State Budgets: Iowa Cancels Some Spending to Address Shortfall

In December, Gov. Chet Culver (D) outlined $75 million in spending cuts to cover a $38 million drop in expected revenue and unexpected spending on disaster relief (a total $100 million shortfall in the $6.05 billion budget). The largest items are the cancellation of a $37 million office building for state employees and a hiring freeze and overtime reduction that saves $12 million. Lawmakers will soon begin crafting the 2010 budget, which the State Auditor estimates has a $600 million shortfall, assuming only legislated spending increases. Iowa has a $620 million reserve fund.

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