Branstad asks agencies to submit status quo budgets

DES MOINES - Gov. Terry Branstad said Monday he has asked state agencies to submit budgets with no spending increases for the coming fiscal year.

Branstad is in the midst of holding budget hearings with various state departments. The governor then will craft his budget and present it to the Legislature in January. Iowa is expected to see another modest increase in state revenue, according to the state's fiscal estimating agency. But that agency already has reduced its outlook once and will deliver one more estimate in December; that number will drive the state budget.

'We've said that we would like (state agencies) to look at no increase in light of the revenue situation, but obviously, we're going to listen to concerns and ideas they have,” Branstad said Monday during his weekly news conference with reporters. 'We have, from time to time, had agencies that have actually reduced their budget.”

Earlier this month, the state's Revenue Estimating Conference lowered its revenue estimate by $125 million, but state receipts have been holding close to the panel's prediction of a 4 percent increase over the current fiscal year.

Built-in increases in various areas of the state budget are projected to eat up all new revenue, according to analysis by House Republicans. In paritcular, Republicans said, the increase is driven by health care spending, a K-through-12 teacher-leadership program and compensation to local governments for a commercial and industrial property tax cut.

'It's a tight budget year, but because of the tough decisions that we've made over the last five years, Iowa is in one of the strongest positions of any state,” Branstad said. 'Revenue is below what we expected it would be. Despite that, I think we can meet our obligations, but we're going to have to be very careful and very frugal in order to be able to manage.”