DES MOINES, Iowa (AP) - Outgoing Iowa Gov. Terry Branstad said Wednesday that he doesn’t think tax cuts are feasible during the upcoming session, a position that seems to put him at odds with fellow Republicans who will control both chambers of the Legislature.
Branstad told reporters at the annual Associated Press legislative seminar that although he generally supports tax reform, immediate cuts aren’t sustainable amid the state’s financial climate. The current $7.3 billion state budget has a shortfall of about $100 million. Projections for the next budget year don’t include a surplus.
Branstad’s remarks come as the longest-serving governor in U.S. history prepares to resign to become the next U.S. ambassador to China under the pending Donald Trump presidency. Lt. Gov. Kim Reynolds, who will become governor, was unable to attend the seminar due to an illness.
Ben Hammes, a spokeswoman for the governor’s office, said Reynolds agrees with Branstad on his decision not to recommend an imminent tax cut because of the “tough budget situation the state is in.”
Branstad noted the current shortfall will require immediate cuts in state spending, and agencies may be forced to lay off employees. He added it would be up to the departments to make those decisions.
“I think we have to be cognizant of the financial circumstances the state is facing,” he said. “As I said, I’m open to and willing to look at different options and alternatives. We’ve done some examination of different things that could be done, but at this point I don’t have a recommendation in my program in terms of changing the tax structure.”
Branstad also declined to comment on whether he would sign into law a tax reform package if it made its way through the GOP-controlled House and Senate. Republicans in both chambers have been vocal about their support for changing Iowa’s tax rules. Both House Speaker Linda Upmeyer, R-Clear Lake, and Senate Majority Leader-elect Bill Dix, R-Shell Rock, declined to release specific details, but they have expressed interest in reducing taxes.
Republicans will be in control of both chambers and the governor’s office for the first time in 20 years, a dynamic that may bring in sweeping conservative changes to Iowa on issues regarding abortion, guns and voting. Republicans repeatedly declined at the seminar to specify what they would do, though Dix said voters wanted change by putting them in charge.
“I’ve used the phrase, we need to kick the door in on government and how we’ve done business,” he said.
It’s unclear when Branstad will take on his diplomatic post, but he highlighted a priority to sign legislation before he leaves that would cut language in Iowa’s collective bargaining law that allows public workers to bargain for health insurance. Branstad said such a move would provide more spending flexibility to local governments and school districts.
Democrats, now in the minority and with little legislative power, signaled alarm at such a move from Republicans. Senate Minority Leader-elect Rob Hogg, D-Cedar Rapids, said the state’s collective bargaining law has served the state well over 40 years, and there are more pressing issues regarding income inequality, education and health services.
“We can focus on the real problems rather than problems that in my view have been manufactured for electoral purposes,” he said.
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