State faces another round of budget cuts

A third round of state budget cuts is looming. Iowa income tax refunds are 30 percent above state officials’ estimate, creating more budget chaos as state spending has already been cut twice in the past five months. The latest state budget plan left just under three million in the bank when the books close June 30th, but this latest news means red ink unless more budget cuts are made. Governor Tom Vilsack scheduled a Thursday afternoon news conference to discuss the crisis, but cancelled at the last minute. Later, though, Vilsack talked with Radio Iowa and said Iowa’s much better off than other states. He says this is unlike the late 80s or early 90s when the state was out of money.Vilsack says there’s a bright side: Iowans are getting bigger tax refunds, which they’ll hopefully spend. He says that spending would stimulate the economy.Vilsack announced he’ll put a banker with 40 years of experience on the panel that sets official tax estimates. The Governor’s also suggesting legislators put another private sector person on the “Revenue Estimating Conference” — the panel that guesses how much taxes the state will collect. Vilsack says the process was set up at a different time and doesn’t work very well when revenues are going down.Vilsack’s asking for that newly comprised group of financial experts to meet by May 4th to hang a dollar figure on the latest problem.