Reaction to Branstad's 2014 Condition of the State address

Immediately following Governor Terry Branstad’s Condition of the State address to Iowa legislators yesterday, Senate Majority Leader Mike Gronstal told Iowa Public Television that he “didn’t hear anything I disagreed with.” Not every Iowan who closely follows state government shared his reaction. State Senator Jack Hatch, the leading Democratic challenger to Branstad, slammed the governor’s “very shallow agenda” of “low expectations.”

After the jump I’ve posted more detailed comments from Hatch and a few other Iowa Democrats, as well as statements released by several non-profit organizations, which called attention to important problems Branstad ignored or glossed over.  

Branstad shied away from major policy initiatives yesterday, proposing a few small-scale efforts likely to be embraced by Democratic legislators as well as Republicans. Senator Hatch’s assessment was harsh:

DES MOINES — Sen. Jack Hatch, Democratic candidate for Governor, released the following statement following the Governor’s Condition of the State address on Tuesday:

“This is the same speech Iowans have heard before, dating back to the early 1980s.  Expectations are pretty low for Governor Branstad.  His agenda for Iowa is a timid, lukewarm retread of the past.  It’s too bad, really, that this Governor is focused more on his record for longevity than on Iowa’s future.

The speech was flat and uninspired.  The total lack of vision was disappointing but not surprising.  The Governor said nothing about mental health, low wages, clean water, roads and bridges or cutting health care costs.  

It’s time for Iowa to move past Terry Branstad. It’s time for a change.  It’s past time for new leadership, with effective ideas and a fresh approach.      

In my travels, I am hearing Iowans want to move forward with ideas that work.  What the Governor missed in his speech today was addressing ideas with which government can partner with the private sector to create real opportunity.”

Appearing on Simon Conway’s WHO Radio program yesterday afternoon, Hatch repeatedly contrasted the governor’s “very shallow agenda” and “low expectations” with the “major policy agenda” he is proposing to deal with Iowa’s infrastructure needs, college debt, and the burden on middle-class taxpayers. Hatch added that when he is governor, “I’ll be asking Iowans to challenge ourselves, to think beyond the next election.” He said Iowa could afford to invest in key services if we had better priorities–for instance, not giving $110 million in tax breaks to a corporation that was going to build in Iowa anyway, for a facility that would create only 165 permanent jobs.

Iowa Democratic Party Chair Scott Brennan focused on what was missing from Branstad’s speech:

Des Moines – Iowa Democratic Party Chair Scott Brennan released the following statement today on Governor Branstad’s Condition of the State:

“Today, we heard another example from Terry Branstad on why he should no longer be Iowa’s governor, and that under his leadership, Iowa is simply not working.  From putting corporations and the wealthy ahead of Iowa’s middle class, to fudging jobs numbers, to restricting women from making their own health decisions, and turning his back on increasing the minimum wage, it’s clear that Terry Branstad is letting Iowa fall behind the rest of the country.  The too small gains and even bigger losses bitterly disappoint Iowans, and the Governor would rather ignore reality than admit that the classic GOP top-down approach simply is not working.  If Terry Branstad wants to continue with the failed policies of the past that hurt Iowans, then he should reconsider another four years in Terrace Hill.”

Although the governor did not talk about mental health yesterday, he did make a gesture toward recognizing Iowa’s funding needs in this area. Democratic State Senator Rob Hogg hailed a “significant victory to start the legislative session,” as the governor’s draft budget includes “nearly $30 million to counties to help them adjust to a new regional mental-health system.” Hogg spent the last several weeks encouraging Iowans to contact the governor after the Iowa Department of Human Services did not include those funds in its budget request.

The Iowa Fiscal Partnership, a collaboration between the non-partisan Iowa Policy Project and Child & Family Policy Center, called attention to some warning signs on the state budget:

Iowans cannot afford new raids on the General Fund when many public services have not been restored to pre-recession levels.

IOWA CITY, Iowa (Jan. 14, 2014) – The Iowa Fiscal Partnership released the following statement today about Governor Branstad’s Condition of the State address in Des Moines:

Two high points stand out from Governor Branstad’s address today.

First, the Governor does not appear to be supporting new initiatives for general reductions in Iowa corporate or individual income taxes. These taxes already are low and quite competitive in the nation and region, as Iowa Fiscal Partnership analysis has demonstrated. Iowans cannot afford new raids on the General Fund when many public services have not been restored to pre-recession levels.

Second is a commitment to higher education, with the second year of a tuition freeze that will help undergraduate students at the state’s Regents universities. The Governor is right in targeting student debt as a challenge to an Iowa Dream of opportunity and prosperity.

The Governor did not close the door on – but also did not address – several other issues important to moderate- and middle-income Iowans.

Among those: improving the minimum wage, now starting a seventh year at $7.25; combating wage theft; boosting child-care assistance to make it easier for low-wage workers to take a job or seek new education or training. These issues have existed since before the Governor took office, and such moves to improve economic prospects for families and reduce poverty, would be a good followup to arguably the most important legislation he signed last year: doubling the Earned Income Tax Credit.

Despite recently strong revenues, Iowa faces critical fiscal challenges now and in the coming years due in part to the bipartisan property-tax cuts passed last year. While the Governor characterized this as “relief” for “middle-class families,” it is important to note that the property-tax package was almost exclusively geared to business – including large retailers that did not need the breaks. As IFP has noted,[1] these breaks and others pose many challenges for critical public services in the years to come.

The Iowa Fiscal Partnership is a joint public policy analysis initiative of two nonpartisan, nonprofit Iowa organizations, IPP in Iowa City and the Child & Family Policy Center in Des Moines. Reports are available at www.iowafiscal.org.

[1] “Iowa Budget Dilemma for 2014,” Iowa Fiscal Partnership, Jan. 13, 2014. http://www.iowafiscal.org/iowa…

Branstad’s failure to acknowledge any water pollution problems in Iowa drew this comment from Citizens for a Healthy Iowa:

Governor Branstad Ignores Water Quality In Condition of the State Address

Des Moines, Iowa — In his condition of the state address this morning, Governor Terry Branstad failed to mention the quality of Iowa’s drinking water. In response, Citizens for a Healthy Iowa President Mike Delaney issued the following statement:

“Our drinking water is at risk because of 600 polluted rivers, lakes and streams. It was absurd for the Governor to ignore an issue that impacts the health of every family in Iowa. Runoff from our farms puts every glass of drinking water at risk, and it’s past time for Governor Branstad and the state to do something about it.”

Citizens for a Healthy Iowa will begin a multi-spot television and radio advertising campaign tonight to highlight the need for improved water quality standards. The first ad in the campaign, ‘Drinking Water Roulette’, can be viewed here: http://youtu.be/qYFgKtzzmig.

Citizens for a Healthy Iowa is an Iowa based non-profit organization that advocates in support of sustainable environmental health, public health and economic health policy. To learn more visit www.citizensforahealthyiowa.org.

Statement from Iowa CCI Action:

BRANSTAD’S BUDGET SHORTFALL RAISES RED FLAGS

HOME  IN THE NEWS

Iowa’s Revenue Growth Eaten Up By Branstad’s Corporate Property Tax Cuts & Other Handouts

An Iowa Policy Project analysis of the state’s budget outlook finds baseline expenses will exceed revenues, forcing the state to dip into surplus funds even before new spending is debated, which may be unsustainable long-term given the growing cost of corporate property tax cuts phase-in

Iowa’s economic and revenue growth has been stolen by a corporate property tax cut deal and other handouts and giveaways signed into law last year by Governor Terry Branstad, forcing the state to dip into surplus funds to cover expenses, and that’s before badly needed new appropriations in education, environmental protections, and infrastructure are considered, according to a comprehensive new budget analysis by the Iowa Policy Project released on January 13 and interpreted by Iowa Citizens for Community Improvement Action Fund (Iowa CCI Action Fund) members.

The findings raise serious questions about Iowa’s long-term budget outlook, cast doubt on Governor Branstad’s claim to be a responsible manager of state government, and add momentum to demands made by CCI Action Fund members and others that Iowa must raise new revenue from the very wealthy and big corporations in order to fully fund the vital public services that everyday people and hardworking families depend on.

“The state of Iowa simply cannot afford to pay the cost of these corporate property tax cuts over the long-term if we also want to continue to invest in critical public services,” said CCI Action Fund member Ross Grooters from Pleasant Hill.  “We need to raise new revenue by making the very wealthy and big corporations pay their fair share of taxes.”

The Iowa Policy Project, a nonpartisan, independent think-tank, published a two-page budget guide Monday titled Iowa Budget Dilemma 2014.  The Iowa Policy Project budget analysis shows:

$6,983.2 million in net revenue FY15

– $7,072.0 million in net expenses FY15 (not counting potential new appropriations)

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($88.8 million) shortfall FY15

$710.9 million FY14 surplus after rainy day funds are full

– $88.8 million shortfall

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$622 million FY15 surplus

The corporate property tax cuts signed into law last year will cost the state approximately $135.9 million this year, more than $275 million next year, and will continue to grow beyond $380 million annually, raising serious long-term concerns about Iowa’s budget that the state’s surplus and rainy day fund may be incapable of absorbing over time.

The rhetorically misnamed Taxpayer Trust Fund is another major drain on state revenues, and is capped at $120 million.

“This is very alarming because the state can’t spend surplus funds forever,” Grooters continued.  “At this rate we could be out of money in just a few years.”

The Iowa Policy Project’s new budget estimate does not include the possibility of another tuition freeze at Iowa’s state universities this year, estimated at a $44.2 million increase over baseline appropriations, nor does it include the possibility of increased funding at badly understaffed departments such as the Department of Natural Resources, Workforce Development, and other agencies and departments.

Branstad’s corporate property tax cuts will also cost local and county governments an estimated $741 million over ten years even after the state backfill is fully funded.

Iowa CCI Action Fund members say this view of Iowa’s budget outlook raises serious alarm bells and shows that Governor Branstad has mismanaged the state’s budget in the service of a corporate agenda that is hindering the ability of state government to fully fund vital public services.

CCI Action Fund members warn Governor Branstad and state policymakers that spending cuts to make up any potential shortfalls will not be acceptable and that new revenue must be raised in order to fully fund vital public services.

Branstad has already laid the groundwork to propose $30 million in cuts to county mental health services in the budget he will propose Tuesday during his Condition of the State address, and he may propose other spending cuts.  Branstad’s departments have proposed an overall budget that is actually $27.2 million less than last year’s.  On December 8, Branstad told a group of reporters gathered at an Associated Press media conference that no “major” spending cuts would be needed in order to keep the budget balanced five years out, an apparent admission that some cuts may be necessary if new revenue isn’t raised outside of expected economic growth.

“Governor Branstad is funneling Iowa’s economic growth to out-of-state corporations rather than reinvesting in the public services that benefit everyday people and hardworking families,” Grooters continued.

“This is money generated by the productivity of Iowa workers and the income taxes paid by Iowa families, and it should be used to benefit the common good – to fix our roads, clean up our environment, and improve the public safety – it should not be used to pad the corporate profits of out-of-state companies.”

CCI Action Fund members released in December a “People First Iowa” blueprint for the state that includes tax policies to force factory farms and other out-of-state corporations to begin paying their fair share of taxes – and suggests the new revenue could be used to fully fund public services.  The “People First Iowa” initiative includes:

• Raising the minimum wage – more personal income means a larger tax base, and more money in workers’ back pockets means more demand, which creates more spending;

• Combined corporate reporting – to close a loophole in Iowa tax code that allows out-of-state corporations like WalMart and McDonalds to avoid paying income taxes on sales generated in Iowa;

• Ending the Research and Development Tax Credit, which gives out-of-state corporations like John Deere and Rockwell Collins a tax credit so large that they end up receiving a rebate check from state government rather than actually paying any taxes themselves;

• Closing three tax loopholes that factory farm polluters get on their manure pits, animal feed, and electricity.  The pollution control tax exemption is a revenue drain on county government that, if ended, could produce new revenue to fix county roads damaged by factory farm trucks, while the state tax credits for animal feed and confinement electricity could be better spent on finding new initiatives to help young farmers, women farmers, and immigrant farmers get affordable access to land and diversified markets.

• Passing a Corporate Tax Transparency Act that would require publicly traded companies doing business in Iowa to publicly post the state taxes they pay, or don’t pay, so that everyone knows.

“Spending cuts and more tax cuts for the very rich and big corporations are off the table.  We can’t afford that anymore.  We have to raise new revenue so we can expand vital public services,” Grooters concluded.

Iowa CCI Action Fund is a grassroots, statewide people’s action group that believes community and political organizing is the most effective way to build a more just and democratic society that puts communities before corporations and people before profits, politics, and polluters.

Meanwhile, Progress Iowa called attention to Branstad’s misleading use of jobs numbers (see also here):

Governor Branstad Continues Jobs Deception In Condition of the State Address

Branstad claims 130,000 jobs have been created, but that number does not include jobs lost; 67% of Iowans believe his claim is dishonest

Des Moines, Iowa — In his Condition of the State address this morning, Governor Branstad repeated his false claim that more than 130,000 jobs have been created since he took office. According to figures from the Bureau of Labor Statistics, job growth has been significantly lower than the Governor claims.  

In response to the Governor’s continued deception and use of false statistics, Progress Iowa Executive Director Matt Sinovic issued the following statement:

“Governor Branstad continues to use fuzzy math to deceive Iowans and inflate job growth. Any discussion about improving Iowa’s economy must include an honest assessment of our current condition. Middle class families struggling on income that has flatlined deserve better than more lies and dishonesty from their Governor. Unfortunately, the Governor seems incapable of honesty on this issue.”

In a survey conducted by Public Policy Polling just two weeks ago, 67% of Iowans responded that Governor Branstad’s method of counting only jobs gained, without counting jobs lost, is dishonest.

Statistics recognized by the Bureau of Labor Statistics show that from January 2011 until November 2013, ‘total nonfarm employment’ grew by a net 54,000 jobs in Iowa. And according to the US Census Bureau, median family income grew by just 0.2%. Governor Branstad has promised to create 200,000 jobs and grow family income by 25%, promises he has failed to keep.

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Background:

Iowa Workforce Development: Total nonfarm employment grew by just 54,000 jobs between January 2011 and November 2013

http://www.iowaworkforce.org/l…

Associated Press: Governor Branstad was forced to downgrade his disputed job claims

http://www.businessweek.com/ap…

Public Policy Polling: 67% of Iowans believe his method of counting ‘gross jobs’ is dishonest

http://www.scribd.com/doc/1978…

US Census Data: Median family income has risen by $111 dollars since 2010, an increase of just 0.2%

http://factfinder2.census.gov/…

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