Iowa’s 2009 fiscal year ended on June 30, and if the Legislative Service Agency’s projections are correct, net revenues will fall well short of what legislators anticipated when they approved the 2009 budget. The Legislative Service Agency puts the possible shortfall at $161 million, whereas Iowa’s budget director Dick Oshlo says things don’t look that bad:

Total gross receipts for FY 2009 are $6.921 billion, which is only $57.7 million lower than the Revenue Estimating Conference’s official estimate of $6.979 billion.

Dick Oshlo, state budget director, said: “With yesterday marking the end of the fiscal year, we now know the state’s gross receipts for FY 2009. While the state’s tax receipts deteriorated more than expected during the last two months of the fiscal year due to the ongoing effects of the national economic recession, this is a manageable number. Fortunately, receipts improved during the final days of June.  At this point we see no legitimate reason for a special session to balance the state’s budget.”

Meanwhile, Republican State Representative and gubernatorial candidate Chris Rants says Governor Chet Culver should call legislators back to the capitol:

“It is time to quit worrying about the political ramifications of admitting that we have a deficit and get about the business of fixing it,” Rants said. “Gov. [Tom] Vilsack put aside partisan politics and called a special session in 2001 and 2002 to balance the budget after revenues declined. Culver needs to do the same.”

I wasn’t living here during Vilsack’s first term and don’t know how bad the projected shortfalls were in those years, compared to what Iowa is facing now. Culver’s office argues that we won’t know the real picture for a while yet:

The LSA’s figures are just estimates, and true net receipts won’t be known until September when the Department of Management closes the books on the fiscal year 2009 budget.

There is also revenue that will be collected within the next 90 days but allocated to the fiscal year that ended Tuesday, money that will improve the state’s financial situation and is not included in the LSA projections.

Culver Press Secretary Troy Price told the Iowa Independent last month that until accruals, expenditures and refunds are all taken into account there is no way of getting an accurate picture of the 2009 budget.

Like Chris Woods, I felt a special session was warranted last year to address flood relief and recovery issues, but that never happened. Incidentally, many Iowa Republicans opposed calling the legislature back in response to the flooding.

I’d like to hear from others in the Bleeding Heartland community. Should Culver call legislators back in light of the possible budget deficit?

I’ll update this post later today after Culver’s press conference with State Treasurer Mike Fitzgerald. According to Lynn Campbell of IowaPolitics.com, they will discuss the budget and “new info” on state finances.

LATE UPDATE: Forgot to update yesterday. As you can see from ragbrai08’s comment below, Vilsack called a special session in October 2001. Like Culver, he waited until all the numbers were in (rather than calling the legislature back shortly after June 30). It’s quite misleading for Rants to suggest Culver is being less prudent here than Vilsack.

At yesterday’s press conference, Culver said he is “very confident” the 2009 budget is balanced. He and Fitzgerald emphasized Iowa’s AAA bond rating:

“In a very partisan way, the Republicans running for governor are misleading people,” Culver says. “…So I think it’s very important to make sure that we hold those people accountable that are misleading Iowans. It’s just not fair. It’s not appropriate and there’s no need for alarm.” […]

Culver is also stressing that the Wall Street firm “Standard and Poors” just “reaffirmed” Iowa’s triple-A bond rating.

“What a timely testimonial from (Standard and Poors.)  They’re just looked at our books inside and out,” Culver says.  “They’ve looked at our debt.  They’ve looked at our revenue streams.  They’ve determined…that Iowa is one of the best-managed states in America.”

That triple-A bond rating (the highest on the Standard and Poors scale) means Iowa will be able to borrow money for the I-JOBS program at favorable interest rates.