Branstad's Budget Speech

We've gone from Captain Sunshine to Grandpa Gloom.

Former Gov. Chet Culver used to tell us over and over as the budget teetered and then collapsed in 2009 that all was well. Never mind what the nonpartisan Legislative Services Agency experts say about the big shortfalls. Happy days are around the corner.

Now, we've got Gov. Terry Branstad, who tells us over and over, as revenues rebound the economy brightens, that all is bad. Never mind what the nonpartisan Legislative Services Agency experts say about the shrinking budget shortfall.

We're getting whiplash.

"Today, I stand before you to present the state's budget for the next two years," Branstad told lawmakers gathered to hear him this morning. "But, at the risk of sounding a bit like the grandfather I am now, I think we need to start with a stern talking to."

And get all the reckless spending from one-time sources off my lawn.

Budget experts say the shortfall for 2012 is less than half what Branstad says it is. Branstad preaches austerity while the numbers suggest we might be able to have a little more bread with our water. This is frustrating to Democrats, and it's a disconnect that will form the basis for what promises to be some nasty budget negotiations between Republicans and Democrats who run the Senate.

There's going to be some pretty harsh words for this budget and its impact. Some of it deserved. It will take a while to figure out what it all means.

But, honestly, at first glance, this was what we expected from Branstad. This is what he promised to do on the campaign trail. This is why Iowans elected him.

And, as austerity goes, it could have been worse. 

Sure, he wants to cut the corporate income taxes (which he deftly referred to as the "small business tax'). But at least he's raising casino tax rates (a lot) to pay for it. I was concerned that he might use one-time surplus bucks to pay for an ongoing tax cut, which is the same stunt he pulled in the late 90s. We'll really get to see how much clout the gaming industry has now.

Still, it might be nice if Branstad could offer even a little solid evidence that tossing this $200 million cut into the state's $135 billion economy is really going to create jobs. We didn't hear that evidence today.

He's going to use growing revenues, and added state taxes we'll pay thanks to Bush tax cuts reducing our federal deduction, to cover promised reductions in commercial property tax rates. Again, that's real money, not some one-time shift. And I'd argue  it's a tax measure that could actually stimulate economic growth.

The problem is he only back-fills 50 percent of the losses to local governments. That's going to leave a big mark.

It doesn't appear he's signing on the the House GOP's new plan to give us all a whopping $205 income tax cut. Smart.

He cuts preschool sharply from $71 million to $43 million, with means tests to push middle, upper income parents to pay. He's not axing the whole thing, like the House GOP, so that's something. There's room for negotiation.

If the speech had a weak point open for attack, it's probably education. Branstad has called for making Iowa's schools world class again, and yet he's not giving them a dime in additional funding for two years. He is replacing money cut by Culver, good, but flat funding added to growing district expenses really equals a cut. Branstad said he would give districts "flexibility" to deal with this, but did not elaborate.

Branstad is calling his education summit this summer, with its recommendations potentially the subject of a fall special legislative session. And you thought the dog days would be boring.

You can watch the speech here.

Now, I'm interested to read what you think.