Governor Chet Culver today ordered a 10 percent, across-the-board cut in the state budget [Executive Order PDF]. “This is a tough, challenging time. Our backs are against the wall, but we’re not going to run and hide,” Culver says. “We’re going to deal with it head on like every Iowa family is and those are the kinds of values that Iowans expect their political leaders to adhere to.”
Culver’s action cuts the budget [ATB Calculations] by $600 million. It assures “hundreds” of state workers will be laid off. “This is a tough decision, but I believe it reflects our Iowa values of common sense and fiscal responsibility,” Culver says. “This is not a challenge we’ve asked for, but it is one we will meet, as Iowans.”
Culver’s action comes nearly 24 hours after a three-member panel of financial experts reduced their estimate of state tax collections for the year by $415 million. The cut ordered by the governor delves deeper, carving $600 million out of the current state budget.
“We have no certainty that this situation will not get worse before it gets better,” Culver says, “so we’re preparing, I think, prudently for the future.”
If the state’s economic picture improves by December, Culver said he may ask legislators to plug more money into the budget in three areas: basic health care services, public safety and workforce development.
The governor’s across-the-board cut means state aid to K-through-12 public schools will be cut by 10 percent. Culver plans to ask legislators to pass a bill that forces school districts to dip into their cash reserves before asking property owners to pay more in taxes.
“Right now there is roughly $400 million in cash reserves in our 362 school districts,” Culver says, “so as we tighten our belt, we’re asking those local school districts to do the same.”
Culver ruled out calling lawmakers back to Des Moines for a special legislative session because, he says, it would have taken too long to come up with a compromise plan for selective cuts. Leaders in the legislature branch of state government say they will match the 10 percent cut. No word, yet, from the judicial branch of state government, as Culver’s authority governs just the executive branch of state government. The chief justice of the Iowa Supreme Court is the “decider” for the judicial branch.