Grim budget picture for Iowa

OSKALOOSA, Iowa -- Iowa’s state auditor, David Vaudt, says he is worried about the state’s financial health.

He outlined his concerns about the state’s 2011 budget during a presentation in Oskaloosa this week. He also said he is troubled by what he views as a lack of long-term goal-setting in Iowa government.

Vaudt said Iowa had kept expenditures and revenues in line from the mid-1980s through the early 1990s. But more recent financial management trends are troubling, Vaudt said.

Vaudt called “unsustainable spending growth” a big part of the problem. Simply put, Vaudt said, state legislators have been spending more than the state is taking in.

In fiscal years 2008 and 2009, the state budgeted for revenue growth of almost 5 percent each year. But spending during that same two-year period was budgeted to grow by 15 percent.

“Somehow our elected officials thought that for every dollar of new revenue we could somehow spend a dollar and fifty cents,” Vaudt said.

This has created a spending gap that we have not been able to close, Vaudt said. Since 2007, the spending gap has risen to around $690 million, he said. In 2007, the budget was set up so that for every dollar the state spent, it had 99 cents in revenue.

“It would be as if a family with a $50,000 annual income back in 2007 had to put $500 on their charge card in order to balance their budget,” Vaudt said. “It’s not perfect, but manageable. Now that same family with a $50,000 income in 2010, just three short years later, would have to put $7,000 a year on their charge card in order to balance their budget.”

Vaudt said he is puzzled when he hears legislators say no one could have predicted Iowa’s current financial state. He said that he saw the recession coming before many others acknowledged it was here in 2008.

“When you hear from your elected officials, ‘we couldn’t have predicted this, no one could have ever seen this coming,’ make sure you tell them they didn’t listen to the experts that had seen it coming,” said Vaudt.

Vaudt pointed out that state law requires the governor’s budget to be balanced each year. According to Vaudt, Gov. Chet Culver said he was about $61 million below the spending limitation. Vaudt disagrees, saying the governor exceeded the spending limit by about $25 million.

An across-the-board, 10 percent budget cut ordered by Culver for all state entities resulted in many furlough days for Iowans, said Vaudt, and nothing is being done to follow up on this for nonunion workers.

“This means, everybody who’s taking those furloughs and unpaid leaves would have to do the same for fiscal year 2011,” said Vaudt.

When one combines these problems with underfunded education in Iowa, the auditor said, the current budget presents about a “$400 million problem.”

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