# 2009 Budget

Layoffs for some, furloughs for others as Culver announces budget cuts

This afternoon Governor Chet Culver announced the next steps toward cutting $565 million from the 2010 budget. I’ve posted the governor’s statement after the jump, and you can find pdf files with more details about the cuts here. (UPDATE: The Des Moines Register posted this chart showing the cuts Culver approved.) Highlights:

Culver is ordering all of the 3,258 non-contract (that is, non-union) employees in the executive branch “to take seven days without pay between now and the end of the fiscal year. I do not believe it is fair for any state employee to not contribute toward our solution.”

Culver approved spending cut plans submitted by 28 department heads and approved, with minor changes, spending cut plans submitted by 6 other department heads. The Des Moines Register’s Jennifer Jacobs summarized the impact:

Altogether, the 34 approved plans will save the state’s general fund about $520 million, he said.

The approved plans call for a total of 180 layoffs and the elimination of 229 open positions. The total job loss, so far, is 410.

Here’s where there the layoffs will be: 79 from the Department of Human Services, 35 from the Department of Revenue, 10.8 from the Department of Inspections and Appeals,  13 from the Department of Education, eight from Iowa Public Television, eight from the Department of Public Health, seven from the Department of Economic Development, seven from the Department of Cultural Affairs, four from the Department of Administration, four from the Department of Management, two from the Alcoholic Beverages Division, two from the Department of Veterans Affairs, and one from the Iowa Ethics & Campaign Disclosure Board.

Forty-three state employees tentatively set for layoffs in the Department of Commerce will be spared. The 10 percent across-the-board cut will not be applied to the divisions of banking, credit union, insurance and utilities divisions, which are agencies within the commerce department.

Culver rejected the $45 million spending reduction plans offered by the directors of the Department of Corrections and the Department of Public Safety, saying,

I reject these two plans because I am hopeful that we can find an alternative to laying off hundreds of correctional officers, state troopers and law enforcement personnel.

I am rejecting these plans because public safety is essential to our daily lives.

That is why yesterday I sent a letter to the state’s three bargaining units – AFSCME, Iowa United Professionals, and the State Police Officers Council – who represent more than 16,000 state employees – asking them to join me in negotiations for amending their current contract.  This past Saturday, I met with AFSCME’s bargaining unit – which represents more than 13,000 state employees – to discuss ideas for moving forward.  We followed that meeting with a three hour session yesterday morning and the talks have been very productive.  And earlier today, I met with the State Police Officers Council representatives and those talks were productive.  Finally, I will meet with the Iowa United Professionals union leadership as soon as schedules permits, but our staff has been in daily contact with their representatives.

I seek substantive discussions with all three unions on issues that may impact our state budget cuts.  Our goal is to do everything we can to prevent layoffs related to essential public safety.

If we cannot reach agreement with the unions, then I will implement the layoff plans submitted by these two departments.

Unfortunately, we do not have an endless amount of time in which to reach an agreement and to have it ratified by each respective union. I expect to know by Friday, November 6 whether we will move forward in discussions with the unions or implement the layoff plans.

The president of AFSCME Council 61 issued a statement saying his union will negotiate with the governor in the hope of avoiding layoffs. Both sides are promising not to release any details about the discussion until the talks conclude, but no doubt some proposed alternatives to layoffs will leak out before then.

The Des Moines Register’s Tom Beaumont covered Republican gubernatorial candidates’ ideas for cutting the budget here.

Share any relevant thoughts in this thread.

Continue Reading...

Do Iowa's budget problems warrant a special legislative session?

Iowa’s 2009 fiscal year ended on June 30, and if the Legislative Service Agency’s projections are correct, net revenues will fall well short of what legislators anticipated when they approved the 2009 budget. The Legislative Service Agency puts the possible shortfall at $161 million, whereas Iowa’s budget director Dick Oshlo says things don’t look that bad:

Total gross receipts for FY 2009 are $6.921 billion, which is only $57.7 million lower than the Revenue Estimating Conference’s official estimate of $6.979 billion.

Dick Oshlo, state budget director, said: “With yesterday marking the end of the fiscal year, we now know the state’s gross receipts for FY 2009. While the state’s tax receipts deteriorated more than expected during the last two months of the fiscal year due to the ongoing effects of the national economic recession, this is a manageable number. Fortunately, receipts improved during the final days of June.  At this point we see no legitimate reason for a special session to balance the state’s budget.”

Meanwhile, Republican State Representative and gubernatorial candidate Chris Rants says Governor Chet Culver should call legislators back to the capitol:

“It is time to quit worrying about the political ramifications of admitting that we have a deficit and get about the business of fixing it,” Rants said. “Gov. [Tom] Vilsack put aside partisan politics and called a special session in 2001 and 2002 to balance the budget after revenues declined. Culver needs to do the same.”

I wasn’t living here during Vilsack’s first term and don’t know how bad the projected shortfalls were in those years, compared to what Iowa is facing now. Culver’s office argues that we won’t know the real picture for a while yet:

The LSA’s figures are just estimates, and true net receipts won’t be known until September when the Department of Management closes the books on the fiscal year 2009 budget.

There is also revenue that will be collected within the next 90 days but allocated to the fiscal year that ended Tuesday, money that will improve the state’s financial situation and is not included in the LSA projections.

Culver Press Secretary Troy Price told the Iowa Independent last month that until accruals, expenditures and refunds are all taken into account there is no way of getting an accurate picture of the 2009 budget.

Like Chris Woods, I felt a special session was warranted last year to address flood relief and recovery issues, but that never happened. Incidentally, many Iowa Republicans opposed calling the legislature back in response to the flooding.

I’d like to hear from others in the Bleeding Heartland community. Should Culver call legislators back in light of the possible budget deficit?

I’ll update this post later today after Culver’s press conference with State Treasurer Mike Fitzgerald. According to Lynn Campbell of IowaPolitics.com, they will discuss the budget and “new info” on state finances.

LATE UPDATE: Forgot to update yesterday. As you can see from ragbrai08’s comment below, Vilsack called a special session in October 2001. Like Culver, he waited until all the numbers were in (rather than calling the legislature back shortly after June 30). It’s quite misleading for Rants to suggest Culver is being less prudent here than Vilsack.

At yesterday’s press conference, Culver said he is “very confident” the 2009 budget is balanced. He and Fitzgerald emphasized Iowa’s AAA bond rating:

“In a very partisan way, the Republicans running for governor are misleading people,” Culver says. “…So I think it’s very important to make sure that we hold those people accountable that are misleading Iowans. It’s just not fair. It’s not appropriate and there’s no need for alarm.” […]

Culver is also stressing that the Wall Street firm “Standard and Poors” just “reaffirmed” Iowa’s triple-A bond rating.

“What a timely testimonial from (Standard and Poors.)  They’re just looked at our books inside and out,” Culver says.  “They’ve looked at our debt.  They’ve looked at our revenue streams.  They’ve determined…that Iowa is one of the best-managed states in America.”

That triple-A bond rating (the highest on the Standard and Poors scale) means Iowa will be able to borrow money for the I-JOBS program at favorable interest rates.

Continue Reading...