Governor Chet Culver’s recommending a state spending plan for the budgeting year which begins July 1 that’s not only leaner than the current year’s budget, but would spend less than the state budget from two years ago as well.
On December 22, Culver ordered a 1.5% across-the-board cut in the current year’s state budget and Culver’s outline for next year calls for a roughly 6.5% reduction in state spending in nearly all areas of state government.
Culver calculates that is about $480-million in additional cuts. "Together we must accept the reality and share in the sacrifice," Culver said earlier tonight during a speech to the Iowa Business Council.
Culver characterized his plan as "common sense." Culver opened his 15-minute speech by promising to "find every efficiency" possible in state government. "I believe we will emerge from this recession in a better and stronger position to lead," Culver said later. "However given the current economic climate, we can’t avoid additional cuts in state spending. Simply put, just as families and businesses across the state and around the nation are doing more with less, so too must state government."
Culver’s proposed cut would be deeper if the state didn’t have millions of dollars in cash reserves. Rather than making additional cuts, Culver’s calling for taking $200 million from the state’s emergency reserves. "I’m both optimistic and confident about what the future holds for our state," Culver said. "We have always met challenges with solutions, problems with answers — and we always will."
Culver is recommending that some areas of the state budget, like spending on education and public safety programs, be cut to a far lesser extent. In a question-and-answer session with reporters tonight, Culver said state worker layoffs are "very likely."
"I think once people understand the ramifications of these types of cuts, coupled with the previous $180 million in cuts, that will result in layoffs," Culver said.
Culver expressed hope his budget plan would be embraced by his fellow Democrats and Republicans in the legislature. "This is the right step to take at the right time, based on what we know today," Culver said.
Culver continues to press legislators to approve a plan that would see the state borrow $700 million to finance infrastructure projects, a state-level economic stimulus package.
Listen to Culver’s speech to the Iowa Business Council by clicking on the audio link below.