Rep. Clel Baudler liked a lot of what Iowa Gov. Terry Branstad said in his annual Condition of the State address on Tuesday.
“Probably the first speech he gave since I’ve been here or watched him before he came here that I agreed with most of what he said,” Baudler, R-Greenfield, said.
Baudler is in the same political party as Branstad but his reference to all of those Condition of the State addresses he’s heard reveal a hard fact about this important annual message and its state budget proposal from any Iowa governor:
Enacting everything the governor wants will not be easy, even though Baudler and other Republicans listening to the speech at the Iowa Statehouse in Des Moines are predisposed to agree with it.
And then there are the Democrats.
“I’m disappointed when it comes to Medicaid, I’m disappointed when it comes to mental health,” Rep. Bruce Bearinger, D-Fayette, said. “I’m disappointed that he feels proud of a budget that has – went from a nearly $900 million surplus in 2013 down to being $147.9 million in the hole.”
Bearinger said he was happy to hear the governor’s vow for safer highways, increasing Iowa’s skilled workforce and how Branstad brought attention to the state’s prominent use of wind energy.
Branstad called on Iowa legislators Tuesday to merge all state employee health insurance programs into one system, review boards and commissions for possible streamlining, increase K-12 spending 2 percent each of the next two years and cut state spending from organizations that perform abortions.
He also proposed what he called a major effort to increase computer literacy, with at least one high-quality computer science course in every Iowa high school, an exploratory computer science course in every middle school and an introduction to computer science in every elementary school.
Rep. Andy McKean said he does not know if the governor’s proposal of a 2 percent increase on K-12 education can be achieved.
“I hope that is it possible,” said McKean, R-Anamosa. “I think it is very ambitious considering the state of the budget, but I think it is a very admirable goal and one that I personally would support and try to help accomplish but whether or not that can be done remains to be seen.”
SWAN SONG FLAVOR TO THE ADDRESS
This particular Condition of the State address is assumed to be Branstad’s last, pending his appointment as U.S. ambassador to China by President-Elect Donald Trump. That move would shift Lt. Gov. Kim Reynolds into the governor’s seat.
Branstad spent much of his address recounting accomplishments made during his tenure as the longest serving state governor in U.S. history. He has served from 1983 to 1999 and 2011 until his presumed move to the ambassador’s position.
“There is no better job in the world than being the governor of the state that you love,” he told legislators.
“But sometimes we are called to serve in ways we had never imagined. As I approach the U.S. Senate confirmation process my priority is to continue serving the people of Iowa with the same energy and passion that I have brought to this office each and every day.”
Michael Bousselot, the chief of staff for both Branstad and Reynolds, said the budget proposal was from both executives. It is a three-year proposal, with adjustments in the current fiscal year that ends June 30 and a two-year spending plan for fiscals 2018 and 2019.
The spending proposal does not include some hot-button ideas that had been percolating.
While saying he wants to revamp health care benefits for public employees he did not propose scrapping or curtailing public employee collective bargaining. Branstad and Reynolds aides confirmed that doing so is not in their plans.
He also did not propose legislation for school choice, a popular idea for Republicans that the governor’s aides said he supports. It also does not include across-the-board spending cuts, reducing pre-kindergarten through 12th grade education spending or job furloughs the rest of this fiscal year.
His proposals include, however, passing a water quality bill patterned after one that passed the Iowa House last year. That House bill would shift some sales tax money into an excise tax-supported fund that pays for water treatment facilities upgrades and other needs. It did not get 0ut of a subcommittee.
“I hope we can work together to perfect and improve the legislation that will provide a long-term, dedicated and growing source of revenue for water-quality improvements,” Branstad said.
Rep. Charles Isenhart, D-Dubuque, said he favors the bill but that it needs to be tweaked in order to pass. Isenhart is the ranking Democrat last year on the House Environmental Protection Committee.
“What we did last year is not good enough,” Isenhart said. “We need to start with that, and do more and do better.”
Branstad’s proposals also include increasing penalties for drunken and disabled driving, including texting and driving. “Unfortunately, too many innocent bicyclists, motorcyclists, pedestrians and passengers have lost their lives on our roads,” Branstad told legislators.
The governor’s aides said the proposal includes higher penalties for striking a pedestrian or bicyclist and tougher monitoring for habitual drunken drivers who want a special permit to drive to and from work.
That monitoring could involve having to be tested at a sheriff’s office twice a day, although Baudler, the Greeenfield legislator who also is a former Iowa state trooper, said that would be impractical for rural residents who live far from the office.
Democrats can be expected to oppose Branstad’s call to withhold state funds from agencies that perform abortions. Rep. Amy Nielsen, D-North Liberty, saw that proposal as an attack on Planned Parenthood, which Republicans in the Statehouse have said they want to stop funding.
“Planned Parenthood is much more than just an abortion clinic,” Nielsen said, referring to the organization’s other reproductive and women’s health care services.
And even though Nielsen was in just her second day as a freshman legislator she sounded like a lot of veteran Democrats at the Statehouse when asked if she heard anything she liked in Branstad’s speech:
THREE YEARS OUTLINED IN SPENDING PLANS
In all, Branstad’s proposed budgets call for cutting $110 million from the current $7.2 billion budget and spending $7.94 billion in fiscal 2018 and $8.11 billion in fiscal 2019.
The shortfall in anticipated revenue is $147.6 million but the governor’s aides said $47.1 million of that can be saved with appropriation adjustments to one-time spending. The governor’s office has included almost $13.9 million in savings from a Medicaid payment surplus, offset by $4.3 million in additional spending for public defenders to calculate the estimated $110 million in budget adjustments.
The three-year approach to budgeting will bring fiscal 2017 into balance, as required by state law, and set a course for the next two years, Iowa Department of Management Director David Roederer said.
“The leaders have said, wait a minute, we have to resolve (fiscal) 17 first,” Roederer said, referring to legislative leaders. “That’s why the three fiscal years are so closely tied together.”
This year’s budget revenue projections have dropped as the Iowa Revenue Estimating Conference that analyzes state spending and revenue expectations anticipates possible sales tax revenue reductions at a time of wavering agriculture-related sales and possible changes in U.S. trade policy.
Roederer said the governor’s office expects revenue growth in the coming fiscal years. That upward revenue projection for fiscal 2020 and beyond is based on a 4 percent 25-year average, Roederer said.
Branstad said Iowa especially faced difficult spending decisions when he returned to the Statehouse for his second stint as governor.
“Since taking office in 2011, we have made the necessary changes to strengthen our economy and improve the quality of life in our state,” he said. “We’ve made tough decisions to give Iowans a smaller and smarter government.
“We’ve stayed the course with an unwavering commitment to create jobs, increase family incomes, reduce the size of government and give Iowa students a globally competitive education. We have provided significant tax relief for Iowans the past five years, especially for commercial property taxpayers.”
His reference to commercial property tax is to a bill he signed into law in 2013. While it represents the largest tax reduction in Iowa history and received bipartisan support, some Democratic legislators said it has led to the issues the state budget is now experiencing.
“As we look to fix this mess, we need to reign in some of that out-of-control spending on tax subsidies and tax credits to large businesses that frankly don’t need them,” Sen. Joe Bolkcom, D-Iowa City, said. “We have a tax code that is riddled with special interest tax giveaways.”
The Des Moines Register reported in an editorial that large businesses, including Holmes Murphy, Kum & Go and Kraft Heinz, have received subsidies that total more than $14 million from this bill.
Isenhart also questioned the commitment to creating new jobs and increasing family incomes. In 2010 Branstad set goals of creating 200,000 new jobs and increasing the average family incomes by 25 percent.
“I was hoping we’d find out today what kind of progress we’ve made towards those goals and he didn’t mention either of them so I take no news as bad news otherwise he’d be taking credit for it,” Isenhart said.
Branstad’s proposed budget references the goal of 200,000 new jobs but does not state specifically how many have been created. Bousselot said more people are working in Iowa than at any other time in Iowa history.