Republican Party of Iowa         ……….        FOR IMMEDIATE RELEASE,

Contact:  Danielle Plogmann,  319.290.4185                  October 1, 2009

RPI Chair Strawn: The days of hiding your budget mess are over, Governor

Des Moines, IA – Republican Party of Iowa State Chairman Matt Strawn today challenged Governor Culver to finally take responsibility for the budget crisis facing Iowa and come clean with Iowans about our budget deficit.  Strawn said, “The days of hiding your budget mess are over, Governor.  Your failure to act earlier this summer means any coming spending cuts will have to be harsher and deeper than if you had been honest with Iowans from the beginning.”

This last July Governor Culver suggested a one-time accounting adjustment in gross sales tax receipts was evidence of economic recovery in Iowa and he credited, at least partially, his billion-dollar I-JOBS debt scheme for the beginnings of a turn around.  Most observers scoffed at the suggestion and pointed to a drop in net receipts of 6.1% as a clear warning that state spending would grossly exceed revenue in the coming year if no quick action were taken.

Now, two months later, the slide in state revenue continues.  According to the Legislative Services Agency (LSA), net receipts to state government for the first three months of fiscal year 2010 have declined by 9.1% as compared to one year ago.  Accounting for the fiscal shuffle Culver danced last week to “balance” the FY2009 state books, it appears Iowa state government is on course to run at least $300 million short this year.  This is in addition to the nearly one billion dollar hole projected for the next budget year.

“This year Governor Culver and his majority Democrats in the Iowa Legislature passed the single biggest budget in Iowa’s history–despite overwhelming evidence state revenue was still in a steep decline.  Well Governor, you can’t fool Iowans any longer and you can’t hide behind your phony budget tricks.  You spent too much, borrowed too much, and your refusal to aggressively act on the obvious warning signs is going to cost all Iowans dearly.

“Whether it will be deeper than necessary cuts in state services, higher property taxes that result from massive across the board cuts, or tax increases that the Governor and majority Democrats pass to close this gaping hole, no one will be spared the pain caused by Governor Culver’s continued mismanagement of our great state,” concluded Strawn.

The LSA report on Monthly General Fund Receipts through September 30, 2009 show revenue has declined in virtually every major category (personal income tax, -4.6%; sales/use tax, -0.2%; and corporate income tax, -27.5%) for the first three months of FY 2010.  Total net state receipts declined by 9.1%, or $141 million, for the first quarter compared to the same time period last year.  (Click here for a link to the full LSA report.)

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