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June 3rd, 2009

Out of Touch With Reality

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Written by: Craig Robinson
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culverpollLt. Governor Patty Judge downplayed a report from the non-partisan Legislative Service Agency that painted a bleak picture of the state’s finances yesterday. Judge said, “We of course had done a lot of cutting and we think we are at a place where we will be able to finish this year and go into the next budget with the books balanced.”

The LSA report isn’t nearly as optimistic as the Governor Culver and Judge are. In an email to legislators, Holly Lyons, the Fiscal Services Director of the LSA wrote, “Given the recent negative trend, it is possible the FY 2009 revenue shortfall will be more than the $94.6 million available from the projected ending balance and Economic Emergency Fund.”

Republican gubernatorial candidate Rep. Chris Rants said, “When Lt. Governor Judge said that Iowa is in a ‘good place,’ I wonder if she is looking at the same set of numbers that the legislators were given. Our revenues were down 12% last month, and 15% the month before that. What on earth does she think a ‘bad place’ would be? Without a surge in revenue, Iowa will have an actual budget deficit – something prohibited by our constitution. What’s so good about that?”

“Iowans are smarter than what Governor Culver and Judge give them credit for. They understand Culver didn’t cause the revenue decline, but they expected him to manage the budget when times got tough,” Rants added.

There is only one month remaining in fiscal year 2009, and unless the Iowa economy rebounds rapidly, Governor Chet Culver may be forced to call the legislature back in to session to once again open up the hood to tinker with state budget.

In April and May, the net general fund receipts were off over $161 million when compared to the same period in 2008. Currently, state revenues are down $248.3 million, while the Revenue Estimating Conference only estimated a decrease of $157.9 million in revenue. That means there is currently a $94.6 million short fall that Governor Culver will have to deal with.

If the fiscal year could end today, Governor Culver would have the ability to move enough dollars around to make up for the $90 million shortfall. The FY 2009 budget had an ending balance of $44.6 million, and Culver is allowed to transfer up to $50 million from the Economic Emergency Fund.

The problem for Governor Culver is that the current trend is a negative one. April revenues were off more than 15% and May revenues were off by 12%. In order for Culver to avoid having to call legislators back into town to deal with the budget, revenues have to be no greater than negative 4.9% for the month of June. The likelihood of that occurring is slim when you consider that revenues from February through May all were greater than negative 4.9%.

Governor Culver and Iowa Democrats held on to hope that President Obama’s stimulus package and the Governor’s I-Jobs proposal would somehow lead to an economic recovery, but those dollars might not enter into the system quick enough to make a meaningful difference. Additionally, Governor Culver used the majority of the federal stimulus money to backfill his budget, which allowed him to continue to spend more money than the state generates.

For years, State Auditor David Vaudt has been warning the legislature and governor that they need to get their spending in line with their revenues, yet Governor Culver and the Democrats have dismissed the Auditor’s warnings as just “partisan rhetoric.”

While Governor Culver might be able to find creative ways to deal with the FY 2009 budget, if the Revenue Estimating Conference lowers its 2010 estimate, Culver will be forced to make changes to the budget the legislature just completed and he just signed.

Senate Republican Leader Paul McKinley said, “Governor Culver and legislative Democrats once again failed to listen to those warning them about the economy and continued to spend at unsustainable record levels. Senate Republicans have offered solutions to cut the fat from Iowa’s bureaucracy for this fiscal year in order to save taxpayer dollars but absolutely every time the Democrats obstructed our cost-cutting measures. If Governor Culver and legislative Democrats worked in a bi-partisan fashion, we would not be in this current predicament. It is clear that the Democrats do not understand the severity of this spending problem and the taxpayers of Iowa will once again suffer because of their failure to keep government living within its means.”

Democrats in the Iowa House also rejected a Republican proposal which would have cut over $300 million from the FY2010 budget. House Republican Leader Kraig Paulsen said, “Democrats have spent too much, cut too little and have left Iowans with two budgets that are likely out of balance and a third budget that has $1 billion spending gap. House Republicans offered over $300 million in reasonable spending cuts to save taxpayer money. Iowans can count on Republicans to offer sensible savings and sound investments to balance the budget and create jobs.”

Maybe instead of calling the warnings for Auditor Vaudt and Republicans “partisan rhetoric,” Governor Culver should have headed their advice, like many Iowans heed the counsel of their accountant.


About the Author

Craig Robinson
Craig Robinson is the founder and editor-in-chief of TheIowaRepublican.com, a political news and commentary site he launched in March of 2009. Robinson’s political analysis is respected across party lines, which has allowed him to build a good rapport with journalist across the country. Robinson has also been featured on Iowa Public Television’s Iowa Press, ABC’s This Week, and other local television and radio programs. Campaign’s & Elections Magazine recognized Robinson as one of the top influencers of the 2012 Iowa Caucuses. A 2013 Politico article sited Robinson and TheIowaRepublican.com as the “premier example” of Republican operatives across the country starting up their own political news sites. His website has been repeatedly praised as the best political blog in Iowa by the Washington Post, and in January of 2015, Politico included him on the list of local reporters that matter in the early presidential states. Robinson got his first taste of Iowa politics in 1999 while serving as Steve Forbes’ southeast Iowa field coordinator where he was responsible for organizing 27 Iowa counties. In 2007, Robinson served as the Political Director of the Republican Party of Iowa where he was responsible for organizing the 2007 Iowa Straw Poll and the 2008 First-in-the-Nation Iowa Caucuses. Following the caucuses, he created his own political news and commentary site, TheIowaRepublcian.com. Robinson is also the President of Global Intermediate, a national mail and political communications firm with offices in West Des Moines, Iowa, and Washington, D.C. Robinson utilizes his fundraising and communications background to service Global’s growing client roster with digital and print marketing. Robinson is a native of Goose Lake, Iowa, and a 1999 graduate of St. Ambrose University in Davenport, where he earned degrees in history and political science. Robinson lives in Ankeny, Iowa, with his wife, Amanda, and son, Luke. He is an active member of the Lutheran Church of Hope.




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