In what may be his final major speech at the Iowa Capitol, Gov. Terry Branstad last week delivered his Condition of the State address as the 2017 session of the Iowa Legislature got underway. In a speech titled “Smaller and smarter government,” the governor said it’s going to be a tight budget year after a revenue shortfall. The Legislature is planning on making some tough decisions that will mean millions of dollars in cutbacks for several state agencies.

Iowa’s six-term Republican governor, who has been nominated to be ambassador to China, said “Although we have faced a headwind out of Washington, D.C., that is stifling our agricultural economy, we still have positive state revenue growth. But we must proceed with caution and not repeat the mistakes of the past.”

Economic diversification
He called on rural Iowa communities to take their futures into their own hands, working for economic diversification and using entrepreneurship for revival. He also said education and job training are the foundation for Iowa’s future economic growth. He proposed 2% increases in state school aid funding for each of the next two fiscal years.

Branstad also proposes reforming the state employee benefits system to make it more efficient and less costly, finalizing state education funding early and focusing on computer sciences in schools, spending more money to improve the state’s water quality, changing state laws to eliminate distracted driving and defunding Planned Parenthood.

Branstad, who turned 70 in November and is the longest-serving governor in the nation’s history at 22 years, reflected on his time in office after he returned to the Iowa Capitol in January 2011. Over the period Iowa has seen its unemployment rate drop 6.2% to 3.8%. The state has helped to attract more than $13.5 billion in private-sector capital investment, which has created jobs across Iowa.

Governor wants Legislature to cut spending
Republican legislative leaders praised Branstad’s speech and promised the House and Senate GOP majorities will work with the governor to adopt a conservative agenda. But minority Democrat lawmakers criticized the governor and lamented budget troubles that have developed.

Senate Democrat leader Robert Hogg, D-Cedar Rapids, said his caucus will work with Branstad to address traffic safety issues and the need for water quality projects. But he is troubled by the governor’s plans to reduce the state’s budget by about $110 million. “Gov. Branstad says we have smaller government and a growing economy, so why do we have this hole in this year’s budget?” Hogg asked. “Iowans should be very concerned about what this budget cut could do to our public safety system, and our universities and community colleges.”

Iowa committed to improving water quality
Iowa Secretary of Agriculture Bill Northey issued the following statement following Iowa Gov. Terry Branstad delivering the Condition of the State address:

“Gov. Branstad has been a leader in identifying and providing an ongoing and growing revenue source to support the Iowa Water Quality Initiative. His proposal to provide $17.6 million in fiscal year 2018 and $25.1 million in fiscal year 2019 without raising taxes would allow us to continue to scale up our water quality efforts both efficiently and effectively. This proposal again shows water quality is truly a top priority, and Iowa remains committed to taking on the challenge of improving water quality.

“The governor also outlined the proposed de-appropriation for the current fiscal year. I understand the importance of the state living within its means and not spending more than we take in. We are still evaluating how it will impact our department, but we remain committed to managing our budget as efficiently as possible and minimizing the impact to the taxpayer.

“Finally, I do want to again thank Gov. Branstad for his strong leadership over the past six years. Our state’s future remains incredibly bright thanks to the tough decisions and strong leadership he has provided. I look forward to continuing to work with him, Lt. Gov. Reynolds and legislators throughout the session.”

Funding for renewable fuels infrastructure
Also in the governor’s proposed budget for fiscal year 2018, which begins July 1, 2017, is funding for continuation of the state’s renewable fuels infrastructure cost-share program. In response, Monte Shaw, executive director of the Iowa Renewable Fuels Association, issued the following statement:

“Today, Gov. Branstad followed up on the recommendation of the recently released Iowa Energy Plan by prioritizing funding for the Renewable Fuels Infrastructure Program. This cost-share program has leveraged millions of dollars of private investment for equipment to provide consumers the option of higher ethanol and biodiesel blends. The demand for this program remains strong and the $3 million in proposed funding is dearly needed. RFIP will not only give consumers more options at the pump, but will also drive demand for Iowa’s homegrown renewable fuels and ag commodities. Boosting Iowa’s rural economy is vital to boosting Iowa’s overall economy.”