Culver urges spending on schools, jobs; show us the money, say state legislators

State lawmakers generally applauded Gov. Chet Culver's call Tuesday to pump more state money into schools, job creation and other areas but wondered how much of his blueprint is affordable right now.

During his Condition of the State address, Culver proposed funding a 2 percent increase promised to K-12 public schools next fiscal year and using at least $100 million in surplus reserves to restore some of the money cut this school year. Funding the 2 percent increase would cost about $70 million.

“This will be a real shot in the arm for some of our schools, especially in rural districts, which are already cash-strapped with depleted reserves,” the governor said in an address to the Iowa Legislature and a statewide television audience.

Culver, a first-term Democrat facing a tough re-election battle in November, also pushed efforts to create more jobs, especially “green-collar” renewable energy positions, to enhance job-training programs and to fund public safety, health care for children and veterans' services.

Senate President Jack Kibbie, D-Emmetsburg, called the governor's speech “very good, probably the best one he ever gave” and one that sounded the right themes, especially for growing jobs at a time of high unemployment and economic recession.

By contrast, Rep. Nick Wagner, R-Marion, said “a lot of his numbers don't add up. Continued spending with lower revenues just isn't possible.”

During his 40-minute speech, the governor implored lawmakers to do all they can to support community colleges, private colleges and regent institutions in the face of the state's most difficult budget situation - a funding gap created by eroding tax collections, the recession and past spending decisions.

Culver also asked lawmakers to require that school districts use cash reserves and cost-cutting measures before using increases in property taxes to fund shortfalls. His message also sought $15 million to fund the fourth year of expanded preschool opportunities statewide.

“As governor, and as a former teacher, my commitment to education transcends even our most difficult budget challenges,” Culver said in supporting the 2 percent “allowable growth” commitment and using state reserves to restore some school funding that fell victim to his 10 percent across-the-board cut in October.

House Speaker Pat Murphy, D-Dubuque, said he was supportive of the governor's goals, but lawmakers will reserve judgment until they see the entire fiscal 2011 budget plan. He noted it would be difficult to say no to various groups seeking increased state funding if schools get surplus money.

“I think a commitment to 2 percent is just what we need for the basic foundation of education,” said Brad Hudson of the Iowa State Education Association. “That's a great first step, and it shows a commitment to the children of Iowa and the public schools of Iowa.”

However, Senate GOP Leader Paul McKinley of Chariton said the governor's approach will continue to saddle property owners with higher taxes.

“I reject the notion that Gov. Culver has balanced the budget without raising taxes,” he said. “Iowans are faced with the reality of higher property taxes, and they know better than to believe the governor's hollow rhetoric.”

To fund his education priorities, Culver asked the Legislature to embark on a major overhaul of state government to squeeze hundreds of millions from current operations through increased efficiencies and service-delivery reforms.

Troy Price, Culver's spokesman, said details of how the governor plans to fund state government in fiscal 2011 will be unveiled when he submits his budget proposal to lawmakers by the end of January.

“We've always believed that education is the top priority and the top responsibility of state government,” said Senate Majority Leader Mike Gronstal, D-Council Bluffs. “We support that priority, but we anxiously await his budget document to see how he gets that done and to figure out what we can do.”

K-12 schools lost $227.2 million this fiscal year when Culver ordered cuts to keep the budget balanced after projected tax collections took a nose dive. Per-pupil funding for K-12 education stood at $5,768 this school year and is expected to increase to $5,883 per student in fiscal 2011.

According to the Legislative Services Agency, the state is projected to have $406.2 million in reserve and $135.4 million in its economic emergency fund at the end of the current fiscal year. That assumes a $156.3 million transfer from the projected June 30 ending balance.

Culver touted his I-JOBS infrastructure effort - $830 million in state bonding - that will help rebuild Iowa roads, bridges and other systems and help restore communities devastated by the state's worst natural disaster in 2008. He and lawmakers will decide how to spend another $100 million of uncommitted bonding authority this session.

The governor requested funding for community college job-training programs, continued support for the Iowa Power Fund and to provide the Iowa National Guard “every tool they need.” He also sought authority to shift $50 million annually from the Road Use Tax Fund to finance the Iowa State Patrol's operations.

To accomplish all he set out to do, Culver urged lawmakers to adopt many of the recommendations by a consulting firm to achieve up to $1.7 billion in savings over the next five years by reforming, streamlining and downsizing state government. He noted he already signed an executive order designed to save up to $140 million next year and nearly $500 million over the next five years.