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Iowa Politics Roundup: Culver Proposes $5.3-Billion Budget PDF Print E-mail
Commentary/Politics - Iowa Politics
Written by Lynn Campbell   
Friday, 29 January 2010 15:45

Governor Chet Culver has proposed a $5.3-billion state spending plan for Fiscal Year 2011 that uses more than $200 million from the state's cash reserves and $48 million in federal stimulus money, while reducing tax credits by $52.5 million and saving $341 million from state-government reorganization.

Culver said the budget would leave an ending balance of $117.3 million and would leave $265.2 million in the state's cash reserves.

"We have achieved this lower budget by continuing the 10-percent across-the-board budget cut made last fall in Executive Order 19 for most of the General Fund budget," Culver said. "Only 31 percent of programs or agencies would receive any increases over the revised FY 2010 budget ... reflecting the need to reduce state-government spending while preserving critical services for protecting vulnerable adults and children."

Culver's budget recommendations include a $6.9-million increase for the Department of Public Safety to prevent potential layoffs of up to 122 people, and a $25-million increase for the Department of Corrections to avoid layoffs at state prisons.

Other states are counting on additional federal stimulus money to help balance their budgets, while Culver's proposed Fiscal Year 2011 budget does not, Chief of Staff John Frew told reporters.

"The states of California, Arizona, Alabama, and Georgia ... have submitted their budget assuming that the federal government is going to extend additional money for Medicaid and stabilization. More stimulus money," Frew said. "We are in a position to believe that there will be additional funds for FMAP [Federal Medical Assistance Percentages] or Medicaid, but we've not included that in here. If it comes about, we'll know in a couple of months that there's additional money, then we'll visit that."

Culver's budget does include federal stimulus money left over from last year. That includes $94 million for FMAP or Medicaid and $48 million for government and education stabilization.

Frew also said a 7.1-percent across-the-board budget cut last fall would have balanced the state's budget, but the 10-percent cut has given the state a combined $382 million in the ending balance and reserves.

Democratic leaders praised Culver's budget for tightening the state's belt without raising taxes, while Republicans said the budget will lead to an increase in taxes.

House Minority Leader Kraig Paulsen (R-Hiawatha) said: "The governor's budget spends more money than it takes in and will increase the burden on property taxpayers. Once again, decisions in Des Moines are going to drive up property taxes across the state. It's irresponsible and will be costly for Iowans."

"This is just a continuation of the governor not living within his means," said Senate Minority Leader Paul McKinley (R-Chariton). "We've seen approximately $250 million worth of one-time funding. What this does is create a major problem down the road."

Reorganization Bill Key to Legislative Budget Work

The day after Culver submitted his budget, top legislative Democrats said they see the 252-page government-reorganization bill that's moving through the legislature as crucial to kicking off their own budget work.

The bill is scheduled to be debated by the Iowa Senate and House in the first two weeks of February, legislative leaders said Thursday.

"This reorg bill, or a pretty good handle on what's going to end up being in the reorg bill, is a critical piece for us to figure out what the targets are that we're going to give to our budget subcommittees," said Senate Majority Leader Mike Gronstal (D-Council Bluffs). "We're moving quickly on that legislation so that we've got a handle on what the savings are."

An early-retirement bill was approved Thursday afternoon by the House State Government Committee and was slated for passage by the full House within a few days. The committee will tackle government reorganization next.

"We feel like we need to know what our cost savings are both from early retirement and from state reorganization before we can proceed on the budget," said House Speaker Pat Murphy (D-Dubuque). "Those two things need to be done first."

Culver said most of his 50 cost-saving recommendations are not included in the bill, accounting for a difference in how much it will save.

Culver challenged the legislature to find another solution to the state's budget shortfall if lawmakers choose not to approve his recommendations for government cost savings, efficiencies, and reorganization, which he said would save $341 million.

Democratic leaders peg savings from Senate File 2088 and early retirement at $200 million, and a fiscal note shows savings as much less than that.

"We're continuing to work with the executive branch; there will be elements of those recommendation that will probably show up inside budget subcommittees," Gronstal said.