reserves to weather the national economic downturn.

The governor signaled that belt-tightening measures likely will be coming to state agencies once the Revenue Estimating Conference meets next month to revise its economic outlook and projections for future state tax collections.

Culver noted he ordered a 1.5 percent across-the-board cut last year when state tax collections slipped below estimates to shore up the state budget until lawmakers reconvened in regular session in January. A similar scenario may be in store for agency budgets again this fall, he said.

“That's something I would seriously consider doing,” Culver told reporters.

“I've done it before and I'll do it again in terms of making any and all cuts necessary to balance the budget and to find a way to efficiently deliver services while investing, through programs like I-JOBS, in our infrastructure that's going to create jobs without raising taxes,” he added.

Culver also said state budget-makers also might have to use a share of the state's $400 million cash reserve to bridge budget gaps already aided by hundreds of millions of dollars in supplemental funding via the federal economic stimulus package.

“It will be a combination of using some of that reserve in all likelihood and additional cuts,” he added.

Republican lawmakers and gubernatorial candidates have contended Culver and majority Democrats in the Legislature overspent given the current recessionary conditions that have driven up unemployment and threaten to force higher taxes to sustain government growth.

Culver has nixed GOP calls for a special legislative session to address budget concerns, saying he has the statutory authority to make transfers if necessary to balance a fiscal 2009 revenue shortfall and to order cuts to current agency budgets if the Oct. 7 REC meeting indicates immediately action is needed.

The governor said it was “premature to speculate” how deep an across-the-board cut might be needed to keep the fiscal 2010 budget in balance through next June 30. He also said fiscal 2011 budget askings be formulated by state agencies this month should be “less than status quo” given the economic realities.

“We're going to have to tighten the belt even more, there's no question,” Culver said.