Gov. Chet Culver and Iowa Republican leadership are engaging in a war of words over a recent report showing Iowa in a potentially perilous fiscal situation.

Gov. Chet Culver

The non-partisan Legislative Services Agency said earlier this week that net state receipts fell by 12.4 percent last month and pushed tax collections into the negative column by 4.5 percent. That left the state with an ending balance of $45 million and a potential $111 million shortfall this fiscal year, which ends June 30.

Iowa is legally bound to balance its budget every year.

During a conference call with reporters Thursday, Culver remained optimistic that the state can make it through this fiscal year without drastic measures, which could include layoffs or calling a special legislative session. The state can use its roughly $45 million ending balance, along with up to $50 million the governor is authorized to withdraw from the state’s cash reserve, to plug any holes, he said.

“We will be able to balance in 2009 as we have always believed,” Culver said.

In addition, Iowa’s $529 million share of federal stimulus dollars and the $830 million I-JOBS program will give the state’s economy a shot in the arm before the year is over, he said.

Senate Minority Leader Paul McKinley said the governor was in denial.

“Once again, Gov. Culver failed to recognize the serious consequences for every taxpayer as a result of his and legislative Democrats’ unsustainable record spending,” McKinley said, adding: “It is clear that the governor and his Democratic allies in the Legislature do not comprehend the severity of this spending problem and the taxpayers of Iowa will once again suffer because of their desire to grow Iowa’s government instead of growing Iowa’s economy and creating sustainable jobs.”

Republican Party of Iowa Chairman Matt Strawn criticized Culver for “ramping up his campaign operation” instead of focusing on governing the state, citing a Des Moines Register article quoting Culver as saying “I love campaigning.”

Culver called the Republican response “rhetoric and misinformation.”

“If Republicans choose to play politics with these issues, that’s their choice,” said Culver press secretary Troy Price. “In the meantime, the governor will continue to do what he was elected to do — serve Iowans and get things done for our state.”

Price said the governor still believes state revenues will end the fiscal year in line with the projections of the Revenue Estimating Conference. If that is the case, fiscal 2009 will be end balanced within the budget passed by this year’s legislature.

“While the final numbers are not in, Gov. Culver and Lt. Gov. Judge are well aware that the country and state continue to face an economic challenge, the likes of which we haven’t seen since the great depression,” Price said. “The good news is, Iowa’s economy is growing at a greater rate than the national average, with Iowa ranking ninth in the country in terms of economic growth this year.”