Republican Governor Terry Branstad and Democrats in the Iowa Senate have different accounts of their private negotiations over a taxing and spending package that provided crucial spending for state programs that have been operating in the red.
Late last week Branstad used his item veto authority to reject two tax breaks that had been included in the compromise package — one aimed at businesses, the other aimed at Iowans who earn less than $45,000 a year. Branstad says he made it clear in private meetings with Democrats that those were unacceptable to him.
“There was no deal,” Branstad told reporters this morning. “…We gave them no indications that these tax changes that they had in that bill were acceptable.”
Democrats like Senator Joe Bolkcom say they’ll find it hard to trust Branstad to negotiate in “good faith” on other issues.
“I think there’s been a bit of trust broken here,” Bolkcom said during an interview in the statehouse press room.
Branstad said he wants to pursue “comprehensive” tax reform that will spur job creation, namely his proposal to cut the corporate income tax and reduce commercial property taxes. And Branstad said increasing the earned income tax credit for low-income Iowans — as Democrats had proposed — won’t help create jobs.
“It’s actually people that aren’t paying any taxes that are getting a credit back,” Branstad said. “It isn’t necessarily something that’s going to create jobs. It will provide some income for people. I would be much more focused on trying to create more and better jobs so that people can move up the economic ladder.”
Bolkcom, a Democrat from Iowa City who leads the Senate Ways and Means Committee, has a different opinion.
“That couldn’t be further from the truth,” Bolkcom told reporters. “Every dollar that goes into the hands of families making $45,000 or less gets spent in this economy on goods and services, employing people to provide those goods and services, and so I think it’s actually a really, really good investment in keeping people working in this state.”
Branstad said Bolkcom and other Democrats in the senate need to start compromising with a new governor and Republicans who now control of the debate agenda in the Iowa House. Bolkcom called Branstad “disingenuous” and “ridiculous” when it comes to tax policy. Bolkcom said if Branstad wanted to wait for a “comprehensive” tax proposal, then he shouldn’t have signed another bill a couple of weeks ago that provides tax relief for “the wealthiest Iowans.”
Listen to Branstad’s weekly news conference: BranstadApr25 (mp3 runs 19 minutes)