According to State Treasurer Mike Fitzgerald and Sen. Rich Olive, Iowa is in a good financial position. The two came to Webster City on Thursday to discuss the state budget passed during the 2010 legislative session.
"There's a good situation that I don't think people are hearing," said State Treasurer Mike Fitzgerald. "People are down in the dumps thinking we have a financial mess on our hands. But when you look at the state of Iowa, things aren't as bad as you might think."
Fitzgerald said that Iowa is at a 6.8 percent unemployment. Although he would like it to be lower, he said that it is almost 40 percent less than the national average.
"We see jobs coming to Iowa, just like in Webster City," he continued. "It's been happening all over the state. IBM in Dubuque has almost 1,300 new jobs. Microsoft is coming to Des Moines and Google has come to Council Bluffs - these are all positive things."
He said that national publications are saying that Iowa is the place to be. Recently in Forbes Magazine, the publication said that Des Moines is the best place to do business and grow; Money Magazine also named Ames as the ninth best city.
"Iowa has a good business climate and is a good place to do business," Fitzgerald said.
Standard & Poors, Moody's and Fitch have all given Iowa a "AAA" credit rating, a fact that only eight states can boast.
He also said that the non-partisan fiscal bureau said that the state has a $350 million dollar surplus.
"We also have $420 million dollars in rainy day funds," he said. "We have $40 million in our unemployment trust fund. We are one of only 18 states that fund."
Senator Rich Olive, vice chairman of economic growth, said that there a few things that he feels need to be cleared up with the people of Iowa.
"We have a 99 percent spending limitation based on estimated revenues for this fiscal year," Olive said. "Instead of spending 99 percent, we set it at 97.5 percent. The other thing that I am not sure everyone understands is that no one could have predicted the worldwide recession. Not only did we react to that, but we tried to put in place a proactive approach with the government reorganization bill."
He said that early retirement has made the state much more efficient and it will provide better services.
Fitzgerald agreed.
"With early retirement incentives, we got rid of 2,000 high paid jobs," he said. "It saved the state a lot of money."
Olive said that tax credits have been reviewed and some have been eliminated.
"We did a review of all the tax credits," Olive said. "We actually eliminated a number of those last session and revised a number of tax credits to be directed to small businesses. There are some real incentives for companies outside of Iowa looking to relocate or expand."
Fitzgerald and Olive talked about I-JOBS bonds and the confusion with the project.
"I don't know if everybody has understood the I-JOBS, but we did a number of things for that bonding," Olive said. "A lot of it went to the 2008 flooding. I did not have a community in my senate district that didn't receive some funds, whether it be storm sewers, water treatment, sanitary sewers or just a street. These are all infrastructures that in most communities haven't been touched for a long period of time. A company will not relocate to a community unless their infrastructure is in good shape. I think we are in very good shape to attract new businesses and help the existing businesses grow."
Fitzgerald said that from the $600 million dollars borrowed for I-JOBs, it will be payed back successfully.
"The legislature authorized that the first $43 million dollars each year in the budget for the next 23 years go to pay for the I-JOBS bonds," he said.
Much of that money comes from the $280 million dollars in gambling revenues the state gets per year.
"The money will go to build infrastructure," Fitzgerald continued. "20 million went to the Veterans' Home in Marshalltown, $50 million went to building the new prison in Mitchellville. These are things we have to do."
"We were able to help Webster City with dollars for a new industrial park," Olive added. "Imagine if we didn't have a business park or a road to it for someone who wanted to build here."
Governor Culver cut 10 percent across the board last fall, which caused educators and other agencies to scramble to reorganize their own budgets.
"None of us were happy to make the cuts," Olive said. "None of us are happy when we have to make the DHS in Clarion close or go part-time. It hurts the entire area and the services provided there. After the governor made the 10 percent across the board cuts, we came back last January and revised those numbers. We can do it a little more surgically than what he is allowed by law to do. We ended up putting $145 million back into schools, and more money into regents and community colleges."
He said that they are trying to put the money back into priorities: education, services and public safety.
"DHS has taken a huge hit and that's some of our most vulnerable folks out there," he continued. "We are trying to keep the money where it needs to be and make it grow. What it looks like now, is we might not need to make any additional cuts in 2012. That's what everyone's hope is. Then we can start easing money back into those departments where they need it."
He said that people are going to throw stones at them when they make cuts.
"When you look at education at 60 to 62 percent of the budget and 1.1 billion going to DHS, you are looking at 85 percent or so of the total budget," Olive said. "If you have to make additional cuts, there isn't a lot of other places to cut. You do the best you can."
Contact Carrie Olson at lifestyles@freemanjournal.net or call 832-4350.