Culver on the State Budget

Here's another excerpt from Gov. Chet Culver's meeting this week with The Gazette's Editorial Board.

Q – Regarding the state budget, as you noted it is balanced. Of course by law it must be. Some critics say the way it was balanced, depending, in part, on some stimulus funds from the federal government, shifting money from other funds, is just going to postpone major problems facing our state next year, including the big Medicaid shortfall and the loss of stimulus money. How are you looking at that challenge? What realistically do we need to do as a state?

“Well, I think we have to do precisely what we've done for the first four years that I've been in office. You have to make the budget work. You have to keep it balanced. We have a record of doing that.“Four years in a row now, we've been able to comply with all of the laws and rules with respect to balancing the budget. And I've governed and put the budget together very effectively, in a very conservative way. It's one of the reasons we've earned a AAA bond rating from the bonding agencies.“It's never easy. You have, you always have three, five, 10 times the number of requests for every dollar you have. That's the case when you have a $5.5 billion budget or a $5 billion budget. You have a lot of special interests that are at the Capitol in Des Moines. So what you have to do is comply with the law.“One of the things we have done, in terms of balancing the budget, one of the things we've done this fiscal year to really show our commitment in terms of fiscal year (2011), the year that we're now in, we're spending 97 percent of projected revenues, not what's allowed under the law, and that's 99 percent. So we're being very conservative.“I also think it's important for Iowans to understand that since 1846, since we became a state, we've always had the challenge of making the budget work and putting together a budget that is balanced. We actually spend, this year our state budget, is about $5.3 billion. But with federal funds, you're talking about, and other matching funds, Regent's funding, you're talking about a $14 billion budget. So, we've always used a combination of resources to provide the essential services that Iowans rely on to maintain our Regent's institutions, etc.“So this challenge is going to be no more daunting than the challenge of putting together the first budget. The key is having principles and guidelines in terms of spending within your means, tightening the belt if necessary. And based on where we are, I feel very good about putting together the next state budget. We have $750 million in cash reserves and in our ending balance. We've reorganized state government for the first time in modern history.“And because we took the legislative steps to reorganize, we're going to save $250 million in Fiscal Year 2011. We've streamlined information technology services. We streamlined data centers, e-mails, our vehicle fleets. We've gone to a much broader, strategic purchasing arrangement. So that's $250 million. We had early retirement, which we offered. On top of that we've taken very aggressive steps to allow counties to help the state collect $500 million in unpaid fines and fees. And I signed legislation this year to help us more effectively collect that money that's owed to the state.“So you put all that together, and we're talking in excess of a billion dollars.“And finally, and maybe most importantly, we've had 11 months in a row of economic growth. Revenues are coming in higher than the Revenue Estimating Conference projected late last year. So I think our growth is going to be slow but steady, which is very good news in terms of budgeting in the future.And my opponent has misled people about the current state of the budget. If you look at what he's said, and what he has said for 12 months now, he says that we have a budget deficit of a billion dollars. That's not true. It's just simply not true…“There are 28 states in America that do have budget deficits today, and Iowa is not one of them.”

“Four years in a row now, we've been able to comply with all of the laws and rules with respect to balancing the budget. And I've governed and put the budget together very effectively, in a very conservative way. It's one of the reasons we've earned a AAA bond rating from the bonding agencies.

“It's never easy. You have, you always have three, five, 10 times the number of requests for every dollar you have. That's the case when you have a $5.5 billion budget or a $5 billion budget. You have a lot of special interests that are at the Capitol in Des Moines. So what you have to do is comply with the law.

“One of the things we have done, in terms of balancing the budget, one of the things we've done this fiscal year to really show our commitment in terms of fiscal year (2011), the year that we're now in, we're spending 97 percent of projected revenues, not what's allowed under the law, and that's 99 percent. So we're being very conservative.

“I also think it's important for Iowans to understand that since 1846, since we became a state, we've always had the challenge of making the budget work and putting together a budget that is balanced. We actually spend, this year our state budget, is about $5.3 billion. But with federal funds, you're talking about, and other matching funds, Regent's funding, you're talking about a $14 billion budget. So, we've always used a combination of resources to provide the essential services that Iowans rely on to maintain our Regent's institutions, etc.

“So this challenge is going to be no more daunting than the challenge of putting together the first budget. The key is having principles and guidelines in terms of spending within your means, tightening the belt if necessary. And based on where we are, I feel very good about putting together the next state budget. We have $750 million in cash reserves and in our ending balance. We've reorganized state government for the first time in modern history.

“And because we took the legislative steps to reorganize, we're going to save $250 million in Fiscal Year 2011. We've streamlined information technology services. We streamlined data centers, e-mails, our vehicle fleets. We've gone to a much broader, strategic purchasing arrangement. So that's $250 million. We had early retirement, which we offered. On top of that we've taken very aggressive steps to allow counties to help the state collect $500 million in unpaid fines and fees. And I signed legislation this year to help us more effectively collect that money that's owed to the state.

“So you put all that together, and we're talking in excess of a billion dollars.

“And finally, and maybe most importantly, we've had 11 months in a row of economic growth. Revenues are coming in higher than the Revenue Estimating Conference projected late last year. So I think our growth is going to be slow but steady, which is very good news in terms of budgeting in the future.

And my opponent has misled people about the current state of the budget. If you look at what he's said, and what he has said for 12 months now, he says that we have a budget deficit of a billion dollars. That's not true. It's just simply not true…

“There are 28 states in America that do have budget deficits today, and Iowa is not one of them.”

Q – You will likely have to do without a lot of federal stimulus money though next year, right? How big a problem is that going to be? And then the Medicaid gap.

“First of all, the Medicaid commitment from the federal government is always unclear. And I think it's very unlikely that they won't do something at the federal level to help those 400,000 Iowans that rely on Medicaid. I do believe there will be in some way shape or form some additional federal investment, I don't know if it will be stimulus or Medicaid supplement. But there're no greater priority than taking care of the most vulnerable Iowans.“The good news is, right now, we spend a billion dollars on Medicaid. We leverage nearly two-and-a-half times that in federal Medicaid dollars. We've always funded, we've always found a way to fully fund Medicaid, and we will always find a way in the future to fully fund Medicaid.

“The good news is, right now, we spend a billion dollars on Medicaid. We leverage nearly two-and-a-half times that in federal Medicaid dollars. We've always funded, we've always found a way to fully fund Medicaid, and we will always find a way in the future to fully fund Medicaid.

But the reality is Terry Branstad has proposed a 15 percent budget cut, which is a $150 million cut to Medicaid. And if you cut the Medicaid budget by $150 million, you potentially lose all your federal Medicaid funding, which suddenly jeopardizes health care for 400,000 Iowans that are relying on it. That's children, adults with disabilities and senior citizens.