A lot of the problems with our federal government were starting to trickle down to our state government, including huge budget deficits, big government programs pushing debt onto our children and high unemployment. One of my biggest concerns was the budget deficit. By relying on federal stimulus money and our state reserve accounts to balance our budget, we had a budget gap of over $900 million.
In three short years, we have completely turned around the state budget. Today our state reserve accounts are full, with over $487 million in our cash reserve account and over $160 million in our economic emergency account. In addition, we have built up our ending balance to over $850 million. I compare this account to a savings account. It is money that has built up over the past three years.
We were able to build up our ending balance account because we stuck to a few very simple budgeting principles. The most important budgeting principle is we will not spend more money than we bring in. While it should be common sense that you don’t spend more money than you bring in, this was not happening in Iowa. Unfortunately we were mimicking the federal government by carrying huge budget deficits.
By sticking to this principle, we were able to not only turn around the state’s finances, we were able to stabilize the state and bring back trust to the state government. Instead of 10% across the board cuts like we had under Governor Culver, we are now able to fulfill the state’s commitments.
By practicing fiscal discipline, we are positioned to continue to build upon our success. I am excited about the future of Iowa and look forward to continue to work to make Iowa the best state in the union!