Iowa House leader expects equally large budget cut next fiscal year

MIKE GLOVER

Associated Press Writer

DES MOINES, Iowa (AP) - Attention has been focused on Gov. Chet Culver's plans to cut $565 million from the state's budget, but a House leader said Thursday that legislators will probably have to make an equally large cut to the following year's budget.

House Majority Leader Kevin McCarthy speculated there would be at least a $500 million shortfall in the fiscal year beginning July 1.

"It's going to be a very grim scenario," said House Majority Leader Kevin McCarthy, D-Des Moines. "That's just the reality of the economy we're in."

To meet immediate budget needs, Culver has ordered a 10 percent across-the-board cut in state spending that includes mandated seven-day unpaid furloughs for 3,258 workers not covered by union contracts. For the average state worker, that furlough will drain about $1,400 from his or her annual income, aides to Culver said.

Widespread layoffs also are planned, and Culver has asked leaders of state employee unions to reopen contracts to find savings or face even more job cuts.

Once the state gets beyond the current round of cuts, another shortfall likely will loom in the next fiscal year.

"The stark reality is we're going to have to cut more," McCarthy said. "Every entity is going to have to share in the pain."

McCarthy said one task facing legislative leaders is explaining to other lawmakers the depth of budget problems the state faces. Many likely don't realize how difficult the session beginning in January will be, he said.

Sen. Bob Dvorsky, D-Coralville, who heads the Senate Appropriations Committee, said he understands the situation.

"Right now it doesn't look very good," he said.

Dvorsky said the cuts coming this fall will be clear to Iowans, with results likely ranging from higher tuition at state universities to waiting lists in the state's court system.

"There's a historic drop in state revenues and that means a historic drop in state services," Dvorsky said.

Even though statistics indicate the national economy is crawling out of the recession, Dvorsky noted that Iowa's economy usually suffers downturns after the rest of the country and emerges from them late as well.

Copyright 2009 The Associated Press.