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Strategic Budget Advisory Committee (SBAC)
Strategic Budget Advisory Committee

More Budget Cuts on the Way

October 08, 2009

BY NICK PEDLEY - Daily Iowan

Gov. Chet Culver drew a bleak picture of the state’s budget Wednesday, leaving many concerned that the state’s universities will face even steeper budget cuts.

New projections show Iowa tax collections will be approximately 7.1 percent lower than predicted last spring, translating into a $414 million loss in tax revenue over the next six months, Culver said in a press conference Wednesday.

“The unanimous decision by the Revenue Estimating Conference today confirms my belief that the national economic recession continues to have a significant negative effect on our state’s economy,” the governor said in a press release.

He did not say how the cuts will affect the state’s universities, and he is expected to release more details today.

Rep. Vicki Lensing, D-Iowa City, said the projections are worse than many expected, and she is concerned about costs for students.

“I know the presidents of the universities have been working hard to keep costs away from students, but after this [budget cut], I think your going to see many things go up in price,” Lensing said.

A statement released by state Board of Regents President David Miles outlined what state institutions will face in upcoming months.

“As we face the likelihood of further budget reductions, our prior analysis and actions have prepared us to once again respond,” Miles said in a press release. “However, any additional spending reductions would create further hardships for our institutions …”

Several regents declined to comment on the cuts on Wednesday, noting the lack of details available.

If the UI sees cuts, freshman Brenden Hardy has deep concerns about tuition costs.

“I’m already going to be in debt for 20 years after I graduate, and if tuition goes up, it’s going to be extremely difficult to shake that off,” he said.

UI Provost Wallace Loh said he is unsure how much the university will be affected by the new budget.

“How much is cut from different departments across the state will all shake out within the next 24 hours,” he said.

The UI already faces $34 million in budget cuts, though federal stimulus money is helping offset those costs.

Many UI officials have voiced worries about the university’s budget in recent weeks, following the possibility of widespread teaching-assistant cuts.

UI Faculty Council members said at their meeting on Tuesday they are concerned the university could potentially see a 1 to 5 percent reversion in its budget. Each 1 percent roughly equals $2.35 million.

Culver has ordered Dick Oshlo, the state’s budget director, to reshape the current budget estimate to fit that of the Revenue Estimating Conference’s new prediction. Unlike the federal government, states cannot operate at a deficit.

Forty-eight states have addressed or still face budget issues in fiscal 2010. Only two states haven’t faced issues concerning their budget — Montana and North Dakota.

State Rep. Dave Jacoby, D-Coralville, expressed deep concern over the soon-to-be reformulated budget.

“The news went from bad to worse to even more worse today,” he said.

He said he originally expected the loss to be around 6 percent. After seeing the current projections, he predicted a rash of budget cuts across the board.

“People will be feeling these cuts in their ordinary day-to-day activities,” he said.

Overall, Iowa will see an 8.4 percent decrease in revenue from last fiscal year. This decrease means, in order to balance the budget, the state will need to cut more than 5 percent in spending.

Culver will announce plans to balance the 2010 budget today at 2 p.m.