Governor Terry Branstad today said with lower-than-expected state tax revenue, the current state budget must be reduced by nearly $100 million.
“This year we’re going to have to do some ‘deappropriation’ in order to meet the fiscal challenge we’re facing,” Branstad said this morning. “We have a requirement that the budget be balanced.”
A state panel met last week and lowered the “official” estimate of state tax collections for the current budgeting year. Branstad hopes to shield a few major budget items from cuts.
“I’m going to work with the legislature and make recommendations,” Branstad near the end of his weekly news conference. “I want to protect K-12 school aid from reductions and property tax credits. I don’t want to see those reduced.”
With those spending areas off the cutting table, state agencies are likely targets for cuts.
“We just received the December Revenue Estimate last week and we are reviewing how the revenues align with our state budget,” Ben Hammes, a spokesman for Branstad, said in a statement released early Monday evening. “We will work with the legislature to make the tough decisions that Iowa businesses and families expect us to make to balance the budget.”
During the depths of the farm crisis when he was governor in the 1980s, Branstad ordered mandatory, unpaid furloughts for state workers, as well as an across-the-board cut in state government. When he ran for governor again in 2010, Branstad was a critic of then-Governor Chet Culver’s decision to cut the state budget across the board rather than make targeted cuts.
Today, Branstad again indicated strategic reductions are his goal for dealing with this latest budget dilemma. The governor and his staff are in the process of crafting a state budget plan for next year that will be submitted to legislators in January.
“We’re going to have to make some difficult decisions on the budget,” Branstad said.
Branstad has met publicly with state agency directors over the past few weeks to discuss budget priorities.
At some point next year, Branstad will resign as governor to become President-elect Trump’s ambassador to China, but Branstad intends to deliver the annual “Condition of the State” speech to legislators on January 10th and make a formal budget recommendation as well. Branstad’s not commenting on the latest diplomatic skirmish between China and the U.S. — about that drone the Chinese military seized and will now return.
“First of all, I have not been confirmed yet and I’ve been advised it’s not wise for me to comment on foreign policy at this point in time,” Branstad said. “So I’m focusing on my responsibility as governor.”
(This post was updated at 8:34 am Tuesday with additional information.)