Culver budget plan holds tax line, funds new spending

Gov. Chet Culver today unveiled a “realistic” $5.321 billion budget plan that uses cuts, savings and one-time sources to fund priorities in education, health care, jobs and public safety in fiscal 2011.

“Our fiscal 2011 general fund budget is balanced, fiscally conservative and does not raise sales or income taxes,” Culver and Lt. Gov. Patty Judge said in making spending recommendations to the General Assembly.

Culver's proposed budget would restore nearly $65 million for the current fiscal year to higher education, corrections and other budget areas and fulfill his pledge to boost K-12 school aid by 2 percent plus an extra $100 million from the cash reserve, fund preschool and kids health care, boost Medicaid commitments and stave off layoffs in corrections and public safety with increased spending in those areas.

“While the economic downturn and unemployment levels are serious, Iowans have not abandoned their spirit of pragmatic optimism – and neither should we,” Culver said. “We are cautiously hopeful that conditions are improving and that better days are ahead of us. Nonetheless, our fiscal 2011 budget recommendations are based on a realistic view of our economy.”

The governor's overall proposed spending level represented an increase of four-tenths of 1 percent above this year's revised funding level and requires using $207.5 million in one-time reserves, $48 million in federal stimulus funds and $341 million in projected savings from government reform and reorganization efforts to balance the fiscal 2011 general fund ledger.

Many state departments and agencies will be unchanged or reduced next fiscal year below the revised spending areas that were pared by 10 percent last fall due to an unexpected plunge in state tax collections, said Sen. Bob Dvorsky, D-Coralville, chairman of the Senate Appropriations Committee.

“There are essentially challenges at every angle and we'll just have to work through the process,” Dvorsky said. “I think it's a good starting point. It's a tough, tough year. Anyway you look at it, there's going to be many tough, difficult decisions to be made.

“It's a good road map,” he added. “Now, it's the Legislature's job to craft a budget. The governor makes recommendations, but it's our job and we'll do it.”

Culver asked legislators to cut $52.5 million in state tax credits for fiscal 2011 and limit overall spending to 97.8 percent of next year's projected revenue estimate to produce an ending balance of $117.3 million and cash reserves of $265.2 million by June 30, 2011.

The governor's spending plan also includes $150 million for job-creation efforts using bonding authority approved by lawmakers last year. Culver also would commit another $25 million to the Power Fund to expand Iowa's alternative energy but would pare back Grow Iowa economic development investments to $45 million next year.

Culver asked lawmakers to provide $36.4 million in supplemental spending for regent universities and community colleges yet this fiscal year and a similar increase for fiscal 2011 to meet the state's match to qualify for federal economic stimulus help.