Governor closes books on FY09 budget

Governor Culver is declaring the state’s fiscal year 2009 budget balanced. FY 2009 ran from July 1, 2008 to June 30, 2009. Read the news release from the govenror’s staff below, as well as a copy of the governor’s executive order.

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.