GOVERNOR CULVER: FY2009 BUDGET BALANCED

DES MOINES – Governor Chet Culver announced today that the Iowa Department of Management has closed fiscal year 2009 with a balanced budget.

“The national economic recession has created challenges for state governments across the country, but we kept our word to the taxpayers of Iowa and ended a tough financial year with a balanced budget,” said Governor Culver. “We did it without raising taxes, like many states have done, and we did it without holding a special legislative session, like many critics said would be needed. We did it because, in good times and bad, we’ve managed the state’s finances.

Governor Culver added: “In spite of the economic challenges brought on by the world-wide recession, and a projected shortfall for the fiscal year 2011 budget, Iowa not only has a balanced budget for fiscal year 2009 but a budget surplus of well over $450 million for the current fiscal year.”

Based on revenue projections made by the Revenue Estimating Conference (REC) over the past year, Governor Culver directed a 1.5 percent across-the-board budget cut and took other measures totaling nearly $180 million throughout FY2009.

The following chart indicates the final differences in actual state revenue compared to the REC’s most recent estimates:

Categories Below Revenue Estimating Conference

• Gross Receipts $57.7 million
• Refunds $43.9 million
• Changes to SILO $31.3 million

Categories Above Revenue Estimating Conference

• Accrued Revenues (Net) $20.3 million
• General Fund transfers $8.3 million

In addition to the above figures, $12.4 million in reversions and $1.9 million in adjustments to standings contributed to the balanced budget.

Finally, the FY 2009 budget included a projected ending balance of $44.7 million.

Governor Culver today signed an Executive Order to authorize the transfer of $45.3 million from the state’s Emergency Fund. Under Iowa Code section 8.55, Iowa Governors have the authority to transfer up to $50 million to balance budgets at the end of the fiscal year.

“As Governor, I am going to take the steps necessary to balance the state budget without putting the burden on Iowa taxpayers,” added Governor Culver. “We cut state spending while holding the line on taxes last year, and I will take that same approach this year. We are not going to overreact or under react but will do what is necessary to maintain Iowa’s financial strength in the midst of this national economic recession.”

The next REC meeting is scheduled for October. 7.

NOTE: Below is a copy of Executive Order 18, signed today by Governor Culver

EXECUTIVE ORDER NUMBER 18

WHEREAS, the State Revenue Estimating Conference (REC) reduced its Fiscal Year 2009 net General Fund revenue estimate at the December 12, 2008, meeting by. 1.6 percent from $6.151 billion to $6.052 billion; and

WHEREAS, as a result of the December 12, 2008, REC meeting, I issued a uniform reduction, as required in Iowa Code section 8.31, of 1.5 percent, or $89.1 million, while also imposing additional expenditure reductions and recommendation on program eliminations to bring the State General Fund back into balance; and

WHEREAS, the REC, again, reduced its Fiscal Year 2009 net General Fund revenue estimate at its March 20, 2009, meeting, by 1.3 percent from $6.052 billion to $5.970 billion; and

WHEREAS, as a result of the March 20, 2009, REC meeting, I negotiated with the Iowa General Assembly and signed into law, a Fiscal Year 2009 General Fund budget that was balanced and had a positive ending balance; and

WHEREAS, since the March 20, 2009, REC meeting, as a direct result of the national recession, gross state revenues unexpectedly and precipitously declined in May and June – the last two months of Fiscal Year 2009 – by $77.6 million; and

WHEREAS, the Department of Management has informed me, as expected, that a transfer from the State’s Economic Emergency Fund established in Iowa Code section 8.55, would be necessary to balance the Fiscal Year 2009 State General Fund; and

NOW, THEREFORE, I, Chester J. Culver, Governor of the State of Iowa, by the power vested in me by the Constitution and laws of the State of Iowa, do hereby order the transfer of $45.3 million from the State Economic Emergency Fund to the State General Fund, as provided under Iowa Code section 8.55. The Department of Management shall take all necessary steps under Iowa law to effectuate these transactions. Actions taken by the Department of Management to implement this order shall commence on September 25, 2009.

GOVERNOR CULVER APPOINTS FRED HUBBELL AS INTERIM DIRECTOR OF IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT

Joe O’Hern Appointed Interim Deputy Director at IDED

DES MOINES – Governor Chet Culver today announced that Fred S. Hubbell has agreed to serve as the interim director of the Iowa Department of Economic Development (IDED). Hubbell, of Des Moines, has led global companies as well as civic initiatives in Iowa. Because of previous commitments, he will begin the interim appointment on October 5.

In addition, Governor Culver announced that Joe O’Hern, deputy director at the Iowa Finance Authority (IFA), will serve as interim deputy director at IDED, focusing on IDED’s flood recovery efforts.

“The history of the Hubbell family runs parallel to the history of Iowa, and I am honored that someone with Fred’s experience, integrity and commitment to our state will serve in this key position,” said Governor Culver. “Fred’s leadership will help us ensure that proper oversight is in place for IDED programs. And he will play a vital role in our work to support business and job opportunities to help Iowa work our way out of the economic recession.”

“Economic development in Iowa is a critical engine for growth,” said Interim Director Hubbell. “I look forward to helping both Governor Culver and the department address this issue and focus on what IDED does well, which is creating and retaining jobs.”

Added Culver: “Joe O’Hern’s experience makes him an important addition to IDED. He will focus on making sure progress continues with our housing initiatives, the use of CDBG funding, and other initiatives critical to our flood recovery efforts.”

Hubbell has a long history of service to the people of Iowa. He was appointed to serve as chair of the Iowa Power Fund Board by Governor Culver in 2007, and will continue to serve on the board as the representative of IDED. In addition, Hubbell was appointed co-chair of the Iowa Disaster Collaborative, which raised millions of dollars on behalf of those affected by last year’s natural disasters.

Hubbell was a member of the Executive Board and Chairman of Insurance and Asset Management Americas for ING Group, a Netherlands-based banking, insurance and asset management company. Hubbell served as an Executive Board member from May 2000 through April 2006. He was also responsible for Nationale Nederlanden, ING’s largest Dutch insurance company, and ING’s asset management operations throughout Europe beginning in May 2004. Mr. Hubbell retired from ING Group’s Executive Board in April 2006.

Hubbell was formerly Chairman, President and Chief Executive Officer of Equitable of Iowa Companies, an insurance holding company, serving as Chairman from May 1993 to October 1997, and as President and Chief Executive Officer from May 1989 to October 1997. Hubbell served in various capacities with Equitable of Iowa Companies since 1983, in addition to serving as Chairman of Younker’s.

O’Hern is a graduate of Princeton University who spent more than 20 years drafting legislation in the Iowa legislature. President Bill Clinton nominated him to serve as the regional representative for the U.S. Department of Housing and Urban Development in Kansas City, KS. After a number of years at HUD, he took a newly created position as head of the Fannie Mae Partnership Office in Iowa, where he helped non-profit housing groups build more and better housing for low-income families. During his time at IFA, he was appointed to the Governor’s Rebuild Iowa Task Force to help coordinate efforts in rebuilding communities after the natural disasters of 2008.