Branstad takes budget debate to Iowans on campaign-style tour

ELKADER - If it was the fourth year of his term, Gov. Terry Branstad's barnstorming of Iowa could be chalked up to re-election politics.

Branstad is in just the fourth month of his current term, however, and he's on a campaign-style tour of Iowa to explain to voters why he's demanding the Legislature reign in spending, adopt a two-year budget and reduce taxes.

“What we're doing is restoring honesty and integrity in the budget process,” the fifth-term Republican told audiences in several northeast Iowa communities last week.

He does his best to convince skeptics like Dale Fox, the mayor of Strawberry Point, which has a general fund budget of about $3 million a year.

“We're going to have a challenge” making ends meet if the governor's plan to reduce commercial property taxes is adopted by the Legislature, Fox said.

Strawberry Point will see commercial property tax revenue drop by about $170,000 over the five-year phase-in, he said.

With a population of 1,270, Strawberry Point joins Des Moines and Cedar Rapids among the largest one-third of Iowa cities. Fox worries about smaller communities.

“Are we going to end up with ghost towns?” he said.

Branstad tells Fox and other local elected officials that he's putting money into his five-year strategic plan to backfill local government coffers. He's proposed $50 million the first year and adding $50 million a year until the replacement funds reach $250 million.

Questions vary at each town hall meeting. Tourism is a concern in Elkader, economic development in Oelwein. At each stop, however, Branstad is asked about property taxes, education and preschool.

He tells Courtney Bentley of West Union he supports preschool for 4-year-olds but believes parents should pay part of the cost, more as their incomes go up.

“With limited resources, we have to spend wisely,” he said, explaining education gets the lion's share of the state budget.

In Oelwein, the question is broader: “Why are you messing with our children's future?” More questions follow about his proposal for no increase in allowable growth for K-12 schools and his plan to restructure preschool.

That launches Branstad into a discourse about his July summit to bring Iowans together to chart the state's education future.

“We're not going to keep doing it the way we've been doing it,” he said. “What we've been doing isn't getting the results we want.”

Branstad wants to make it harder to become a teacher by requiring more rigorous preparation, pay teachers better with salaries based on student achievement and demand better performance from students.

Despite criticism, questions and reservations about his proposals, Branstad can't curb his enthusiasm. He interrupts questioners with data, background, examples and personal experiences.

He tells Ralph Livingston, Guttenberg mayor pro tempore, about fishing on the Mississippi River there. When someone mentions Big Springs Fish Hatchery near Elkader, Branstad talks about the progress Iowa has made in developing streams that sustain trout.

Mention a town, he's been there. Ask about a state program, he'll explain its origins. Pick a topic, he has an opinion:

The job

“People say I must be crazy to take all the abuse that goes with the job, but I knew that going in,” said Branstad, 64, who defeated first-term Democrat Chet Culver in 2010 after being out of office for 12 years.

“I knew we were inheriting a financial mess. I knew that we were going to have to make some tough decisions upfront to get things back on track.”

He's enjoying the challenge.

“I think it's an opportunity to really make a difference and to get some things done.”

He won't get it done overnight.

“I've got all the patience and perseverance in the world. I've been through this before.”

The Legislature

It would be easier to get his agenda enacted with more Republicans in the Legislature. The GOP controls the House, but Democrats have a slim majority in the Senate.

“Frankly, I'm excited about getting control of the Senate in the next election,” Branstad said. He's recruiting candidates, “because that's going to make it easier to get what we want accomplished.”

Still, he said, having GOP control of the Legislature doesn't guarantee passage of his plans.

“You've got to sell your ideas, regardless of who controls Legislature,” he said.

The budget

“What they did in the past was throw things together, use one-time money and purposely underfunded things like indigent defense just to get by and fool the public as to the real level of funding,” Branstad said. “Well, we're not duct-taping anything together. What we're doing is restoring honesty and integrity in the budget process.”

One reason the Legislature is having a hard time agreeing on a budget, Branstad said, is that Senate Democrats have controlled things for the better part of 10 years “and had it their way.”

“Well, it's a new day. There's a new governor and a House of Representatives that has a much more conservative philosophy. The House has taken a strong position not to spend more than $6 billion, and they are dead serious about it,” he said. “We've told Senate Democrats that within those limits there is some room to do some negotiations and work out some priorities.”

Realigning the budget will likely entail pain in the near-term, he said. That's evident in the breakdown in negotiations between his office, House Republicans and Senate Democrats last week.

“But we will be positioned very well for the future” if Iowa adopts his lean budget, Branstad said. “I'm very willing to do what we've got to do now to position ourselves for the growth and opportunity I see down the road.”

Biofuels

Despite talk that subsidies for corn-based ethanol will be phased out, Branstad believes one of the most promising opportunities for Iowa is in the biosciences. He sees great promise for Iowa's biofuels industry.

He signed a bill that had bipartisan support to offer a tax credit for biofuels production and boost tax credits offered to retailers who meet renewable-fuels standards set in 2006. It also provides a tax credit for the sale of 15 percent ethanol-blended fuels, which are expected to replace E10; increases the credit for selling E85; and creates a new credit for the sale of B5 biodiesel.

“We want to keep Iowa at the forefront of renewable energy,” he said. “We've got to adjust … to look at blender pumps, to go to E15 as soon as we can. We're about maxed out on E10.”

Education reform

Branstad admits he didn't accomplish all he wanted to get done in his four terms from 1983-99.

“But lo and behold, I may get another shot at it,” he said.

Interest in the education summit is running high. Originally, Branstad expected 1,300 participants, but now he's expecting more than 1,600 people to attend.

He's also encouraged by support for education reform from groups like the Gates Foundation and other national education and business groups that are “stepping up to provide real resources to encourage and support education reform.”

“That wasn't available when I was trying to get things done in the 1980s and '90s,” Branstad said.

Agriculture

“That's a beautiful scene,” he said from the back seat as his SUV rounded a curve in Clayton County and a green valley of trees, grass and farm fields opens before him. “It's fun to be in northeast Iowa.”

Scanning the countryside, Branstad, who grew up on a north-central Iowa farm, comments on farmers cutting first crop hay and how much planting is yet to be done.

The strength of Iowa's farm economy is a source of optimism for Branstad. That's quite a turnaround from the farm crisis years when he was governor in the 1980s. Then agriculture was the weakest part of the economy, and the state struggled. Now, Branstad said, Iowa's economy is struggling, but agriculture is strong and helping the state come out of the recession.

“We know the economy nationally is coming back very slow, but we think Iowa, because of agriculture being such an important component of it, is actually going to do better than many states,” he said.

For example, Branstad, who recently met with a Brazilian ambassador, said exports from Iowa to the South American nation have increased from $95 million in 2006 to $353 million.

“Even though they are an ethanol producer, they are importing ethanol from here,” Branstad said. Pharmaceuticals are Iowa's leading export to Brazil.

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