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Branstad: ‘Iowa is working’

Governor proposes budget during Condition of the State address

January 15, 2014

DES MOINES - Gov. Terry Branstad on Tuesday announced a modest list of election-year budget priorities designed to move swiftly through the Iowa Legislature, a marked contrast to the ambitious plans he laid out last session to slash property taxes and invest in education.

Branstad's roughly $7 billion spending plan includes a tax break for veterans, a tuition freeze for college students and incentives to encourage Internet expansion in rural Iowa. He discussed those goals in his annual "Condition of the State" speech before a joint session of the Legislature.

In his remarks, Branstad - who is expected to run for a sixth term this year- repeatedly used the phrase "Iowa is working." At times, the speech sounded like a campaign pitch.

Article Photos

Gov. Terry Branstad delivers his Condition of the State address before a joint session of the Iowa Legislature, Tuesday, at the Statehouse in Des Moines.

"Iowa is working. The Iowa dream is here to be realized. But I believe we can - and we must - dream even bigger," Branstad said.

Last year, Branstad worked with lawmakers in the politically divided Legislature on a property tax cut, new education spending and an expansion of low-income health care. But this year Branstad and legislative leaders have made clear they are not thinking big. Most lawmakers are up for re-election, with some seeking higher office, and they are eager to get onto the campaign trail.

In addition, while the state is projecting a budget surplus of nearly $900 million, Branstad has said that money is mostly needed to pay for the policies approved in 2013 over the next few years. The budget plan includes $120 million to provide funding to local governments to make up for some of the lost property tax revenue. It also contains $54 million for the education policy changes.

Fact Box

Local legislators react to Branstad speech



Rep. Mark Smith, D-Marshalltown, said Gov. Terry Branstad's Condition of the State speech Tuesday set a good, bipartisan tone for the start of the 2014 legislative session.

"We hope to work together on the issues," said Smith, the new House minority leader.

Smith said he liked what Branstad said in regards to strengthening the middle class and promoting initiatives to help veterans during the speech. Smith said Branstad did not make any mention of increasing the minimum wage, which is one of Smith's priorities during the session.

Rep. Dean Fisher, R-Garwin, said the main theme Branstad had in the speech was "Iowa is working."

"That's correct," Fisher said. "The unemployment rate is down to 4.4 percent, which is good compared to the rest of the nation."

Fisher said there are some newly-unemployed in his district he is still not happy about - those who will lose their jobs at the Iowa Juvenile Home in Toledo this week.

He said they are still working on what they can do legislatively if a lawsuit trying to keep IJH open doesn't work out.

Fisher said he liked what Branstad said about trying to attract more veterans to live in the state.

"He wants to help make it easier for veterans to settle here in Iowa," Fisher said.

Sen. Steve Sodders, D-State Center, said Branstad's speech was more of a political speech during an election year, than a condition of the state.

Sodders said the claim that Branstad made of creating 137,000 jobs in the state is off base.

"He claims he created 137,000 jobs and the real number is about 30,000," Sodders said. "He doesn't count the jobs lost."

Sodders said he agreed on the governor's initiatives to increase broadband Internet access and encourage veterans to settle in Iowa. Sodders said the Senate is in the early meeting stages of the session and he expects to start seeing bills later this week.

The budget proposal for the fiscal year that begins July 1 represents about an 8 percent increase in general fund spending, compared with the current fiscal year. In addition, there is some spending allocated from other state funds.

For new spending, Branstad has focused on smaller programs with a good chance of bipartisan support.

Under the proposals for veterans, military pensions would be fully exempted from state income tax, compared to the current system where retirees may exempt a portion of that income. That would cost the state a projected $10 million in lost revenue.

"In Iowa, we honor our veterans - not only with words and ceremonies, but with action," Branstad said.

A bullying law has failed to advance in the Legislature in the past. Branstad's plan this year would require schools to notify parents if their child is involved in a bullying incident. It also would give schools some discretion to deal with bullying off school grounds, under certain conditions.

"We can untie the hands of schools to allow them to better address cyberbullying," Branstad said.



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