Branstad on the State Budget

Another excerpt from Republican candidate for governor Terry Branstad's editorial board meeting this week.

Q – As you look back on what the Legislature did in the past year, and Gov. Culver, as far as the budget and the size of government, which are big issues on this year's campaign, how would you follow up on what's been done so far?

“First of all, I think it's pretty erratic the way, and I would say it was really…reckless and irresponsible I guess, the way…First of all, the nation went into a recession in September of 2008. And in the 2009 session, Gov. Culver and the Democratic Legislature passed the biggest budget in history over the objections of the Republicans who voted against all of it, and offered several amendments to cut spending by hundreds of millions of dollars. And over the objections of the state auditor, who is a CPA, and warned it didn't add up and it didn't make sense. And even the even the nonpartisan Legislative Services Agency.“And you may recall during that whole year, 2009, Gov. Culver kept saying Republicans are just a bunch of naysayers, the party of no and all this kind of stuff. Everything's fine and you guys are just wrong. That was true, I mean, that's what he said up until October 8, which is, the anniversary of when he did this. Oct. 8 he did this massive 10 percent across the board cut, the biggest cut in Iowa history.“So we went from the biggest budget in Iowa history to the biggest across-the-board budget cut. Now, I think that's reckless and irresponsible because, first of all, you shouldn't pass the biggest budget when the nation's in a recession. Secondly, you shouldn't do a massive across-the-board cut which led to all kinds of layoffs, furloughs, closing down the courthouses so many days a week, 20 days a month and all this. You could have brought the Legislature back, and done a selective reduction.“But here's a governor who doesn't conduct budget hearings and doesn't know the details of the budget. That's another thing when I got in this campaign I couldn't believe. I used to spend the whole month of December going over the budget, line-item by line-item. Gov. Culver doesn't do that and he doesn't know the details of the budget.“So he took the easy way out and did this across-the-board cut. There's all sorts of unintended consequences to that. There's federal dollars that we lost out on because it has to be matched. When you do the across-the-board cut, then the state match is gone. There are furloughs that had to be made in state government.“And now, he's bragging that we, that he cut way too much across the board, because then revenues come in a little above expectations, and the state ends with, but how did they, they used one-time money, federal stimulus money, money from the Senior Living Trust Fund, money from the leaky underground storage tank fund, the snowmobile fund, and basically funded general fund programs off budget, with non-general fund sources of revenue. So the state spent way more than it took in, violating the whole concept of generally accepted accounting principles, which we put in place in '93, which we enforced, with the help of Ron Corbett, through that whole period from '92 through '99.“So I just think it's been reckless and irresponsible, erratic, biggest budget, biggest budget cut, then braggin' about the ending balance when in fact the ending balance is only because you funded, Medicaid alone has a $600 million shortfall looming in the next budget year because they used one-time stimulus money and other one-time money for that budget. It's a huge problem, and obviously it's created a whole lot of uncertainty. And it's also, because you made that big across-the-board cut, forced local school districts to use their cash reserve and now local schools have raised their property tax levies to recoup that, the largest property tax increase in 30 years according to the Iowa Farm Bureau.“People want stability and predictability. I'm not going to promise we're going to give a 4 percent allowable growth to schools next year and then surprise them with a big across the board cut. We intend to deliver what we say we're going to do.”

“And you may recall during that whole year, 2009, Gov. Culver kept saying Republicans are just a bunch of naysayers, the party of no and all this kind of stuff. Everything's fine and you guys are just wrong. That was true, I mean, that's what he said up until October 8, which is, the anniversary of when he did this. Oct. 8 he did this massive 10 percent across the board cut, the biggest cut in Iowa history.

“So we went from the biggest budget in Iowa history to the biggest across-the-board budget cut. Now, I think that's reckless and irresponsible because, first of all, you shouldn't pass the biggest budget when the nation's in a recession. Secondly, you shouldn't do a massive across-the-board cut which led to all kinds of layoffs, furloughs, closing down the courthouses so many days a week, 20 days a month and all this. You could have brought the Legislature back, and done a selective reduction.

“But here's a governor who doesn't conduct budget hearings and doesn't know the details of the budget. That's another thing when I got in this campaign I couldn't believe. I used to spend the whole month of December going over the budget, line-item by line-item. Gov. Culver doesn't do that and he doesn't know the details of the budget.

“So he took the easy way out and did this across-the-board cut. There's all sorts of unintended consequences to that. There's federal dollars that we lost out on because it has to be matched. When you do the across-the-board cut, then the state match is gone. There are furloughs that had to be made in state government.

“And now, he's bragging that we, that he cut way too much across the board, because then revenues come in a little above expectations, and the state ends with, but how did they, they used one-time money, federal stimulus money, money from the Senior Living Trust Fund, money from the leaky underground storage tank fund, the snowmobile fund, and basically funded general fund programs off budget, with non-general fund sources of revenue. So the state spent way more than it took in, violating the whole concept of generally accepted accounting principles, which we put in place in '93, which we enforced, with the help of Ron Corbett, through that whole period from '92 through '99.

“So I just think it's been reckless and irresponsible, erratic, biggest budget, biggest budget cut, then braggin' about the ending balance when in fact the ending balance is only because you funded, Medicaid alone has a $600 million shortfall looming in the next budget year because they used one-time stimulus money and other one-time money for that budget. It's a huge problem, and obviously it's created a whole lot of uncertainty. And it's also, because you made that big across-the-board cut, forced local school districts to use their cash reserve and now local schools have raised their property tax levies to recoup that, the largest property tax increase in 30 years according to the Iowa Farm Bureau.

“People want stability and predictability. I'm not going to promise we're going to give a 4 percent allowable growth to schools next year and then surprise them with a big across the board cut. We intend to deliver what we say we're going to do.”

Q – But how would you follow up if you're elected?

“Well, first of all, I've already laid this out with the State Auditor, David Vaudt, we did this whole truth in budgeting tour of this state. We intend to put together a five-year strategic budget plan for the state, kind of like we did at Des Moines University. So we're going to have a 5-year strategic plan, and then it will be updated annually.“And insist that the Legislature pass a biennial, not an annual, budget. A two-year budget, like they do in Nebraska and South Dakota and Texas and many other states.“And then in the second year of the budget, spend that on oversight and reviewing every department, program and agency, and looking at ways you can do things more efficiently. So you spend the first year in appropriations and the second year in oversight. So that's the structure that we want to put in place.“And then enforce the 99 percent spending limitation. In other words, if they put in an appropriations bill, as they did in the last four years 33 times, not-withstanding language, not-withstanding the law that says you can only spend 99 percent of December revenue estimate and they spend more than that, I will veto anything that violates that spending limitation. And frankly, that spending limitation should be in the Constitution so they can't circumvent it."

“And insist that the Legislature pass a biennial, not an annual, budget. A two-year budget, like they do in Nebraska and South Dakota and Texas and many other states.

“And then in the second year of the budget, spend that on oversight and reviewing every department, program and agency, and looking at ways you can do things more efficiently. So you spend the first year in appropriations and the second year in oversight. So that's the structure that we want to put in place.

“And then enforce the 99 percent spending limitation. In other words, if they put in an appropriations bill, as they did in the last four years 33 times, not-withstanding language, not-withstanding the law that says you can only spend 99 percent of December revenue estimate and they spend more than that, I will veto anything that violates that spending limitation. And frankly, that spending limitation should be in the Constitution so they can't circumvent it."

Q- What would you have done with the stimulus money?

“I would have been very careful to analyze the stimulus money to determine what could be done with it. I would have tried to do as much of it on one-time things like flood recovery and infrastructure as possible. When you plow it into ongoing expenses, then you've got problems because you don't have that money the next year. What are you going to do the next year?“But some of that stimulus money, I understand, had strings attached that also say you have to have a maintenance of effort. So that's going to tie our hands now, because if we don't maintain that effort, if we don't maintain that level of spending on those ongoing programs with our own state dollars, then we're going to have to pay it back. I would have been very careful about that. Because I would have recognized when you take something with those kind of strings attached, you're obligating the future. And that's why we have this projected budget deficit that I say is such a looming problem."

“But some of that stimulus money, I understand, had strings attached that also say you have to have a maintenance of effort. So that's going to tie our hands now, because if we don't maintain that effort, if we don't maintain that level of spending on those ongoing programs with our own state dollars, then we're going to have to pay it back. I would have been very careful about that. Because I would have recognized when you take something with those kind of strings attached, you're obligating the future. And that's why we have this projected budget deficit that I say is such a looming problem."

Q – But the criticism has been that it's difficult to simultaneously criticize the governor for making those cuts and at the same time saying you wouldn't have spent the stimulus…

“I would have made budget cuts. I would have never insisted on the biggest budget in Iowa history to begin with. I would have listened to Republicans in the Legislature and the auditor and passed a smaller budget. And then when revenues fell below expectations, I would have brought the Legislature back to be more selective in the reductions. So that's why I say he was kind of reckless and irresponsible.“Biggest budget in history. Biggest budget cut, trying to prove how tough he was. You need to be sensitive and make thoughtful decisions. And that was not done. And it wasn't done because he didn't take the time to do the budget hearings and understand the details of the budget and understand the implications of the decisions that were made.”