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.
blog comments powered by Disqus