Reaction to Culver’s 10% cut in state budget

In case you’re just joining us this evening, Governor Chet Culver, a Democrat, ordered a 10 percent across-the-board cut in the state budget this afternoon.

AFSCME Council 61 president Danny Homan says state worker layoffs will be “devastating.”

Republicans aren’t supportive. Read some of their reaction here.  (Full statements posted below.)

Here’s some historical perspective,  with data courtesy of Culver press secretary Troy Price.  It’s a list of across-the-board cuts ordered by Governors Ray, Branstad, Vilsack & Culver.  It goes back to the Farm Crisis.

• August, 1980 —  Governor Robert D. Ray (R) orders 3.6 % across the board cut.
• December, 1980 — Governor Robert D. Ray (R) orders 1 % across-the-board cut.
• September, 1983 — Governor Terry E. Branstad (R) orders 2.8 % across-the-board cut.
• September, 1985 — Governor Terry E. Branstad orders 3.85% across-the-board cut.
• July, 1991 — Governor Terry E. Branstad orders 3.25% across-the-board cut.
• November, 2001 — Governor Thomas J. Vilsack orders 4.3% across-the-board cut.
• October, 2003 — Governor Thomas J. Vilsack orders 2.5% across-the-board cut. (10% of cut restored in June, 2004 to make it 2.25%)
• December, 2008 – Governor Chester J. Culver orders 1.5% across-the-board cut.
• October, 2009 — Governor Chester J. Culver orders 10 % across-the-board cut.

Now, to the prepared statements which reached my email inbox.

McKinley Statement on Governor Culver’s Budget Reaction
Governor’s actions leave Iowans headed for massive property tax increase

DES MOINES, IA – Senate Republican Leader Paul McKinley (R-Chariton) issued the following statement today regarding Governor Culver’s 10 percent across the board reduction:

“Iowans know that you simply cannot irresponsibly spend more money than you take in and yet Governor Culver and legislative Democrats continually plugged their ears to the Republican warnings about passing unsustainable budgets.

Governor Culver and legislative Democrats chose to deny the existence of their self-created deficits and then vote against common sense Republican amendments aimed at cutting hundreds of millions in waste and now the taxpayers of this state are suffering the consequences of Democrat fiscal mismanagement. Democrats had an opportunity to make responsible reductions earlier and now this action taken by Governor Culver will lead to significantly higher property taxes at a time when Iowans can least afford it.

Senate Republicans recently proposed a constitutional limit on state spending, a 2/3 supermajority vote of both houses of the Legislature to authorize new state borrowing, and a sunset on every state funded program so a thorough review of those programs can be conducted. Iowa does not have a revenue problem – we have a spending problem and Senate Republicans stand ready to again offer solutions to solving the worsening budgetary crisis if Governor Culver and Democrats are finally willing to listen to the taxpayers of Iowa.”

Republican Leader Comments on Governor Culver’s Property Tax Increase

(DES MOINES)-House Republican Leader Kraig Paulsen (R-Hiawatha) commented on the across the board cuts and resulting tax increases which Gov. Culver made today.

“Today the governor raised property taxes,” said Paulsen.   “The result of this across the board cut is higher property taxes for Iowans.   A tax increase that could have been avoided by better management of the state budget.   The governor is pushing his out-of-control spending problem on to the backs of Iowans.”

Among other things, an across the board cut reduces the state funding for the K-12 foundation formula.   This is the amount the state provides school districts on a per pupil basis.   If the state does not provide its statutory share, school districts have three options:   cut spending, use reserves or raise property taxes.   As a result of his actions, hard-working Iowans could see their property taxes increase as much as $245 million.

During the 2009 legislative session, House Republicans offered over $330 million in cost-saving measures.   Nearly all were rejected by legislative Democrats.   Also rejected by Democrats was a searchable budget database accessible to Iowans that allows them see how the state is spending taxpayer dollars.   Paulsen points to Republican’s targeted and meaningful budget efficiencies as more responsible than resorting to haphazard across the board cuts.

“The governor should instead look at cost-saving measures to eliminate unnecessary and wasteful government spending,” said Paulsen.   “House Republicans will continue to offer sensible solutions and reduce spending rather than asking the taxpayers to pick up the tab.”

Governor breaks his ‘no tax increase’ pledge as his order will increase property taxes by $284 million
Strawn: Culver’s budget ax an indictment of his failed leadership

Des Moines, IA – Republican Party of Iowa State Chairman Matt Strawn today commented on Governor Culver’s order to a 10% across-the-board cut in state spending in response to a projected $400 million revenue shortfall for the current budget year. Strawn said, “Governor Culver has completely failed the citizens of Iowa. This devastating across-the-board cut could and should have been avoided and his decision today only postpones the truly difficult work that must be done to fundamentally change the way our state government does business.

“The Governor acts as if these horrific revenue numbers are a surprise. Yet, who didn’t know this state was facing a serious recession last March and April when Culver and majority Democrats in the Legislature ignored our repeated warnings and passed the largest spending budget in Iowa’s history. This budget crisis is no surprise to anyone who was paying attention and the Governor’s use of his budget ax is an indictment of his failed leadership,” said Strawn.

In ordering his across-the-board spending cut, Culver decided against calling the Legislature back for a Special Session to attempt to balance the budget through more thoughtful, targeted budget reductions.

In addition, due to the way various property tax credits are funded and the method in which the state’s school finance formula works, an across-the-board spending reduction of this size will actually trigger a potential property tax increase of $284 million.

Strawn said, “Governor Culver has repeatedly said he would not raise taxes to balance the state’s budget. Apparently he doesn’t understand how our state budget functions. When you issue an across-the-board cut it reduces property tax credits and the state’s share of K-12 education funding and, thus, local property taxes will rise to fill the gap. This broken pledge is just one more example of Culver’s repeated failure to be honest with Iowans about the problems we face.

“The Governor has spent the last four months assuring Iowans all was right with the budget and, due to his I-JOBS program, recovery was underway. Unfortunately, this is not the case and Culver has no one to blame but his own unwillingness to face reality, accept responsibility, and take the bold action that was necessary to prevent today’s terrible news,” concluded Strawn.

Iowa Association of School Boards: Statement from President Jack Hill on Today’s Across-the-Board Cuts

“The governor made a difficult decision today by announcing a 10 percent cut. While that is a significant cut, we thank him for acting quickly so that school boards can start planning ahead as we work on budgets,” said Jack Hill, president of the Iowa Association of School Boards, and a North Scott school board member. “It is critical right now that all educational leaders step back and evaluate their options before taking action. It’s not going to be an easy year, but if we work together, hopefully we can all come up with viable solutions to keep achievement levels, curriculum development and education as a whole moving forward.”

VANDER PLAATS STATEMENT IN RESPONSE TO CULVER’S ACROSS-THE-BOARD BUDGET CUT

DES MOINES – Republican gubernatorial candidate Bob Vander Plaats issued the following statement in response to Gov. Chet Culver’s 10-percent, across-the-board budget cut announced this afternoon:

“When I was growing up in Sheldon, my Dad always used to say to me, ‘Don’t start something you can’t finish.’ He said that because he knew it was especially important that you don’t let people down when you make a promise to them.  Chet Culver started a lot of things with the state budget he signed that he just can’t finish. It’s not the result of the national economy; it’s the result of his failure to contain spending even as he was being warned the recession was going to hit Iowa hard. As a result, a lot of people are going to be hurt.  State employees are going to pay a high price for his fiscal irresponsibility.  Iowans who were counting on state services because of the promises inherent in the budget he signed into law are going to feel a lot of unnecessary pain and suffering. And, property tax payers are going to feel the impact of this action, too.

“Chet Culver once again has proven that his procrastinating when it comes to taking on problems has only made them worse and worse. The idea that the Department of Corrections, for instance, must make a $40-million reduction three months into the fiscal year really means the cuts are deeper than 10 percent.

“If I had been governor I would never have approved the exorbitant spending increases over the past few years that got us into this trouble.  I would’ve exercised foresight and caution rather than increasing the state budget roughly 18 percent in the past few budget cycles at the same time Iowa families and businesses were being forced to cut their own budgets.

“Finally, it doesn’t require a lot of leadership to make an across-the-board cut.  It’s an easy way out. It says outdated and ineffective programs are just as important as public safety, human services and education. Going forward, Governor Culver should be working closely with legislators from both sides of the aisle to prioritize spending and budget cuts.  The time of a crisis is where effective leadership matters most.  Unfortunately, Chet Culver has already failed the test.”

Iowa Sec. of Agriculture Bill Northey today issued the following statement on the 10 percent across the board budget cut announced by Governor Culver this afternoon.  This cut will bring the Department’s total two year budget cut from the beginning of FY’09 through FY’10 to 23 percent.

The Iowa Department of Agriculture and Land Stewardship had already experienced a 15 percent cut from FY2009 to FY2010 that reduced the Department’s General Fund appropriation from $22 million to $18.7 million.  The new cut announced today cuts an additional $1.87 million from the Department’s budget to a level of $16.8 million.

This level of funding is approximately the same as the Department’s appropriation for FY1994.

The Department is currently authorized 408 Full Time Employees (FTEs).  Due to the previous cuts the Department has not been filling positions and currently has 37 open positions.  The Department’s 371 FTEs are the fewest number of employees by the Department in more than 20 years.  These numbers are before the additional 10 percent cut announced today.

The Department was handling the previous 15 percent cut by not filling open positions, 3 permanent layoffs, and mandatory leave without pay for the Department’s 38 non-contract employees, offering voluntary leave without pay to all employees, and using one-time funding sources such as depreciation funds that was authorized during the legislature last session.

It is still unclear what additional steps will be needed to handle the additional $1.87 million cut, but layoffs and possible elimination of certain Department functions are possible.

Sec. Northey’s comments regarding the Governor’s announcement follow here:

“The Iowa Department of Agriculture and Land Stewardship has taken a significant reduction over the past year and another 10 percent cut in funding will have a dramatic affect on how we operate and the services we will be able to provide.  We will spend less money in this fiscal year than was spent 16 years ago, all while state government has grown approximately 48 percent in the same period of time.”

Department Overview
The Department is responsible for a wide variety of consumer protection and agriculture promotion programs.  This includes regulating meat processing, commercial feed and fertilizer, pesticide application, and dairy production and processing.  The Weights and Measures Bureau makes sure both buyers and sellers are treated fairly at the gas pump, grocery store or grain elevator.

The State Climatologist, Entomologist, Horticulturalist and Veterinarian are also all part of the Department.  Other areas of responsibility for the Department include Agriculture Statistics, the Iowa Horse and Dog Breeding program and helping promote the more than 170 farmers markets located across the state.

Land stewardship is also central to the work of the Department.  The Division of Soil Conservation provides farmers with expertise and funds to help them install practices that preserve our highly productive soil, prevent erosion and protect our critical waterways.  The Department is focused on making sure future Iowans can experience the same high quality of life that past generations have enjoyed in our state.

Statement from Christian Fong, Republican for Governor

Today, Iowa could no longer avoid the inevitable; our government growth has been out-of-control.  The Governor’s attempt to blame the recession, Wall Street or Washington D.C. is political theater, and not accepting responsibility.  None of those outside parties were responsible for our overspending, on pet projects like the $208 million Iowa Film Office scandal.

Under Governor Culver, Iowa’s state government grew by 20%.  Today’s painful 10% cut would not be necessary if the State had not embarked on an outrageous pattern of overspending in the first place.  Yet today Governor Culver said he would not do anything differently.  Iowans should take that as a signal of what the future would hold if he was re-elected.

Iowa needs intelligent leadership that can learn from mistakes.  Responsible leadership that admits when a past decision did not work.  And hard-working leadership that prevents a problem from growing into a crisis.  Iowa needs a new Governor.

Statement from President Miles In Response to Governor’s Announcement
October 8, 2009

I commend Governor Culver for his swift action today in response to yesterday’s report of the Revenue Estimating Conference and the need to prepare for additional decreases in State revenues.  The Board of Regents also needs to act quickly given the potential impact of this national financial crisis on the many important programs and services that Iowa’s Public Universities and Special Schools provide for our students, and for all of Iowa.

Over the past year, our institutions have responded proactively and effectively to the changing economic needs of our state.  At the Board’s direction, our university presidents have focused on key strategic initiatives, initiated efficiency and productivity improvements, consolidated or downsized academic programs, improved facility utilization, adjusted teaching and research loads, strictly limited salary increases, deferred open positions, implemented furloughs, and eliminated positions.

I want to extend my thanks to the presidents of Iowa’s Public Universities and the superintendents of our Special Schools for their leadership in comprehensively reviewing their very complex operations, developing new ideas and approaches, and making difficult choices.  I also want to thank the faculty, staff and students of our institutions for their unwavering support during this challenging time.

Today I must ask all who care about the Regent institutions to sacrifice once more.

In light of the Governor’s announcement today of a 10% across-the-board budget cut, effective immediately, I am directing:

• A system-wide freeze on general education-funded hirings; and,
• A moratorium on all new building construction projects, except those directly related to flood restoration projects at the University of Iowa.

I will seek ratification of these mandates during a special telephonic meeting of the Board of Regents, State of Iowa, to be scheduled for Wednesday, October 14.  In the meantime, I am directing the Board Office to prepare an implementation plan for the hiring freeze and construction moratorium.

These steps, while important, will not be enough to adjust to budget reductions of the magnitude facing our institutions.  Accordingly, our October 14 meeting will be devoted solely to a discussion involving the Regents and the heads of our institutions regarding additional measures to adjust to the revised FY 2010 budget.

At the conclusion of that meeting, we will ask the institution heads to prepare specific action plans to be presented to the Board at its next regularly scheduled meeting on Thursday, October 29.

Iowa’s Public Universities and Special Schools face significant headwinds, and difficult days lie ahead.  As we move forward, we will face these difficulties together.  Be assured that whatever challenges come our way, this Board and everyone at our institutions remain resolutely committed to (1) continued access for Iowa students to an outstanding higher education, and (2) protecting the exceptional quality of our educational, research and service activities.

ROBERTS CRITICIZES CULVER’S FAILURE TO CALL A SPECIAL SESSION

Republican gubernatorial candidate Rod Roberts is criticizing Governor Culver’s decision yesterday to cut state spending “across the board” by 10%. The Governor’s decision came in response to a report on Wednesday that state revenue would be $415 million lower than expected for the current fiscal year. Roberts—who had been warning Culver of the state’s budget emergency for several months—believes the Governor should have called for a special legislative session to correct the revenue shortfall.
 
“An across the board cut of 10 percent of the state’s budget is simply poor governance,” said Roberts, an Assistant Minority Leader in the Iowa House of Representatives.  “A cut of this size should have been made by the legislature.” 
 
Roberts pointed out that Culver missed several opportunities over the past year to avoid the present budget emergency. During the legislative session earlier this year, House Republicans proposed $330 million in spending cuts to help avoid a budget crisis, but Culver rejected them. Over the past six months, it was already becoming apparent that the state’s revenue for the current fiscal year would be significantly lower than expected. Governor Culver had many opportunities to call a special legislative session to correct the revenue shortfall, but he failed to do so.

“The Governor has known over the past year that his out-of-control spending was going to result in a budget emergency—he didn’t find that out for the first time on Wednesday,” said Roberts. “Chet Culver failed to manage the state’s finances over the past year and now Iowans will pay the price.” 

Culver’s budget cut is a poorly tailored response to the fiscal emergency that the state is facing, according to Roberts. Culver cut $565 million from the state budget when only $415 was necessary. Further, the “across the board” nature of the cut means that programs throughout state government—whether in education, healthcare, or law enforcement—will suffer budget cuts regardless of how well they have been performing, how badly they need the funding, or how important their service is to Iowans.

“Budget cuts were needed, but the Governor’s response went overboard and failed to carefully consider both the performance of state agencies and the interests of Iowans who depend upon the agencies,” said Roberts, a five-term State Representative from Carroll. “Culver should have called a special session yesterday.  Legislators would have been in a better position to make considered, case-by-case judgments on where budget cuts should have been made. If I had been governor, I would have called a special session yesterday; in fact, I would have called one months ago.”

Statement by Chris Bern, president of the Iowa State Education Association
 
DES MOINES, IA (10/08/2009) — “The Governor faced a difficult decision today in making an across-the-board (ATB) reduction of 10 percent to state general fund appropriations. We believe it is imperative that Iowans understand quality education in Iowa must be maintained and there are still options available to K-12 school districts to offset these cuts. Unfortunately, our area education agencies and community colleges are in more immediate need as they do not have the same resource options available to them.

“It is important to note this reduction does not impact spending authority which means that while school districts will receive less state aid, they will still be able to use their cash reserves for any shortfalls. In fact, we believe school districts have an obligation to use the over $400 million in cash reserves available for this time. Tough economic times require all of us to reach into our “savings” and use cash reserves and other resources available rather than making poor choices that would have an adverse effect in the long-run. Iowa’s students should not be short-changed by inadequate course offerings or lose access to world-class educators because districts did not want to dip into their cash reserves, utilize the Iowa School Cash Anticipation Program (ISCAP), or use other resources available to them.

“Now is the time for all of us to pull together and find solutions that will maintain the quality of Iowa’s great public schools. It is during the toughest times that Iowa must maintain its public education system so we come out of this economic downturn stronger than before. The best chance for economic recovery in Iowa is through the doors of our public schools.”