Fitzgerald touts Iowa’s financial position
DES MOINES When it comes to state government's fiscal condition, State Treasurer Mike Fitzgerald is advising Iowans to believe the financial ratings not the political rhetoric.
Fitzgerald announced Monday that all three major U.S. financial rating agencies have given Iowa the highest rating of AAA, with Moody's joining Standard & Poor's and Fitch in upgrading Iowa to the best possible rating.
"This is exciting news for Iowa," he said. For the first time in our history, we have the highest ratings from all three rating agencies. Only seven other states have an across-the-board AAA rating.
Fitzgerald said the state credit ratings provide an opinion on the relative ability of an entity to meet its financial commitments. The West Des Moines Democrat said Iowa's AAA status flies in the face of doom-and-gloom criticism coming from Republican gubernatorial candidates, GOP legislators and State Auditor David Vaudt concerning the state's budget position and actions taken by Gov. Chet Culver and majority Democrats in the Legislature in dealing with the fallout from an international recession.
"Our economy is improving and we're growing," the treasurer said and the bullish ratings are testament to that.
Last week Vaudt criticized the Legislature and Culver for building a fiscal 2011 spending plan so heavily reliant on $736 million in one-time funding sources that it promises a budgetary "cliff" for the following year when state officials will face another projected funding gap exceeding $1 billion.
"The state auditor says that every year and the budget he's talking about is a year from next July", Fitzgerald said in an interview. "Well, my goodness gracious, volcanoes can blow up, meteors can hit the earth, who knows what's going to happen. That's just speculation."
Fitzgerald credited Culver's action last fall to reduce state spending by 10 percent across-the-board cutting deeper than the decline in state revenue and a major government reorganization effort with helping state government weather a tough economic storm. GOP legislators, by contrast, said not enough was done to downsize government operations, reduce state spending, help jump start job creation in the private sector, and avoid shifts to property taxpayers.
The state treasurer noted that other states have seen their ratings drop as they deal with huge deficits. By contrast, he said, Iowa's tax revenues are beginning to pick up, the state's leading economic indicators are heading in the right direction, there have been no major tax increases in recent years, and Forbes magazine recently recognized Des Moines as having the best business climate in the nation.
"Iowa is recovering from this economic downturn in a very strong way and the state's primed to grow and flourish," he said. "The proof is in the pudding. We've got AAA now by all three rating agencies. We've achieved that lofty status."