The state officially closed the books on the 2010 fiscal year with the second highest surplus in the last ten years. The surplus was higher than expected with $335.6 million and an additional $419 million in the state’s savings accounts. Non-partisan experts had anticipated a $100 million surplus but the improving economy and our fiscal discipline led to an additional $234.9 million surplus when the fiscal year ended in June.
The state’s savings accounts, which are limited to 10% of general fund revenues, were created to help the state weather economic recessions, emergencies, and disasters. The two savings accounts, which are the Cash Reserve Fund and the Economic Emergency Fund, will now have a combined balance of about 8%, just short of the 10% limit. Under Iowa’s budgeting laws, the state can only spend 99% of projected revenues with the surplus flowing into the state’s savings accounts.
Last year when the recession began to hit Iowa, we took quick action to keep the budget balanced and tighten our own belts in the Legislature. We cut our own pay, banned out of state travel, and froze the pay of employees to reduce our own spending by 10%.
In another effort to trim spending, we reorganized state government and saved taxpayers $300 million by eliminating wasteful spending, cutting bureaucratic commissions, reducing energy costs, consolidating state agencies, and delivering services to Iowans more efficiently. Next year, the reorganization effort will save the state another $111 million.
We wrapped up the abbreviated 2010 legislative session earlier this year after balancing the state budget without raising taxes for the current fiscal year 2011. With a projected $183 million surplus at the end of the 2011 fiscal year, our state remains in solid financial shape, and at the end of next year our savings accounts will again be filled to the 10% limit set by law.
In these tough economic times, I’ve kept focused on helping our economy grow and create good paying jobs. In addition to expanding technical and financial support for small businesses and continuing to make Iowa a world leader in renewable energy, we should help Iowans revitalize their downtown, improve their quality of life, and bring more jobs to their community.
The initiative asks Iowans to work together to develop a vision for the future of their communities and combines state resources with local assets to enhance the unique and authentic qualities in communities, regions, or neighborhoods.
Main Street Iowa is another successful initiative used in 46 communities across Iowa to revitalize historic commercial districts and help hundreds of small business owners with better facilities and more customers.
This year alone, there is $185 million available to help businesses, entrepreneurs, and communities strengthen our economy and create jobs. For more information, log on to