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Fact Check: Culver and Branstad turn hostile over budget records
The gubernatorial campaign is barely more than two-weeks old, but Democratic incumbent Gov. Chet Culver and Republican former Gov. Terry Branstad are already engaging in a fiery war of words over the candidates’ spending histories.
Culver was first on the attack, launching an ad called “Cooked” that centered around the idea that Branstad “kept two sets of books” during his tenure as governor. Branstad fired back with an SNL-inspired ad entitled “Really,” which was quickly followed by another attack ad by Culver called “Eight Pay Raises.”
The Iowa Independent looked at a few of the claims each campaign has made during the back-and-forth to see what’s true, what’s mostly true and what’s an out-and-out falsehood.
Branstad left Iowa with a $900 million surplus: True
This is probably one of the Republican campaign’s favorite talking points. Not even the Democrats deny the state had a sizable budget surplus — actually more like $895.9 million — when Branstad left office, but whether or not the four-term governor should take credit for that number is up for debate.
One liberal blogger says Branstad was lucky to retire “near the peak of the Clinton boom years.” But other indicators suggest Iowa was doing well independent of the national situation: According to Iowa’s 1998 annual financial report, Iowa’s unemployment rate of about 2.6 percent was among the lowest in the country and about two full points below the national average.
But as Cedar Rapids Gazette columnist Todd Dorman points out, in response to a record budget surplus, Branstad and the GOP-controlled legislature signed into law $400 million in permanent tax cuts and $390 million in spending increases for ongoing programs.
“Branstad wasn’t around for the next economic downturn in 2001 when the house of cards collapsed,” Dorman wrote.
Culver has spent $2.5 billion more than he’s taken in: Mostly true
The Culver administration has technically spent a lot more than the state has taken in during his tenure, but the state has found ways to cover the gap.
“Gov. Culver has indeed signed into law authorizations for spending during his years in office that exceeded the flow of revenues over the same time period,” Iowa State University economist Dave Swenson points out. “He has consequently had to rely on either trust, one time use or categorically dedicated funds to fully fund commitments.”
In FY2009, for instance, the state expended $6.6 billion in federal funds, largely from the federal stimulus, unemployment insurance, and disaster assistance payments. And fiscal conservatives are quick to point out many of those funds won’t be available for next year’s budget.
Culver has created a billion dollar deficit: A little true
There’s a $1 billion something, but it’s not a deficit.
“Thanks to this budget, next year’s Legislature again faces a spending gap of nearly $1 billion. That means revenues would have to grow over 13 percent just to match this year’s true total spending for General Fund services,” State Auditor Dave Vaudt, a Republican who endorsed Branstad during the primary, said earlier this year.
In short, the $1 billion is a projected gap, not a signed-in-to-law budget deficit.
Culver forced a $500 million property tax hike: False
Craig Lang, president of Iowa Farm Bureau, says Culver’s across-the-board budget cuts implemented last year “have the potential to increase property taxes by another half billion dollars…”
In reality, the governor has no power to “force” local governments to change their property tax rates. Some of Iowa’s school districts or counties may implement tax increases to deal with slashes to state funding, but that’s hard to track and even harder to attribute to Culver.
“There is only indirect evidence of local tax increases as a consequence of state government stress, and the itemization of those increases would be virtually impossible,” Swenson told The Iowa Independent.
Former State Auditor Richard Johnson says Branstad “cooked the books”: True
Johnson, a Republican who endorsed Bob Vander Plaats in the party’s gubernatorial primary, has been very critical of the Branstad administration’s accounting practices, alleging that Branstad “cooked the books” or “kept two sets of books.”
Johnson says government officials moved funds between accounts on financial statements — listing some of the next year’s revenues on the current year’s statements, for instance — in order to balance the budget.
“That is the same as me saying that my checkbook must be balanced on June 30 regardless of my spending or actual situation to date because I am going to make, say, another $20,000 between now and September,” Swenson said.
Branstad took 10 years to deal with the budget problems: Mostly true
Branstad said on Iowa Press earlier this month: “… the books were never balanced on generally accepted accounting principles. They never had been until we did the spending reforms in ’92 and so I was the governor that corrected the financial problems that existed.”
However, Branstad said in he didn’t have enough support in the the legislature to approve budget reforms until 1992.