Governor Chet Culver says his plan to cut 77-million dollars in state spending will not include layoffs or furloughts. He unveiled the plan Tuesday during a meeting of the Iowa Taxpayers Association in West Des Moines. The governor says the state will freeze hiring and travel plans, reduce overtime and postpone purchasing in order to end the fiscal year in the black.
Culver says he will look for additional cuts if it’s the only way to avoid a tax increase. "We do not want to do that and I’m not just pandering here, but what we do want to do is to be very fiscally conservative and take any and all steps to keep our house in order," Culver said. "I think most economists will tell you this is not the time to increase taxes – during a recession."
Culver has asked the legislature, court system and three public universities to each cut one percent of their budget. He is also asking lawmakers to postpone construction on a new state office building, which will save 37-million dollars.
Culver, who’s current annual salary is $130,000, suggested he would be willing to take a pay cut if other state employees faced that same action in the future.
The governor’s plan was released on the same day that Principal Financial Group laid off 550 employees, including 300 at the company’s headquarters in Des Moines. Culver says he recently met with Principal executives but did not learn of the layoffs until Tuesday.
"We stand ready to help Principal or any other Iowa business, large or small, deal with this recession. We have partnered with Principal in the past…so our door is open if we can be of assistance to Principal, Winnebago, Pella (Windows) or any number of companies," Culver said.
Last month, Principal told state economic development officials that the company was no longer interested in tax incentives in exchange for creating 900 new jobs in Iowa. Principal is one of the largest employers in Des Moines.