Gov proposes budget that’s 6.5 percent smaller than this year’s

UPDATE:  Listen to Culver explaining his budget plan here. 

Iowa's governor has made his state budget proposal public.  Here's the news release issued this evening:

GOVERNOR CULVER: CUT SPENDING, CREATE JOBS, NO NEW TAXES

Governor Recommends 6.5% Cut to Most State Programs

DES MOINES – In the midst of a national economic recession, Governor Chet Culver will recommend reduced state spending and no tax increases in his fiscal year 2010 budget proposal, he said in a speech today to the annual meeting of the Iowa Business Council. The Governor also spoke about the need for the state to invest in creating jobs and rebuilding Iowa’s infrastructure.

“Our State’s sound fiscal management does not mean we can avoid cuts in government spending,” said Governor Culver. “Simply put, just as families and businesses across the state and around the nation are doing more with less, so too must state government.”

In his remarks to the group of state-wide business leaders, Governor Culver discussed key points in his recommended FY2010 budget, which will include a 6.5 percent reduction in spending for most State programs. Complete details of the proposed FY2010 budget will be released on Wednesday.

“While the current economic circumstance is not the fault of Iowans, it is something we must all face together,” added Governor Culver. “We have a history, under both Democratic and Republican leadership, of balancing our budget and acting appropriately to tough economic times.”

The Governor’s FY2010 budget proposal recommends a 6.5 percent cut in spending for the majority of State programs. Other key points about the FY2010 budget that Governor Culver addressed include:

• No tax increases will be proposed;
• Certain key areas – such as public safety, workforce development, human services, disaster relief, the teacher quality program, and early childhood education – will not see the full effect of the 6.5% cut;
• $200 million from the state’s cash reserves will be used in the FY2010 budget;
• Funds from a proposed federal economic stimulus package are not reflected in the proposed budget.

The proposed 6.5% cuts would apply to a total of 205 State programs. 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 pointed to the State’s strong fiscal management – including a $620 million cash reserve, a Triple-A bond rating, and one of the nation’s lowest debt levels – as enabling Iowa to take steps to get through the recession not available to many states. One example is the proposed Rebuild Iowa Infrastructure Authority, a $700 million initiative to create jobs and improve the state’s infrastructure without raising taxes.

“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.”

Legislative leaders of both parties issued statements shortly afterwards.

Joint Statement from Senate Majority Leader Mike Gronstal, Senate President Jack Kibbie,
House Speaker Pat Murphy, and House Majority Leader Kevin McCarthy Regarding the Culver-Judge Administration’s balanced budget proposal    

“In these tough economic times, we appreciate Governor Culver and Lt. Governor Judge taking another step to ensure a balanced state budget by releasing this proposal.

“Because of the deepening national recession, this year will be very tough for many Iowans.  While Iowans had little to do with the mismanagement, greed, and financial carelessness that is causing the worst national economic situation since the Great Depression, we will be sharing in the pain.

“In the coming weeks and months, we are committed to:
 
•        Listening to our constituents
•        Working with the Governor, Lt. Governor and Republican legislators, and
•        Passing a fiscally responsible state budget that attempts to protect the progress we’re making on creating good-paying jobs, improving student achievement and teacher quality, and ensuring affordable health care.”

Republicans Respond to Culver’s Budget Cuts

(DES MOINES)— House Republican Leader Kraig Paulsen (R-Hiawatha) issued a statement on the 6.5 percent budget cuts proposed by Gov. Culver:

“On the surface, this proposal is a step forward in addressing the over $700 million budget shortfall facing this state.  However, even an additional 6.5 percent cut will not bring the state out of the red. 

No one is certain the economic downturn has reached it’s bottom point yet.  Now is not the time to raid the state’s savings account. 

I’d like to see the full details of the governor’s plan, but House Republicans continue to  bring a more transparent and cost-efficient government to Iowans.  We will work to reduce spending, find government waste, and cover the budget gap without raising taxes on Iowans.”