Legislators may respond to Branstad’s executive actions

DES MOINES - Terry Branstad has partnered on some significant bipartisan agreements with a split-control Legislature during his second stint as Iowa's governor.

But the Republican last year struck out on his own in big ways, and that might have an impact on this year's legislative session.

Last year, Branstad used his authority as the state's chief executive to close state-run mental health hospitals, shift management of a state-run health care program to private companies, create a tax break for manufacturing companies and veto millions of dollars devoted to public education.

'We've made some tough decisions,” Branstad said in an interview Tuesday.

The question is whether those tough decisions will affect business conducted this year by state lawmakers.

Branstad defended his veto of $56 million for public education projects as preventing unreliable budgeting. But the move upset many lawmakers, especially Democrats, because the allocation was part of a compromise that helped end protracted budget negotiations between legislative Democrats and Republicans.

'Yes, it does complicate the relationship,” Senate Majority Leader Mike Gronstal, D-Council Bluffs, said recently. 'And it will make it tough this session.”

Democrats also were dismayed by Branstad's administration action to clarify state tax law regarding exemptions on manufacturing equipment. The resulting impact to state tax revenues will be more than $40 million annually, according to the state's fiscal estimating agency.

Critics said the change should have been made through the legislative process, not by Branstad alone.

'From our perspective, in a time when the governor says we cannot afford $55.7 million in one-time money for K-12 education, but he's willing to give away $45 million a year in perpetuity to the business world that just got a $300 million commercial property tax break, we think they are short-changing K-12 education in the state of Iowa, and they're doing it directly by doing this,” Gronstal said.

Lawmakers could write legislation to block the change from taking place; it is scheduled to go into effect July 1. But Republicans have not signaled a willingness to block it, and they crafted legislation in recent years to do exactly what Branstad did.

Democrats likely will call for more oversight of the state's Medicaid program, which costs $5 billion annually to operate and serves more than 600,000 Iowans, now that Branstad's administration shifted management from state offices to three private health-care companies.

But Republicans disagree with the need, saying the Legislature's normal oversight powers and duties are sufficient.

'The question is do we need separate oversight, and I'm not convinced we can't do it in our regular committees and in our oversight committee we have currently,” House Speaker-select Linda Upmeyer said.

For his part, Branstad has stuck by his decisions, despite the critics and the potential ripples in the Statehouse.

'I'm the governor of all the people of Iowa, and it's my responsibility to see the state is well-managed,” Branstad said. 'It's one of the reasons why I came back and ran for governor again.”