Colleagues:
Here is the text of the press release from Governor Culver’s Office
announcing across-the-board budget reduction, the second action he has
take in less than 10 days to meet the revenue reductions caused by the
slacking economy in Iowa. This is all the detail available at this
time. We will have to see how it effects specific programs in
departments.
Lyle Krewson
____________________________________________
Lyle Krewson
Professional Lobbying Services
1725 S. 50th Street #602
West Des Moines, IA 50265
[log in to unmask]
515-238-7113 - Cel
____________________________________________
Thursday, December 18, 2008
Governor Culver Takes Action To Meet 'Historic' National Economic
Challenges
Announces 1.5% across-the-board reduction, seeks $10 million in fund
transfers
DES MOINES – Governor Chet Culver has announced new steps he is taking
to meet the budget challenges facing the state of Iowa caused by a
global economic downturn, including an across-the-board cut in State
spending.
“We are in the midst of an economic challenge that is historic in its
scope,” said Governor Culver. “While its cause comes from actions on
Wall Street, supported by misguided federal policies from Washington
over the past eight years, the result has been an economic recession
that is hitting Main Streets and factories and farms and families
across the nation. This world-wide economic recession is affecting
every state in the nation, no matter if they are big or small, rural
or urban, Democratic or Republican. We are all facing this challenge
together. And together, we must accept the reality and share in the
sacrifice.”
The Governor is taking action after last week’s meeting of the Revenue
Estimating Conference (REC) determined that state government would see
a decline in revenues during the current fiscal year. After meetings
with state budget officials and members of his Council of Economic
Advisors, the Governor determined the end of the economic downturn has
not yet reached Iowa and that the REC could make further reductions to
revenue estimates.
The Iowa Constitution requires a balanced budget; the state cannot
deficit spend. Today’s actions by the Governor meet the demands of the
current and projected declines in revenue, and balance the state
budget. He has taken the following steps:
He has directed the Department of Management (DOM) to revise its
projected balance sheet for the General Fund at the end of December in
order to adjust for the recent REC action and make other adjustments
based upon DOM’s best projections of income and expenditures. This
action has already been done, which projects a negative balance at the
end of the current fiscal year. A copy of the revised sheet is attached.
Pursuant to Iowa Code, the Governor will sign an Executive Order
making an across-the-board reduction in General Fund expenditures,
currently expected to be 1.5%. This is estimated to save the state
$91.4 million. However, the Governor will protect funding for
Corrections Officers and State Troopers, and will ask the legislature
to backfill these cuts when they convene next month.
He will work with legislative leaders and members of the legislature
to transfer $10 million to the General Fund from accounts and funds in
state government that have balances that exceed the amount needed for
the current fiscal year.
Governor Culver assured Iowans that he would hold the line on taxes,
saying, “Maintaining a balanced budget and staying in front of this
national economic crisis requires sacrifice throughout state
government, as well as business, workers, urban, rural, and all of
Iowa. And I intend to do this while holding the line on taxes.”
Today’s announcement represents a $101 million reduction in general
fund expenditures for the current fiscal year. When combined with
last weeks announced $77 million in cuts, this represents nearly $180
million in budget savings for the current fiscal year.
During his remarks today, the Governor reassured Iowans that Iowa is
in a strong position to meet the challenges presented by the national
economic downturn.
“I don’t want to be alarmist or suggest to Iowans that their state
government is in financial trouble,” the Governor said. “The fact is
we have more than $620 million in reserves that will help us through
this situation. We have a AAA bond rating that would allow us to do
some things that other states may find impossible.”
The Governor added: “We have a history, under both Democratic and
Republican leadership, of balancing our budget and acting
appropriately to economic tough times. And we have a strong,
unmatched, talented citizenry who demands that their political leaders
pull together to keep Iowa strong. The difficult, current economic
circumstances may not be the fault of Iowans, but it is something we
must all face together. Like most Iowans, I am both optimistic and
confident about what the future holds for our state. We have always
met challenges with solutions, problems with answers. And we always
will. “
Below is a listing of budget savings announced by the Governor in
recent weeks.
SAVINGS ANNOUNCED ON DECEMBER 9TH
Freeze on Out-of-State Travel, Filling of Vacancies, and Equipment
Purchases and savings from Judicial Branch, Legislature, and the
Regents: $28.0 million
Transfers from Alcoholic Beverages Division and Executive Council:
$12.0 million
De-appropriation of New State Office Building: $37.0 million
Total $77.0 million
ADDITIONAL SAVINGS ANNOUNCED TODAY
1.5 % Across-the-Board Reduction: $91.4 million
Transfer of Funds $10.0 million
Total $101.4 million
Total Budget Savings: $178.4 million
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