Vastly different estimates were released Wednesday on how Iowa ended its fiscal year this week, but all projections indicate that Gov. Chet Culver will have to use cash reserves to balance the state budget.

Some political leaders say deep cuts to state services will be required, but others say the state has enough financial cushion to deal with the budget shortfall without cuts being needed.

The Legislature and Culver crafted a budget that assumed the state would have a positive balance of almost $45 million on June 30.

But Culver's staff released information Wednesday that said the state would have $58 million less on hand at the end of the fiscal year than budgeted.

And the nonpartisan Legislative Services Agency released information that the budget shortfall will be $161 million.

Iowa law requires state government to have a balanced budget at the end of the fiscal year.

Culver has the authority to transfer as much as $50 million from the state's emergency reserve account to achieve a balanced budget. That authority would more than cover the shortfall Culver's staff projected on Wednesday.

But the $50 million would not offset a shortfall of the size projected by the Legislative Services Agency.

That could mean a special session of the Legislature to deal with the problem.

Although the budget year ended Tuesday, the state will not officially close the books on the fiscal year until September. Until then, expenses and revenue accrued last fiscal year will be credited to that year even though the transactions will occur in the new year.

The different estimates of Iowa's financial condition are largely based on different methods of calculating revenue. The Legislative Services Agency estimate is based on year-to-date collections; Culver's estimate relies partly on money that has not yet been collected.

The National Conference of State Legislatures says states use various methodologies to make such estimates.

Even the best year-end projection is bad news for Iowa, with potential consequences to all residents as the state shifts millions of dollars out of its cash reserves and potentially cuts or delays state services.

Finger-pointing followed the news Wednesday.

Bob Vander Plaats, a Sioux City Republican who is running for governor in 2010, said Culver should make a "fiscal New Year's resolution" to "control his out-of-control spending."

"New Year's is a time when people often face the cold, hard facts, reflect on their shortcomings and resolve to take action and make constructive changes," Vander Plaats said.

Phil Roeder, a Culver aide, said the governor has consistently taken appropriate steps, such as across-the-board spending cuts, when those are needed.

"If we did what these jittery, reactionary Republicans wanted, we would wind up making unnecessary cuts to critical programs such as education and health care," he said.

Iowa has $441 million in reserves. That includes $99 million in the economic emergency account.

For the fiscal year that began Wednesday, the Legislature budgeted a $98 million ending balance.

Those safeguards will help protect the current fiscal year from financial dings, said Dick Oshlo, Culver's budget director.

"While the state's tax receipts deteriorated more than expected during the last two months of the fiscal year due to ongoing effects of the national economic recession, this is a manageable number," Oshlo said.

Senate Republican leader Paul McKinley viewed the situation differently: "The administration's statement is consistent with past practice. They are in denial, and they are spinning this rather than telling the public what is going on. It's almost like they are trying to hide the real numbers from the public."

Economists have warned that the worst economic times may be ahead and that lawmakers may have harsher budget problems to deal with in 2010.

The Legislative Services Agency estimates a $903 million gap between revenue and expense in the fiscal year that will begin on July 1, 2010.