DES MOINES – In the midst of the worst national economic recession since the Great Depression and while many Iowans are still recovering from the disasters of last year, Governor Chet Culver and Lt. Governor Patty Judge today submitted their $6.2 billion budget for fiscal year 2010. The proposal recommends further budget cuts – rather than tax increases – to help meet the challenges of declining state revenues.
“In recent months, we have reduced state government spending by nearly $180 million in order to maintain a balanced budget,” said Governor Culver. “Those steps addressed our revenue declines during the current fiscal year, but more cuts are necessary. Today, I am submitting my fiscal year 2010 budget proposal to the Iowa General Assembly. In this economic climate, it will mean that state government – like families and businesses across the state and nation – must truly do more with less. “
“My budget proposal for fiscal year 2010 will reflect a 6.5 percent cut to almost every state department and program,” the Governor continued. “In fact, 207 of the 253 line items in my budget proposal will be cut by 6.5 percent. That represents a savings of $400 million to Iowa taxpayers.”
Lt. Governor Judge commented on Iowa’s economic strength when compared to the rest of the country.
“Iowa is not alone. 44 other states are either in or heading towards deficits that will total more than $140 billion,” said Lt. Governor Judge. “In fact, many neighboring states are measuring deficits in the billions of dollars. Though the cuts we must make our tough, years of sound fiscal policy and conservative budgeting principles put Iowa in a better position than many other states.”
While more than 80% of state programs will be subject to the reduction, the Governor has identified the following key priorities, which will be exempted from its full effects:
· Corrections: appropriations for the Department of Corrections;
· Education: appropriations for teacher quality and pre-school education and a 2-percent allowable growth;
· Glenwood Resource Center: appropriations to meet requirements of the Department of Justice reviews;
· Homeland Security: appropriations for the State’s FEMA match for federal disaster relief;
· Human Services: appropriations for Medicaid, Hawk-I, Child and Family Services;
· Public Safety: appropriations for the Department of Public Safety;
· Victims Compensation: appropriations for the Attorney General to help reimburse crime victims; and
· Workforce Development: appropriations for the Department of Workforce Development to help the unemployed.
When preparing the budget, Governor Culver and Lt. Governor Judge followed three principles
· No increase in taxes;
· No federal economic stimulus funds, which are yet to be finalized by the President and Congress, are to be included; and
· In addition to $56 million in Fiscal Year 2009 for disaster relief, $200 million in Fiscal Year 2010 are to be transferred from the Reserve Funds.
The cuts proposed in next year’s budget are in addition to nearly $180 million in spending reductions proposed by the Governor to the current budget. In December, he made selective cuts of $40 million and on January 1 a 1.5 percent across-the-board cut went into effect totaling approximately $90 million. In addition, Governor Culver has requested the legislature de-appropriate $37 million for a new state office building and approve transferring another $10 million to the General Fund.
Governor Culver also expressed concern over recent job losses in the state. Yesterday, Iowa Workforce Development announced unemployment had risen to 4.6%, which is up from 4.3% a month ago and 3.8% a year ago. Over the last 12 months, 9300 professional and business services jobs, 7000 manufacturing jobs, and 3800 construction jobs were lost. In total, 77,000 Iowans are currently unemployed.
The Governor said this news underscored the need for his top legislative priority, the $700 million Rebuild Iowa Infrastructure Authority. The plan utilizes Iowa’s AAA bond rating to leverage state funds for infrastructure investment, which will create new jobs and rebuild Iowa’s aging infrastructure.
“Creating the Rebuild Iowa authority will also allow us to build upon federal stimulus and flood recovery funds our state might receive and, when fully leveraged, this $700 million investment will lead to billions of dollars of projects to improve our state,” said Governor Culver. “So while we’re cutting day-to-day expenditures of state government, we will invest in creating jobs, supporting businesses, and strengthening our economy. And we’re in a position to do it without raising taxes.”
Governor Culver added that, like most Iowans, he is optimistic about the future.
“Our strong fiscal management means the state has its largest cash reserve, the highest possible bond rating, and one of the lowest public debts in the nation. Iowa is in a better position to grow our economy and get through this recession than any other state in the nation,” said Governor Culver. “But that does not mean we can avoid cutting government spending, holding the line on taxes, and changing the way government does business. If we make these tough decisions now, I believe we will not only get through this national economic crisis, but we will come out of it stronger and better prepared for the future.”
To view the full budget, please visit www.governor.iowa.gov.