Ad-Express and Daily Iowegian, Centerville, IA

Local News

June 17, 2011

Room for improvement in Iowa's budget, economy, property taxes

CENTERVILLE — Iowa Gov. Terry Branstad Tuesday morning said the state needs to implement a responsible, sustainable two-year budget, reform and provide property tax relief and develop a marketing program with public and private partnerships to promote economic development.

"My focus is on jobs and revitalizing the Iowa economy," Branstad said at the Continental Hotel during his "Working Together For a Better Future Tour!" stop in Centerville. "In addition to that, we need to make Iowa more competitive to bring business and jobs here."

Branstad said both the federal and Iowa's state government have been spending more money then revenue coming in. The federal government the past two years has spent 40 percent more then they have taken in and increased the national debt by $1.6 trillion, he said.

"At the state level, unfortunately in recent years, they've used one-time money and spent more in state expenditures than we had in ongoing revenue coming in," Branstad said, noting the state spent $900 million in one-time revenue. "(My) budget provides $216 million in new state spending for K-12 education in fiscal year 2012 and a 2 percent increase in allowable growth for K-12 schools in fiscal year 2013, meaning $280 million in total new funding for K-12 education."

Branstad said when he was governor in the 1990s, he left the state in strong financial position and with record employment. Branstad said he wants a two-year budget, like they used to do prior to 1983, where the state doesn't spend more than it takes in.

"This means ending all of the budget gimmicks and using one-time money for ongoing expenses," Branstad said. "This means making sure that we line up expenditures with income. And that is what we're working on right now."

Branstad said the Culver administration "violated the law" when they spent more than 99 percent of revenue and did it for four years in a row.

The governor's effort to revitalize the state and make it more competitive means lowering property taxes and developing public and private partnerships.

"We've put together a comprehensive bill that not only takes care of the budget, but also reduces the commercial tax systematically over a five-year period," Branstad said, adding his plan would protect residential and agricultural taxpayers by reducing the cap on state valuation growth from 4 percent to 2 percent, which would prevent an $800 million potential property tax increase over the next five years. "My goal is to eventually get (commercial) from 100 percent to 60 percent."

As the amount of commercial property tax collected is reduced, the state will have for fiscal year 2014 $50 million available for local governments to replace the taxes. In fiscal year 2015, the state will have $100 million, fiscal year 2016 $150 million, fiscal year 2017 $200 million and in fiscal year 2018 $250 million.

"So then local governments are protected from the loss of revenue and we reduce the tax burden to make Iowa more competitive," Branstad said. "In addition to that, if we don't do anything, there's going to be a huge increase in residential and agricultural property."

Branstad said if the Legislature fails to enact property tax reform, the state is looking at a $1.3 billion increase in property taxes over the next three years.

"Also on the regulatory side, I've already signed an executive order requiring all new state regulations to have a job impact statement," Branstad said, adding all existing state regulations will be looked at to determine what impact they have had on jobs and economic growth in Iowa.

Branstad said a bill joining the state's economic development agency in a marketing program partnership with private businesses like Kevin, Monsanto, Pioneer and Rockwell Collins can help create 200,000 new jobs over the next five years and raise family incomes by an average of 25 percent. He said the bill has passed the House and is in the Senate.

"And we need to see the Senate approve that next week to get this done," he said, adding Indiana has been very successful with a similar type partnership.

And more than one question from the full house during the 60 minute meeting asked the governor about the Iowa Workforce Development office in Centerville. The concern was the state's desire to consolidate smaller offices in southeast Iowa in Ottumwa to be more efficient.

Branstad said due to the cost of bonus and benefit obligations owed to government employees retiring early during the Culver administration and Culver's acceptance of the first public employee collecting bargaining agreement, the state needs to find a way to deliver services more efficiently.

"Bargaining starts in November after the election. It's always been a tradition since we've had public employee collective bargaining that the outgoing governor turned that over to the incoming governor," Branstad said. "Governor Ray did that for me, I did it for Vilsack, Vilsack did it for Culver. Culver not only didn't do it, he took the union's first demand, which was a 15 percent increase for people not at the top of their pay rate for the next two years and agreed to it without any negotiation. We don't have the money to pay for that either. That's going to have to come out of those existing budgets."

Branstad said Workforce Development is working with libraries and community colleges to provide more electronic access to job markets without maintaining the same number of offices.

"I don't think it is ideal, but we do recognize the need to have access for people and get them the information they need on jobs that are available," Branstad said. "And I appreciate what Teresa Wahlert, the director is trying to do there in trying to find a more efficient way to deliver those services."

He did offer to ask the Iowa Workforce Development director meet with local officials to listen to their concerns.

After the Centerville stop ended at 10 a.m., the governor had stops planned in Albia, Ottumwa and Fairfield.

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