Iowa finished fiscal year 2010 on June 30 with an ending balance of $335.6 million and $419 million in various reserve accounts, the Iowa Department of Management reported yesterday. Remarkably, the surplus is the second-largest in the last 10 years despite the weak national economic recovery of the past year.
It's been clear since July that the ending balance would exceed the $100 million projected when the legislature adopted the 2010 budget. Revenues during the second half of the fiscal year came in higher than expected.
Republicans have been lying about Iowa's so-called "budget deficit" all year. During the past three months, gubernatorial candidate Terry Branstad has continued to accuse Governor Chet Culver of spending too much, and GOP candidates for many other offices have joined in the chorus about allegedly "out of control" spending.
Don't expect Republicans to apologize for their demagoguery. Instead of acknowledging our state's fiscal health, Iowa House Republicans put out a statement today fanning fears about a huge Medicaid funding shortfall in fiscal year 2012 (that's the year that begins on July 1, 2011).
Kathie Obradovich's take on today's news at the Des Moines Register blog was stunning as well. Instead of pointing out that the final budget numbers disprove statements Branstad has been making all year, she chided Culver for "name-calling" against his Republican opponent. Why doesn't she ask Branstad to show how he would balance the budget without accepting federal fiscal aid or dipping into reserve funds, while keeping his promise to reduce the size of state government by 15 percent over five years? We've seen no budget details from Branstad, and his plans to cut corporate taxes while having the state take on more responsibility for funding mental health and education services simply don't add up.
More details on the final state budget numbers for fiscal year 2010 are after the jump, along with ending balances for each of the last ten fiscal years.
UPDATE: Iowa House Republican leader Kraig Paulsen still claims Culver "has a history of reckless and irresponsible budgeting" and accuses him of forcing a $500 million property tax increase. That Republican talking point has been debunked before. Paulsen asserts that Culver has "left a budget shortfall of over $1 billion for next year, including $600 million in Medicaid." Again, that refers to fiscal year 2012. The Iowa legislature will take account of updated revenue and expense projects when drafting next year's budget during the 2011 legislative session, just like legislators adjusted spending plans during this year's session to keep the 2011 budget balanced.
Press release from Governor Culver's office, September 30:
Governor Culver: Iowa's Budget is Balanced, Goes Forward with a $754 Million Surplus
FY10 ends with a $335.6 million ending balance, second-highest in a decade
DES MOINES - Governor Chet Culver today announced that Iowa ended the last fiscal year with the second-highest surplus in the last decade. The state's general-fund ending balance on Fiscal Year 2010 came in at $335.6 million, and gives the state a $754 million budget surplus going into Fiscal Year 2011.
"For all those concerned about the state budget, today's announcement shows that Iowa's fiscal house is truly in order," Culver said. "At a time when a majority of states are struggling, Iowa is moving forward. When times got tough, we made the tough decisions. And with our economy improving, these numbers show that state government is on solid ground."
The general fund's ending balance was originally estimated to come in at $100.7 million. Revenues came in $234.9 million higher, bringing the total year-end balance to $335.6 million. The higher-than-expected balance is a direct result of an improving economy and Culver's fiscal management, which includes hiring controls, travel restrictions, and finding efficiencies.
This brings the state's overall budget surplus for FY 2010 to $754.6 million, which includes the state's rainy day funds balance of $419 million and the FY10 General Fund ending balance of $335.6 million.
This is the second-highest General Fund ending balance this past decade, eclipsed only by FY06 when the ending balance came in at $361.9 million.
"While this is certainly good news, we know that our work is far from over," Culver said. "Our economy is recovering, but we must keep on working to ensure that every Iowan who wants a job, has one. As governor, I will continue to do everything in my power to grow our economy, create good jobs, and build a brighter future for Iowa."
State Budget Director Dick Oshlo will be available to answer reporter questions on the FY10 budget.
Kennedy Conference Room
Thursday, Sept. 30, 11 a.m.
1. General fund ending balances over the past decade, below.
General Fund Ending Balances
FY 2001 $0.0 million
FY 2002 $89.0 million
FY 2003 $-45.3 million
FY 2004 $166.0 million
FY 2005 $166.2 million
FY 2006 $361.9 million
FY 2007 $261.6 million
FY 2008 $196.4 million
FY 2009 $0.0 million
FY 2010 $335.6 million
*Prepared by the Iowa Department of Management, 9/29/2010
Press release from the Culver-Judge campaign:
Culver Hails State Budget Surplus, Challenges Branstad to "Tell the Truth, Terry"
Final state budget report shows $750 million surplus at end of FY '10
DES MOINES - Governor Chet Culver today hailed a year-end budget report that shows Iowa had a $750 million surplus at end of Fiscal Year 2010.
"The state is in the black, and Terry Branstad knows it," Culver said. "The budget has been balanced every day of the Culver Administration, and Terry Branstad knows it."
Culver continued, "With the second-highest ending balance in a decade, and with thousands of people working as a result of the I-JOBS program, I'm delivering a message to Mr. Branstad: It's time to tell the truth, Terry."
The state formally "closes the books" at the end of September on the state fiscal year, which runs from July 1 through June 30, with a report on total expenditures, total receipts, ending balance, and amounts in funds. The Department of Management announced today that the state currently has a $754 million surplus, including a $336 million ending balance.
"On the budget, Branstad has said time and time again that the state faces a billion-dollar deficit, and implied our budget is out of balance," Culver said. "Unfortunately for Terry, the facts always get in the way. Instead of a billion-dollar deficit, we have a $750 million surplus. The surplus is a direct result of Iowa's recovering economy, and the fiscal restraints and efficiencies we enacted in recent months.
"Since he began campaigning a year ago, Terry Branstad has been lying to the people of Iowa," Culver continued. "He lied about I-JOBS, saying it didn't create jobs. But tell that to the 7,500 people working on I-JOBS projects in July. He lied about the budget, saying it wasn't balanced. But today, we announced the budget is not only balanced, but we have the second-highest ending balance in a decade. The only thing true about Terry Branstad is that he can't tell the truth. So, Terry, it's time to 'fess up, and tell the truth to Iowans."
Iowa State Treasurer Mike Fitzgerald joined Governor Culver at a news conference today explaining that the state is in a fiscally sound position.
Culver Challenges Branstad to Tell the Truth
Throughout the campaign, Culver said, Terry Branstad's campaign has repeatedly tried to mislead Iowans about the Culver Administration's record of accomplishment.
On I-JOBS, Terry Branstad said that the program wouldn't create any real jobs. But the facts tell a different story. On Monday, an analysis of the program showed that more than 7,500 Iowans were employed on I-JOBS projects in the month of July. This is an increase over the 7,000 people that were employed on I-JOBS projects in June.
The fact is, the I-JOBS program is putting people to work, while meeting our state's infrastructure needs. The $875 million program is improving our roads, protecting our communities from future floods, funding quality-of-life projects such as trails, parks, and community attractions, and putting the conditions in place for future economic growth - all without raising taxes one cent. In fact, the program is paid for with gaming revenues, half of which come from out-of-state visitors.
Governor Culver's leadership stands in stark contrast to the Branstad administration's 16 years of failed fiscal policy. When times got tough, he raised taxes - including the sales tax and gas tax, twice each. And to hide his fiscal mismanagement, he kept two sets of books, preventing Iowans from seeing the true scope of state government's poor financial position.
"Terry likes to think that he is above the truth, but facts don't lie," Governor Culver said. "This election, Iowans will have a choice. We can either put the state back in the hands of someone who misleads and distorts for his own political gain, or we can continue to grow our economy, strengthen our communities, and keep Iowa moving forward."