DES MOINES — Gov. Terry Branstad offered a budget proposal Tuesday that includes a tax break for veterans, a tuition freeze for college students and incentives to encourage Internet expansion in rural Iowa, a more modest list of priorities one year after he collaborated with lawmakers to enact sweeping changes.
Branstad’s roughly $7 billion spending plan also includes proposals to halt school bullying and increase funding for apprenticeship job training programs. He discussed those goals in his annual “Condition of the State” speech before a joint session of the Legislature.
In his remarks, Branstad — who is expected to run for a sixth term this year— repeatedly used the phrase “Iowa is working.” At times, the speech sounded like a campaign pitch.
“Iowa is working. The Iowa dream is here to be realized. But I believe we can — and we must — dream even bigger,” Branstad said.
Last year, Branstad worked with lawmakers in the politically divided Legislature on a property tax cut, new education spending and an expansion of low-income health care.
The state is projecting a budget surplus of nearly $900 million. But Branstad has said that money is mostly needed to pay for the policies approved in 2013 over the next few years. The budget plan includes $120 million to provide funding to local governments to make up for some of the lost property tax revenue. It also contains $54 million for the education policy changes.
This year is scheduled be a shorter session and is an election year for many lawmakers, meaning less activity is expected. Branstad has focused on policies with a good chance of bipartisan support.
The budget proposal for the fiscal year that begins July 1 represents about an 8 percent increase in general fund spending, compared with the current fiscal year. In addition, there is some spending allocated from other state funds.
Under the proposals for veterans, military pensions would be fully exempted from state income tax, compared to the current system where retirees may exempt a portion of that income. That would cost the state a projected $10 million in lost revenue.
“In Iowa, we honor our veterans - not only with words and ceremonies, but with action,” Branstad said.
A bullying law has failed to advance in the Legislature in the past. Branstad’s plan this year would require schools to notify parents if their child is involved in a bullying incident. It also would give schools some discretion to deal with bullying off school grounds, under certain conditions.
“We can untie the hands of schools to allow them to better address cyberbullying,” Branstad said.
The Internet expansion proposal would offer property tax breaks to companies that install broadband infrastructure in underserved areas before the end of 2018. And the apprenticeship plan would triple the funding for such job training programs.
Legislative leaders from the Republican-majority House and Democratic-controlled Senate were largely positive Tuesday about Branstad’s plans.
“I think all the proposals have some pretty broad based support in the general assembly,” said House Speaker Kraig Paulsen, R-Hiawatha.
Senate Majority Leader Mike Gronstal, D-Council Bluffs, called Branstad’s proposals a “good, solid bipartisan agenda.”
Political posturing is expected on some issues with little hope of success in the divided legislature. That will likely include Republican efforts to push an income tax cut and Democratic moves to increase the state minimum wage.