State closing rocky budget cycle

DES MOINES – The state's budget situation is ending fiscal 2010 better than Gov. Chet Culver could have imagined when he ordered an unprecedented 10 percent across-the-board cut in spending last October.

The 12-month fiscal period that ended Wednesday saw state tax collections plunge, revenue projections repeatedly revised and spending levels slashed as the worldwide recession played havoc with government balance sheets.

While state revenue has not rebounded, it appeared the gross receipts were down slightly more than 3 percent from fiscal 2009 and in better shape than the 5.7 percent decline set by the state Revenue Estimating Conference in March. That likely will mean a larger ending balance when the fiscal 2010 budget books are officially closed in September.

“It looks like we're going to have as much as $100 million above projections at the end of the fiscal year in terms of revenue,” Culver told reporters Wednesday. “We're going to have $500 million in our cash reserves and our emergency funds and our ending balance. We're better positioned than any state in America today in terms of economic recovery.”

Culver credited tough decisions made last fall to cut state spending by $564.4 million with a 10 percent across-the-board reduction to executive-branch agencies and help from the Legislature in identifying $275 million in savings via government reorganization and efficiencies that included an early-retirement incentive that attracted about 2,100 participants.

“We're coming out of this recession and our revenue is starting to pick up,” the governor said. “We've made the tough decisions, we have a balanced budget and we're growing as fast if not faster than any state in America. We are on our path to a strong, vibrant recovery where we'll create jobs all over this state. We've got a ways to go, but we've made enormous progress.”

Republicans, including Culver's 2010 GOP opponent Terry Branstad and State Auditor David Vaudt, have criticized Democrats' spending policies and their response to state budget woes, saying they have resulted in a $136 million increase to property taxpayers shouldering higher education costs. GOP lawmakers also criticized plans to fill a sizable share of the state jobs vacated by early retirements with new hires.

Culver noted that he and Democrats who control the Legislature restored about $330 million in cuts to K-12 education last session and passed a directive for school districts to tap local cash reserves or find efficiencies before turning to property taxes to cover reductions in state aid. Even decisions that led to higher property tax levies were made locally, he said.

The governor also said a number of positions involving the delivery of essential services, such as correctional officers assigned to state prisons or public safety jobs, where long-time state employees left due to retirements must be filled with new hires to maintain vital functions of state government.

Comments: (515) 243-7220;

rod.boshart@gazcomm.com