Branstad hopes to use budget fixes to “reposition” Iowa for growth

Gov. Terry Branstad told city leaders from around Iowa today he plans to propose tough state budget fixes that will “reposition” Iowa to usher in a new era of growth and opportunity.

The fifth-term Republican governor said the two-year state budget he unveils Thursday will provide $156 million in state aid to “back fill” school costs shifted to property taxpayers but would provide no new base funding for K-12 schools and would not increase spending for “categorical” education costs like teacher pay raises, class-size reductions, reading readiness or professional development programs.

Branstad said he intended to separate preschool funding from the K-12 school aid formula and establish a “means test” whereby parents who could afford to pay part or all of their 4-year-old child's early-childhood education would do so rather than continuing the program as a voluntary universal preschool offering.

“Our budget situation calls for tough decisions but they need to be fair, they need to be well-informed and we need to make sure that we have all the evidence that is necessary to make the best informed decision and to be able to make that on a timely basis,” Branstad told an Iowa League of Cities meeting.

“Previous budgets were basically short-term fixes and did not have the long-term planning. We believe it is critically important that we change the way that we do business, that we have a long-term sustainable budget and that we make the tough decisions,” he added. “It's a budget designed to straighten out the financial mess that we inherited and put us on a sustainable path to a prosperous and growing future.”

However, more than 250 member of Iowa Citizens for Community Improvement (CCI) held a noisy, midday “Ready to Rumble” rally in the Capitol rotunda and shouted a letter in unison outside the governor's office demanding that Branstad release a spending plan that fully funds essential public services, closes corporate tax loopholes and “puts people before profits.

“They say cut back, we say fight back,” CCI members chanted while waving a sea of signs that carried messages like “people matter more, money matters less,” “be the advantage, don't take advantage,” and “meet the need, stop the greed.”

“Let us remember that transformational change does not trickle down, transformational change rises up,” said Judy Lonning, a retired teacher from Des Moines.

Senate Majority Leader Mike Gronstal, D-Council Bluffs, said his 26-member caucus likely will part ways with the governor on K-12 funding, saying allowable growth for fiscal 2012 “should be somewhere above zero.” He said state law requires the Legislature to finalize the K-12 growth rate in 30 days following the governor's budget message and he intends to meet that deadline.

Speaking from his personal view not a caucus position, Senate President Jack Kibbie, D-Emmetsburg, said he was hoping Senate Democrats would be at 4 percent and if Branstad and House Republicans are at zero that they'd compromise at a 2 percent growth rate that school officials view as the break even point. Kibbie said “it's kind of goofy” to backfill property taxes and then set a zero allowable growth rate that carries a property tax increase under the state's school aid formula.

Sen. Bob Dvorsky, D-Coralville, chairman of the Senate Appropriations Committee, sent Branstad an open letter urging him to end the use of budget gimmicks and “for goodness' sake, please don't introduce any new ones” like two-year budgeting – a change the governor has indicated he wants lawmakers to adopt. Dvorsky also urged Branstad not to push for barriers to preschool access like vouchers or means testing – another element Branstad said would be part of the budget plan he proposes on Thursday.