Branstad vows to cut Iowa state spending, taxes

MIKE GLOVER - Associated Press
Iowa Gov. Terry Branstad smiles as he gives his inaugural address, Friday, Jan. 14, 2011, in Des Moines, Iowa. (AP Photo/Charlie Neibergall)
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Iowa Gov. Terry Branstad smiles as he gives his inaugural address, Friday, Jan. 14, 2011, in Des Moines, Iowa.

Iowa Gov. Terry Branstad opened his fifth term in office Friday vowing to ease "the yoke of government" and deeply slash state spending while also promising major reforms to the state's education system.

"Our old ways of doing the government's business must be radically altered to do the people's business," Branstad said in remarks prepared for delivery after taking the oath of office. "That is the new covenant principle No. 1: We have too much government — state, county, city, school, local — and it must be reduced."

Branstad's first task as governor will be to send the Legislature a proposed new budget that projections show has a roughly $700 million shortfall. The Republican governor did not offer details of his budget proposal during his speech, instead focusing on larger themes.

"We must be rid of the yoke of government, which taxes us too much, spends too much and regulates too much," said Branstad, who had focused on Iowa's economic problems during his campaign to oust Democratic Gov. Chet Culver. "We've gotten off track, we've over-promised and under-delivered, turning solutions into problems. Iowans deserve better. We will get back on track with a slimmer, better-managed and sustainable government you can count on when you need it."

Branstad is likely to get much of what he wants from the Legislature after fellow Republicans made big gains in November. Republicans now control the House on a 60-40 margin, while Democrats are clinging to control of the Senate by a 26-23 margin, with one seat to be filled in a special election next week.

Senate Majority Leader Michael Gronstal, D-Council Bluffs, gave Branstad credit for "a fine job" in laying out his views.

"I don't spend time looking backward, I spend time looking forward," said Gronstal. "He has his principles and we have our principles, and we're going to have disagreements."

Branstad did get kind words from one political veteran, former Gov. Robert D. Ray, who said Branstad's campaign and his inaugural address captured the desire of voters to change direction.

"I think he did a great job," said Ray. "He's certainly expressing the change that people want."

Along with slashing spending and cutting taxes, Branstad said he would focus on the state's education system. He said he would hold a summit with top education leaders before coming up with a plan for lawmakers to consider. But he said the plan would include ways to "get rid of teachers whose students consistently do not learn enough."

"Sadly, where once Iowa's education system was the envy of the world, today it is in the middle of the pack," said Branstad. "It is time to put in place reforms that are the hallmarks of high-performing school systems — starting with assuring there is a first-rate teacher in every classroom."

Branstad took the oath of office from Mark Cady, chief justice of the Iowa Supreme Court, shortly after Lt. Gov. Kim Reynolds was sworn in.

During his campaign, Branstad pledged to reduce state spending by 15 percent and push for tax cuts as well. Branstad said he would push to cut in half the nominal 12 percent corporate income tax rate and to ease property taxes on commercial properties. The corporate tax cut is estimated to cost the state about $80 million, and Branstad has not put a price tag on his commercial property tax effort.

"We will all share in the sacrifice, while protecting those who need our help," Branstad said in his prepared remarks for Friday's inauguration. "But we will remove the lead boots of excess government form our economy. And without that burden, we will be able to run like the wind in the race to prosperity."

Branstad also vowed to overhaul the state's tax system to make it more friendly for businesses.

"Our tax system, whether it be property or income taxes, punishes those who create jobs we need," said Branstad. "Both will be reduced and simplified. The job creators will be rewarded, they are welcome here and it is time our tax system reflects that fact."

Branstad was first elected as governor in 1982, serving until 1998 when he decided to step to take over as president of a large medical school. He retired from that job to again run for governor. He was already Iowa's longest-serving governor before he left office, and his fifth term only adds to that tenure.

The day of receptions and meetings was to be capped by the inaugural ball. In a nod to the state's sour economy, Branstad scaled back the inauguration and raised private funds to pay for it. Any money left over will go for scholarships for needy students.