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Iowa regent school projects will proceed despite vetoes, Branstad says

Governor vetoes 'shell game' funding shift for various projects

Governor Terry Branstad talks to the media at the Duane Arnold Energy Center in Palo, Iowa on Wednesday, May 14, 2014. (
Governor Terry Branstad talks to the media at the Duane Arnold Energy Center in Palo, Iowa on Wednesday, May 14, 2014. (Adam Wesley/The Gazette-KCRG TV9)

Gov. Terry Branstad said Saturday that building projects in the planning stages or already underway at Iowa’s three public universities will proceed in the wake of item-veto action he took to reshape some of the fiscal 2015 budget plan passed by the split-control Legislature a month ago.

The five-term GOP governor said legislative budget-makers engaged in “kind of a shell game” by moving about $28 million worth of projects at the University of Iowa, Iowa State University and the University of Northern Iowa into the current fiscal year and funding them with one-time surplus money. The maneuver made more financial breathing room in crafting a state budget topping $6.9 billion within spending and revenue targets for the new fiscal year beginning July 1.

The money was part of a $140 million budget bill that proposed to save the state about $15 million by paying off $60 million in Vision Iowa Program bonds. The measure, Senate File 2363, also earmarked nearly $79.8 million in one-time funding for a host of projects, including $18.6 million to finish the ISU bioscience building, $8 million to finish the UI dental science building and nearly $2 million for UNI’s Bartlett Hall project.

While vetoing the funding shift to the current budget year, Branstad said he also used his item-veto power to remove language the Legislature included that “deappropriated” the same amounts that were authorized previously for the projects, which had the effect of maintaining the state commitments to the projects without shifting the costs to one-time money that would draw down the state’s surplus.

“I support those projects. They should be able to go forward,” the governor said in an interview.

However, he said, he has concerns about the long-term sustainability of state finances given that state tax collections have slowed while he and the Legislature last year made multiyear commitments to provide property tax relief and phase in education reforms that require considerable state resources to “backfill” lost tax revenue to local governments and fund new initiatives to benefit teachers and students.

“The problem is revenue has dropped off just since the Legislature adjourned by over $100 million, and I think we’ve got to be careful about the level of spending,” he said.

Branstad also used his item-veto authority to cut $2 million in planning money for new planned buildings at each of the three state universities that were included in an infrastructure funding bill as part of an effort to reduce proposed fiscal 2015 spending by $41 million. However, he kept intact the $64 million that will be needed over time to complete the projects and expressed confidence the universities would be able to find resources internally to keep the planning on track.

Bruce Rastetter, president of the state Board of Regents, issued a statement Saturday thanking the governor and legislators for the state’s financial commitment to the state’s three public universities and two special schools in the coming fiscal year.

“We are very pleased that the governor’s action solidifies a tuition freeze for a second straight year for resident, undergraduate students at Iowa’s public universities, while also maintaining commitments to ongoing capital projects,” Rastetter said.

Included in the governor’s veto actions were a $9 million reduction in the $25 million that lawmakers appropriated to the Resource Enhancement and Protection, or REAP, program in fiscal 2015, the removal of a $2 million supplement for the Low-Income Heating Assistance Program (LiHEAP), and a $11.2 million cut in proposed water quality and conservation programs. Branstad noted the REAP funding level will be $2 million higher next year than the $14 million it received in the current program year.

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