DES MOINES — In what was likely his final Condition of the State speech Jan. 10, Gov. Terry Branstad’s proposed budget included over $100 million in cuts for the present fiscal year and a 3 percent budget increase for the fiscal year that starts July 1.
It also included support for state water quality efforts through a bill passed by Republicans in the Iowa House last year.
House File 2541, which would move funds around to provide more money for water quality efforts, was passed by the House in 2016 but went nowhere in a state senate that was controlled by Democrats.
Then came the election.
Now Republicans control the Iowa Senate, House and the governor’s office, and that 2016 Republican bill appears to be the most likely vehicle for water quality funding efforts.
Branstad said in his speech he believes “our discussions should begin with the House-passed bill from last session.”
That approach has drawn support from Republicans and cautious optimism from some Democrats. One voice of dissent comes from Sen. David Johnson, a Republican-turned-independent from Ocheyedan.
“It took 26 minutes of a 31 minute speech to get to water quality,” Johnson said.
The conservative, who left his party last year over its support of Donald Trump, said he didn’t see a way for Iowa to find the large pool of money necessary to fund water quality efforts without increasing revenue.
He is a strong proponent of a 1-cent increase in the state sales tax that would go toward a state fund to pay for items including water quality efforts. Voters already gave strong support for a 3/8 cent sales tax increase during a 2010 public referendum, Johnson said.
“It’s a shell game,” he said of other water quality efforts which depend on shifting money from other sources.
Still, as is often the case at the opening of a legislative session, most lawmakers were upbeat and supportive of the governor.
“I think he did a really nice job,” said Speaker of the House Linda Upmeyer, R-Clear Lake. “It was a poignant moment.”
“I appreciate his ideas and his commitment to smaller sustainable government,” said Senate President Jack Whitver, R-Ankeny.
House Minority Leader Mark Smith, D-Marshalltown, said there were no big surprises in the speech and he looked forward to working with the governor and Republican lawmakers on issues on which they agree, such as in finding funding for water quality efforts.
But first there will be some difficult choices.
Due to lower than projected tax revenues, Branstad is calling for a cut of about $110 million from the budget for fiscal 2017, which ends June 30.
He said he did not propose any cuts in K-12 education, but that means there are proposed cuts of about $25 million for the regents institutions, about $20 million for the Department of Human Services, about $15 million for prisons, about $8.7 million for community colleges, and smaller cuts for a variety of other items, including a cut of $952,837 for the Department of Agriculture and Land Stewardship.
Branstad’s proposed budget for fiscal 2018 (which starts July 1), includes a roughly 3 percent increase, to $7.457 billion and another 2.2 percent the following year, to $7.623 billion.
Those figures include extending the coupling of Iowa law to changes made last year in the federal tax code. State lawmakers last spring passed a one-year coupling item. Branstad would extend that.
However, lawmakers did not include coverage of a piece of federal tax law known as Section 179, involving the depreciation of equipment. Farm organizations have pushed for the state to couple that item with federal law. Branstad did not include that item in his budget proposal.
The governor did call for stricter penalties for texting while driving, a 2 percent annual increase in state education funding, a comprehensive review of all the state’s boards and commissions, and an expansion of computer science education.
If the water quality legislation passed by the House last year becomes law, it would also put about $8 million more money into water quality in fiscal 2018. That figure would rise a bit in 2019.
The Jan. 10 speech was also a farewell of sorts for Branstad, who served as governor from 1983-1999 and again since 2011. He has been named as President-elect Donald Trump’s choice to be ambassador to China.
The U.S. Senate will hold hearings on that nomination, and Branstad is considered certain to be approved. When that happens, he will step down and Lt. Gov. Kim Reynolds will become governor.
Since Reynolds has served with Branstad for more than a half-dozen years, no major changes in policy or direction are expected in the short-term due to the change. But the situation did make this speech different from past ones given by the Branstad — the longest-serving governor in United States history.