Budget Out of Balance

Iowa faces a $90 million deficit in its current budget due to faltering revenue collections that fell 12% last month and are down 4.5% for the year so far.

The state can tap a projected ending balance of $46.7 million and about $50 million in available reserves, but if revenues fall much further, the state will need to take additional steps to end the fiscal year June 30 in the black.

Democrats and Republicans differ on the state’s fiscal health based on the current and next fiscal year’s budget. Republicans believe Democratic Gov. Chet Culver’s fiscal 2010 budget is $1 billion in the red based on revenue projections and spending plans.

“Democrats have spent too much, cut too little and have left Iowans with two budgets that are likely out of balance and a third budget that has a $1 billion spending gap,” said House Republican Leader Kraig Paulsen. His position is based on projections by the Legislative Services Agency. Culver believes the agency’s numbers don’t fully reflect all revenue expected to be collected in fiscal 2010, including funds owed in fiscal 2009 that are not received until the next fiscal year.

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