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The Iowa Senate will remain under the control of a slim 26-25 Democratic majority when it reconvenes in January 2012.
Republicans are not being honest with Iowans about the state of the budget and have chosen to play politics instead of working to overcome challenging economic realities, Gov. Chet Culver said Thursday.
Gov. Chet Culver discussed the state's AAA bond rating Thursday in Des Moines.
“I think its important for anyone in elected office, especially those running for governor, to be responsible and not try to scare people,” the governor said in a late afternoon press conference ahead of a three-day holiday weekend.
“I think Iowans, in part because of the political rhetoric, aren’t sure what the situation is,” Culver continued. “Unfortunately, that’s probably the intent of some of this.”
Culver was responding to attacks from Senate Minority Leader Paul McKinley and several Republican gubernatorial hopefuls who said the governor was state of denial in regards to whether the fiscal year 2009 budget can be balanced without a special session. They point to figures released Wednesday by the non-partisan Legislative Services Agency that predict a $161 million shortfall for the fiscal year that ended Tuesday.
The governor’s staff does not believe those figures are accurate. They predict a shortfall of only $58 million.
“Basically, we disagree because we believe they are making assumptions that are premature,” Culver said. “We believe they are basing that number on projections that are not accurate. What we need to do, and the appropriate thing to do, is to wait the 30 to 60 days to allow the state to close its books and have an accurate accounting of any possible shortfall.”
To prove his point, Culver pointed to a report released Thursday by Standard and Poor’s (S&P), the world’s foremost provider of independent credit analysis, praising Iowa’s fiscal management and re-affirming its AAA bond rating.
“What a timely testimonial from S&P,” Culver said. “They’ve looked at our books, they’ve looked at our debt, they’ve looked at our revenue streams and determined Iowa is one of the best managed states in America.”
State Treasurer Mike Fitzgerald, a Democrat, said S&P did a thorough review of the state’s finances before issuing Iowa its highest rating. The report specifically cited the state’s “good fiscal management,” strong reserve funds and low debt burden as the reason for the high rating. Iowa is one of only 11 states to have a AAA rating from S&P.
In addition, S&P gave high marks for the upcoming sale of I-JOBS bonds. S&P rated the I-JOBS bonds as AA. By comparison, an earlier state infrastructure program – Vision Iowa – initially received a lower rating of A+ from S&P.
“These ratings underscore the fact that, while we are facing tough economic times as a result of this recession, Iowa remains fiscally strong and well-managed,” Culver said.
Answering his Republican critics who say government spending has increased under his watch, Culver laid out nearly $170 million in cuts his administration made starting last December, saying “it’s important to make sure we hold those people accountable who are misleading Iowans.”
“In addition to $170 million in cuts, we spent 2 ½ percent less in 2010 than 2008,” he said. “That’s $135 million less. Again, in a very partisan way, Republicans running for governor are misleading people in suggesting that we’re spending more.”
Responding to the announcement of Iowa’s bond rating, McKinley said Culver continues to be in denial about the fiscal condition of this state and specifically criticized the $830 million I-JOBS bonding program.
“The governor just put nearly $1.7 billion on the state’s credit card to create temporary government work just a few short months ago and now he is again talking about Iowa’s bond rating again at a time when our state cannot afford to borrow and spend any more of our children and grandchildren’s money,” he said in a statement. “Republicans will continue to offer responsible spending cuts, will continue to fight burdensome tax increases and will continue to work to create sustainable private sector jobs that will provide a real shot of adrenaline to Iowa’s economy without growing the size and scope of state government.”
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