ChetChase 2010 -- Branstad Budget Confusion

The once and future governor, Terry Branstad, met with the Des Moines Register editorial board today. During that meeting, the Republican said his promise to reduce the cost of state government by 15 percent may not mean that the budget will get smaller.

Yeah, it's a little fuzzy. From the DMR:

A campaign promise by Terry Branstad to reduce Iowa's general fund budget by 15 percent over five years does not necessarily mean that Iowa will have a smaller budget, the Republican candidate for governor said today.“I think what I'm saying is we're going to eliminate the 15 percent structural deficit without raising taxes but we anticipate there will be a growth in revenue,” Branstad told employees of The Des Moines Register during a meeting today.Upon further questioning, he later said:“It doesn't necessarily mean that budget will be lower.”The “structural deficit” is a longtime and expected factor in the state's finance process most commonly known as a budget gap. Some lawmakers such as House Majority Leader Kevin McCarthy, D-Des Moines, have previously compared the gap to Christmas list in which state departments request their upcoming budgets and lawmakers whittle that list to meet state revenue projections.

“I think what I'm saying is we're going to eliminate the 15 percent structural deficit without raising taxes but we anticipate there will be a growth in revenue,” Branstad told employees of The Des Moines Register during a meeting today.

Upon further questioning, he later said:

“It doesn't necessarily mean that budget will be lower.”

The “structural deficit” is a longtime and expected factor in the state's finance process most commonly known as a budget gap. Some lawmakers such as House Majority Leader Kevin McCarthy, D-Des Moines, have previously compared the gap to Christmas list in which state departments request their upcoming budgets and lawmakers whittle that list to meet state revenue projections.

Branstad has said he wants to reduce the cost of government by 15 percent over five years. That's about $900 million.

Granted, if revenues grow, the budget will not be 15 percent smaller in year-five, because $900 million will no longer be 15 percent of the total pie. So the 15 percent promise already had plenty of political wiggle room.

But this talk of cutting the "structural deficit" is new and even more squishy. Shrinking the gap between agency wants and actual revenues is not the same as making actual reductions in the size and scope of government. The former happens every year, the latter is tough.

He didn't mention that last week when he talked with our editorial board:

Q – So you propose cutting the cost of government by 15 percent. What would be a few things the government would stop doing?

“I did this back in '92, when we did the reforms in state spending. We sold the state aircraft, and that was a big expense because not only did we have the aircraft, but we also had pilots and mechanics on the state payroll. I would do the same thing with the motor vehicle fleet. Republicans recommended that. It would have saved like $34 million in the first year, and I think there would be ongoing savings beyond that.“We have like six e-mail systems, combine those and save about $20 million. You have $25 million positions that have been funded but not filled that you can eliminate. I would not hire back 1100 positions Gov. Culver wants to do of the people who took early retirement...If you fill over half of those positions, you're going to eliminate the savings.“And I would point to exactly what Mitch Daniels has done in Indiana. He was elected six years ago and he said we've got more government than we can afford. We're going to find a better way to do things. And he has systematically gone about reducing the size and cost of government by about 15 percent.''

“We have like six e-mail systems, combine those and save about $20 million. You have $25 million positions that have been funded but not filled that you can eliminate. I would not hire back 1100 positions Gov. Culver wants to do of the people who took early retirement...If you fill over half of those positions, you're going to eliminate the savings.

“And I would point to exactly what Mitch Daniels has done in Indiana. He was elected six years ago and he said we've got more government than we can afford. We're going to find a better way to do things. And he has systematically gone about reducing the size and cost of government by about 15 percent.''

But forget the wonky details debate. I think when voters hear a candidate say he wants to cut government by 15 percent, they expect that the state budget will be smaller and cheaper. Branstad is suggesting, instead, that government will be leaner, but not necessarily much smaller or cheaper.

Here is the original promise from his announcement speech in January:

"Third, the cost of government must be reduced by at least 15 percent. Government spending has skyrocketed. Yet, our population has remained the same. We have more government than we can afford. We must reduce its size and scope. We need to set priorities. We need to be more efficient. We need to be more accountable. Together, we can deliver the services we need at a cost we can afford. It's time for fiscal responsibility to come back!"

We'll see how this plays out. I've got a 5-year-old that needs to go to soccer now.