Culver defends “up” news, Regents discuss dour outlook

Governor Chet Culver, a Democrat, responds to GOP critics.

"We're coming up on an election year and I think what you're seeing is a lot of kind of political rhetoric and any number of people considering running for governor and that sometimes can add to the level of partisanship," Culver told reporters earlier this afternoon in Ames. "We're getting the job done and we will manage through this economic downturn just like we have for the last 30 months."

Meanwhile, over in Cedar Falls today, Board of Regents member Michael Gartner of Des Moines (the former media executive who owns the Iowa Cubs) offered a rather stark assessment of state tax revenue that's at odds with Culver's assessment.

"Despite what some of the Democrats are saying, there is no indication that it's turning around," Gartner said. "…I think it's going to be an extraordinarily difficult year."

Board of Regents President David Miles of West Des Moines (a businessman/entrepreneur) tried to lighten the mood after Gartner's comments. "Anybody that wants to be less gloomy is particularly invited to press the button," Miles said, referring to the button that activates the microphones in front of each Regent.

Miles went on to agree with Gartner: "We have to be cognizant of the kinds of challenges that the state's facing right now and that Michael so appropriately reminded us of."

Here's a bit of backgroundon the latest kerfluffle over state tax revenue.  Read news releases from two of the GOP gubernatorial candidates below.

VANDER PLAATS: “CULVER CLAIMS BUDGET GLASS IS HALF FULL WHEN IT’S REALLY COMPLETELY EMPTY”

DES MOINES – The insistence of Governor Chet Culver and his staff that state revenues went up in July, rather than down as the nonpartisan Legislative Service Agency reported, reflects a “bunker mentality” that could paralyze any efforts to fix Iowa’s mounting budget problems, Sioux City businessman Bob Vander Plaats today.

“Chet Culver is trying to fool Iowans into believing the budget glass is half full when it’s actually completely empty,” Vander Plaats said. “It’s bad enough that his overspending has driven the state budget to a $900-million shortfall this new fiscal year. Now he’s proving his only strategy to get us out of his mess is to deny it’s even happening and still insist things are getting better. He can’t fix the problem because he and his staff have succumbed to a bunker mentality. In their minds, everyone else is wrong and they’re the only ones who are right. Iowans have seen it before with failed administrations but we never imagined we’d see something like this from one of our own governors.”

On Monday, Culver and several key aides claimed state tax collections were up 1.2 percent in July.  However, the Legislative Service Agency said revenues fell 6 percent last month. Culver’s budget director said an increase in sales and use tax payments was a “healthy increase” that could signal an economic rebound. The LSA attributed the increase to a one-month bookkeeping change that inflates sales and use tax payments by about $40 million. The agency said last July’s numbers are about the same as this July’s receipts, shooting holes in the Culver administration’s politically motivated boast of an increase, healthy or otherwise.

“In June, Chet Culver was saying the state budget ‘should be all right’ even as it was headed for an end-of-year train wreck. Now, his budget director says ‘hopefully … we may see some hope in the future.’ I’ve said it before and I’ll say it again, hoping not a leadership strategy,” Vander Plaats said. “Chet Culver needs to take immediate action to curb state spending over the next 11 months of this fiscal year instead of waiting and hoping, hoping and waiting until next spring that things will change.”                 

Noting that House Republican Leader Kraig Paulsen of Hiawatha is among those leaders who say state revenues are declining, Vander Plaats added, “How can we expect Chet Culver to work in a bipartisan manner to repair the state budget when he can’t admit it’s broken? We need a governor who accepts the truth instead of hunkering down and shutting everyone out. I promise Iowans this: If they elect me as their next governor, I won’t wait until Inauguration Day to go to work on the budget; I’ll start working the day after the election to find common ground to control spending, reform government and give taxpayers more for less.”

ROBERTS CALLS ON GOVERNOR TO BE “REAL” WITH IOWANS

Republican gubernatorial candidate Rod Roberts today called on Governor Culver and his staff to be more honest with Iowans about the condition of the state’s finances.

“Iowans need a governor who will be ‘real’ with them about the health of the Iowa economy,” said Roberts. “Iowans realize that we are in an economic recession. The recession is real, and the governor needs to be upfront about how the recession is affecting the Iowa economy.”

Roberts, a 51-year-old state representative from Carroll, made the statement after the governor’s office claimed on Monday that the state experienced a strong boost in revenue for July 2009. The governor’s office suggested that a slight increase in gross revenue indicated that the state’s economy had improved. But Roberts noted that gross revenues only increased slightly for July 2009 because of a state bookkeeping change which now credits the state government with receiving tax dollars which must be passed along to local school districts. As a result, the state’s gross revenues are artificially inflated. 

Roberts also pointed out that net revenues—not gross revenues—should be used to determine the health of the Iowa economy. According to a non-partisan state budget office, the Legislative Services Agency (LSA), net revenues for the state dropped 6.1% for the month of July compared to July 2008.

“Net revenue is the amount which the state actually has to spend. It is the true indicator of the health of the state’s economy,” said Roberts. “By focusing on a slight increase in artificially inflated gross revenue rather than a sizeable decrease in net revenue, the governor’s office is not being straightforward about the true health of Iowa’s economy.”

Roberts notes that this is not the first time that the governor’s office has failed to be real with Iowans about the health of the state economy. The governor’s office has also disputed that the state is in a budget crisis, even though the state budget for the fiscal year 2009 ended with a $161 million shortfall. The projected spending gap for fiscal year 2011 is approaching $1 billion dollars. Roberts says that he will be more candid with Iowans as governor.

“Iowans are concerned that the state and nation are in a recession. They don’t need a governor who denies the state’s fiscal challenges; they need a governor who will acknowledge them,” said Roberts.

Roberts said the solution to the state’s budget crisis is to enact fiscally responsible policies. According to Roberts, state government will emerge from its budget crisis by reducing spending and keeping taxes low on businesses and families.