State Tightens Its Belt: Will Only Spend Something Like $7-8 Billion Next Year

By the end of this week, Governor Chet Culver is required to submit a new budget to the legislature based on the most recent projections from the Revenue Estimating Conference (REC). Governor Culver’s original FY 2010 budget totaled $6.2 billion, the largest in Iowa’s history, but the REC estimates revenues for 2010 to only be $5.7 billion, meaning Culver will be forced to increase taxes or scale back his original budget.

Despite the news of government workers on furloughs and legislators making budget cuts, Governor Culver and Democrats will spend more money than ever in fiscal year 2010. First, there is the federal stimulus money which will total $600 million, and second, they are poised to borrow $750 million to spend on various projects around the state. That means, if Culver’s budget is $6 billion, the state will actually spend around $7.3 billion in 2010.

On IPTV’s Iowa Press this past Friday, Rep. Jo Oldson, Chair of the House Appropriations Committee, and Sen. Robert Dvorsky, Chair of the Senate Appropriations Committee, both refused to offer any suggestion of cuts to education, health care, or public safety when pressed about potential cuts. That means Iowans should prepare themselves for a large tax increase since education, health care, and public safety spending makes up something like 97% of state spending.

The most troubling statements by Oldson and Dvorsky on Iowa Press were their unwillingness to accept any responsibility for creating the budget problems the state is currently facing. Nobody questions that Democrats have increased spending by a one billion dollars in the previous two years, and nobody denies that our budget is out of whack by one billion dollars. So what is to blame for the budget situation then? Democrats say it’s the economy, not themselves.

Despite warnings by State Auditor Dave Vaudt that the level of their spending was unsustainable, Democrats continued to spend in hopes that revenues would maintain their previous level of growth. But as Vaudt often points out, had Democrats kept their spending in-line with inflation, Iowa’s budget gap would be a manageable number. For example, the most recent REC estimate is only $186 million less than what the actual revenues for 2008 were.

Simply put, under Democrat leadership, we spent too much money and grew government to an unsustainable level. Until they realize the errors of their ways, or Iowa voters revoke their majorities next November, we will continue to deal with these problems.