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January 31st, 2011

Déjà Vu: Branstad Once Again Leads With Tax Increase

Somewhere, former Iowa House Speaker and gubernatorial candidate, Chris Rants, is saying, I told you so.  Before exiting the Republican gubernatorial primary in February of last year, Rants had been Terry Branstad’s loudest critic.  He often reminded people that the first thing Branstad did when elected governor in 1983 was to raise taxes.

In December of 2009, Rants sounded the warning when Branstad told a group of road builders in Decorah that he would raise the gas tax.  When pressed about the gas tax, Branstad said that he wouldn’t support it.  In fact, he stated that, if the inefficiencies of the Department of Transportation were eliminated, those savings could be used for road and bridge maintenance.

Rants’ warning now seem prophetic since Branstad’s proposed budge contains a $200 million tax increase on casinos, and the Governor has told a group of community leaders that he is now open to an increase in the gas tax next year.

The response to Branstad’s budget has been mixed.  Republican legislators seem opposed to the tax hike on casinos and are disappointed that the governor funded $25 million towards the Iowa Values Fund, which the Iowa House had already voted to eliminate.

Some have also voiced disappointment in the size of Branstad’s budget.  Branstad’s $6.16 billion budget is smaller than Culver’s last budget by about $200 million.  On the campaign trail, Branstad stated that he wanted to cut the size of government by 15 percent.  Branstad’s budget would be about 15 percent smaller than Culver’s if he played the same games that Culver did.  Culver funded 89 different programs with one-time federal money that Branstad must now pay (or cut) from the general fund.

The good news is that Branstad isn’t playing any games with his budget, and neither are House Republicans.  With the House and Governor’s office agreeing on the budget numbers, things are off to a good start.  In his press conference last Thursday, Speaker Kraig Paulsen called Branstad’s budget a ceiling, not the floor, which seems to indicate that House Republicans are not simply going to accept Branstad’s proposal and pass it.

The one proposal on which Branstad campaigned and which he obviously wants to see enacted as soon as possible is the revamping of the corporate income tax.  Branstad’s plan would institute a six percent flax tax, but it would also keep federal deductibility, which would make Iowa more competitive than five of its six neighbors.

If Branstad wants to see his corporate tax plan become a reality, members of his team may want to find $200 million that they can cut out of the budget since his proposed tax increase on casinos may not go anywhere.

By including a huge tax increase in his initial budget, a lot of people are probably joining Rants by saying, “I told you so.”  That’s not what I would have led with, but we shouldn’t let a tax increase that may not get enough legislative support to go anywhere take away from a no-frills budget that actually helps get Iowa’s fiscal house in order.

As Branstad’s team has more time to understand the budget, hopefully they will find more areas and programs that the state can do without.  It’s also helpful that the Republican majority in the House will be a willing accomplice in finding areas to cut as well.

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About the Author

Craig Robinson
Craig Robinson is the founder and editor-in-chief of TheIowaRepublican.com, a political news and commentary site he launched in March of 2009. Robinson’s political analysis is respected across party lines, which has allowed him to build a good rapport with journalist across the country. Robinson has also been featured on Iowa Public Television’s Iowa Press, ABC’s This Week, and other local television and radio programs. Campaign’s & Elections Magazine recognized Robinson as one of the top influencers of the 2012 Iowa Caucuses. A 2013 Politico article sited Robinson and TheIowaRepublican.com as the “premier example” of Republican operatives across the country starting up their own political news sites. His website has been repeatedly praised as the best political blog in Iowa by the Washington Post, and in January of 2015, Politico included him on the list of local reporters that matter in the early presidential states. Robinson got his first taste of Iowa politics in 1999 while serving as Steve Forbes’ southeast Iowa field coordinator where he was responsible for organizing 27 Iowa counties. In 2007, Robinson served as the Political Director of the Republican Party of Iowa where he was responsible for organizing the 2007 Iowa Straw Poll and the 2008 First-in-the-Nation Iowa Caucuses. Following the caucuses, he created his own political news and commentary site, TheIowaRepublcian.com. Robinson is also the President of Global Intermediate, a national mail and political communications firm with offices in West Des Moines, Iowa, and Washington, D.C. Robinson utilizes his fundraising and communications background to service Global’s growing client roster with digital and print marketing. Robinson is a native of Goose Lake, Iowa, and a 1999 graduate of St. Ambrose University in Davenport, where he earned degrees in history and political science. Robinson lives in Ankeny, Iowa, with his wife, Amanda, and son, Luke. He is an active member of the Lutheran Church of Hope.




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