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Legislative Session Finally Wraps Up

Legislative Session Finally Wraps Up

Governor Terry Branstad comments on close of 2011 Iowa Legislative session. Budget disagreement was main sticking point that kept lawmakers in Des Moines much longer than usual.

Iowa Gov. Terry Branstad on June 30 issued the following statement regarding adjournment of the longer than anticipated 2011 session of the Iowa Legislature.

First, I want to congratulate the members of the General Assembly for completing their work and making the extraordinary efforts to complete the state budget prior to the end of the fiscal year and for fulfilling their constitutional duty.

Second, I want to thank Speaker Paulsen, House Majority Leader Upmeyer, Senate Majority Leader Gronstal, Senate Minority Leader McKinley, and House Minority Leader McCarthy for working with my administration to enact important and beneficial legislation on behalf of Iowans.

At the beginning of the 2011 Session the state of Iowa faced a critical budget crisis resulting from years of bad budgeting practices. Tricks, gimmicks, and sleights of hand could no longer disguise the state's dire financial condition. My administration identified nearly $900 million of state spending on 89 different programs that were funded with sources that ended today and this left us facing a huge budget gap and nothing but difficult choices ahead.

Priority for this session was to bring state budget under control

Job number one was bringing the state budget under control, solving the fiscal crisis, and restoring predictability and stability to the state budget so those receiving state services could count on their uninterrupted delivery. I am proud of the work we accomplished this session in regards to the state budget.

  • The FY 12 budget spends less than it takes in and state spending was held to about 96% of available revenue. That's a significant accomplishment after years of spending every penny the state received and then some.
  • For the first time since the early 1980s the state has a biennial budget with 85% of funding for FY13 already set and key areas such as school aid and entitlement programs fully funded in the second year.
  • No entitlements have been purposely under funded in FY 12.
  • In both FY 12 and FY 13 the state fully funds its commitment to school districts, providing an additional $156 million in FY 12 to provide property tax relief and an additional 2% allowable growth for schools in FY 13.
  • Significant progress was made to ensure ongoing state programs are paid for from ongoing state revenue sources.
  • This budget balances for FY 12, FY 13, and is projected to balance over the entire five years of our long range plan.

Iowans asked us to fix this fiscal mess and we made historic progress toward that goal this year and we will continue that work as we move forward.

Partnership to replace Iowa Department of Economic Development

I am also pleased with the work accomplished to create the Iowa Partnership for Economic Progress, our new public-private partnership created to replace the current Iowa Department of Economic Development that will be the catalyst for our efforts to create new jobs and raise family incomes.

IPEP will harness the best of the public and private sector and form those critical partnerships to promote, market, and sell our state to job creators both already operating in Iowa and those we seek to bring within our boarders.

However, I am most disappointed that our new economic development team will be denied, at least temporarily, the critical tool of lower commercial and industrial property taxes. The inability of Senate Democrats to address commercial property taxes in a way that aids our economic development efforts means Iowa will continue to have the 2nd highest commercial property taxes in the nation and this will certainly make the work of our job creators that much more difficult.

Residential tax payers will see big increases in property taxes

In addition, the lack of action by Senate Democrats on property taxes will mean residential taxpayers in this state will see historic increases in their property taxes over the next five years as record prices for commodities will trigger a roll up in residential property taxes. Our proposed legislation would have significantly reduced commercial and industrial property taxes to encourage job creation and would have protected home owners from huge tax increases.

However, I will not let this issue be pushed aside and will take steps to bring it to the Legislature's attention in the future. Property tax relief for all classes of property is too important to be left on the roadside and I will continue to champion this cause until this 30-year logjam is finally broken.

Iowans have much for which to be proud regarding the work of the General Assembly in 2011. While it may have taken extra time, the time was well spent as we have taken great strides in both restoring the fiscal foundation of our state and beginning the process for meaningful job creation in these troubling economic times. That being said, we have significant additional work left undone and exciting new work to do in the coming year and I am anxious to move forward over the coming months to get that work started.

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