This shall be a live blog of Governor Chet Culver’s Thursday, October 8, 2009 news conference, at which he is expected to announce he is ordering an across-the-board cut in the state budget or announce he is calling legislators back into special session in Des Moines to devise a budget fix. The fix is needed, as the state’s Revenue Estimating Conference reduced its esimtate of state tax collections for the current budgeting year by $415 million yesterday.
At about five ’til two (the event is scheduled to begin at two), the TV folks notice some of the light illuminating the lectern area where Culver will stand are burned out — “budget cuts” some wiseacre in the back of the room yelled.
At 2:15, one of Culver’s staffers entered the room, checked something on the lectern and left. No sign of the gov. At 2:18, deputy chief of staff entered the room to say the news conference would start in three or four minutes.
It was less than a minute. “Good afternoon. I’m here today to announce….I have ruled out a special session…I am ordering an across the board cut of 10 percent.”
The decline in state tax revenue has been “dramatic” according to Culver. “Iowa has not spent too much,” Culver said, rebutting Republican critics, saying the situation was caused by the national recesssion.
Culver said he and other policymakers had “simple, but painful choices.”
“…This is a tough decision, but I believe it reflects our Iowa values,” Culver said.
Ten percent is about $600 million.
Why so big?
“We have no certainty that this situation will not get worse before it gets better so we are preparing, I think, prudently,” Culver said. “I do not want, secondly, to have to address the 2010 budget again, if possible.”
How many layoffs?
“Certainly hundreds of state employees,” Culver said.
Culver will ask legislators to force schools to use cash reserves before raising property taxes to deal with the cut in state school aid?
“There is roughly $400 million in cash reserves in our 362 school districts, so as we tighten our belts, we ask those school districts to do that same,” Culver said. “…In some cases you have districts with 15 to 20 percent in reserves.”
What will public see?
“This executive order only applies….to executive branch of state government, so the legislature and the judicial branch need to make their own adjustments,” Culver said, indicating legislators plan to cut the legislative branch by 8.5 percent. (UPDATE: Legislative leaders say their branch will also cut its budget by 10 percent.)
Is there a point when tax hikes are on the table?
“I think we can get through 2010 without raising taxes,” Culver said, adding for fiscal year 2011 the state “will have to change the way we look at budgeting, given this worldwide recession.”
Talked to department heads about specific cuts you’d like to see?
“Their plans essentially have to be approved by the DOM. For ex., corrections have to cut roughly $40 million and they will have to present that plan…and we will either approve it, or send it back and say we want cuts in other areas.”
What’s their deadline?
“As quickly as humanly possible,” Culver said. “…these cuts are taking place, starting today.”
You mentioned this cut reflects Iowa values. What do you mean?
“Fiscal responsibility. Every Iowa family has had to tighten their belt…This is a tough, challenging time. Our backs are against the wall, but we’re going to deal with it head on…and those are the kinds of values Iowans expect their political leaders to adhere to.”
Reporter asks for more budget detail, re: agency level cuts. Culver promises to provide department-level cuts in a document.
“Everything is on the table and needs to be,” Culver said.
Why not dip into state’s economic cash reserve?
Culver said it’s because the reserve was drawn down a third for ’10 and it may be needed again in the future, in ’11. “2011 is going to be more difficult than ’10 so we need a significant amount of those reserves to apply for ’11,” Culver said. “…This is the great recession. It’s as bad as….the Great Depression.”
Give us an idea of what this means (re: individual agency budgets)?
“We will keep you posted as to exactly what it means.”
Message to state workers?”
“We are concerned. We want to be helpful through Workforce Development…This is completely out of our control It’s the result of failed fiscal policies in D.C. and bad, if not sometimes criminal activities on Wall Street…I am required under the constitution…to balance this budget.”
Anything you’d do differently?
“No.”
Why no special session?
“We can’t wait. We had to act….We need to move….This is the best option that I had.”
About O.Kay Henderson
Kay is a founding member of the Radio Iowa network newsroom. In 1994, she became the network’s news director. She’s a featured reporter and commentator on Iowa Public Television’s “Iowa Press,” and the 2002 recipient of the Shelley Award.
So, biblical flooding is not worth a special session, but a financial situation of his own making is? This guy’s gotta go.
By “bad fiscal policies in DC”, liberals really mean the Bush Administration’s fiscal policy, including the Bush tax cuts. I resent this type of blame game being played by the current President and now our own Governor. Stop whining about the past and/or painting it out to be worse than it was. Stop being partisan. Just lead.
By “criminal activities on Wall Street”, liberals for the most part are referring in part to salaries and bonuses that are central to a healthy capitalistic economy. Granted, we can all name a handful of cases where “criminal activities” have been committed by Wall Street types (Madoff, etc). But large salaries, multi-million dollar bonuses and the like are not “criminal”, or even close to it – rather, they are the result of successful companies in a captialistic system. This is another example of the Left trying to chip away at our free market, capitalistic foundation. (For the record, I’m the head of a 4 person household whose annual income is between $44-$50K/year … so it’s not like I’m one of the rich guys trying to defend my way of life … but I am an American trying to defend capitalism.)
Even at a time when the Governor should have been humble and non-partisan, he has to use Leftist talking points to take jabs at his political opponents.