Economists say Gov. Branstad of Iowa has to choose between better education and spending cuts
Some of Gov. Terry Branstad’s campaign pledges — to reduce the cost of government by 15 percent, raise family incomes by 25 percent, create 200,000 jobs and have the best schools in the nation — may be mutually exclusive, economists say.
Andrew Cannon, a researcher for the non-partisan Iowa Policy Project, said it will be hard to reduce the cost of government by 15 percent without affecting the state’s quality of education, for instance.
“I can tell you that education — whether it’s K-12 funding, funding for community colleges, or funding for our three public universities Iowa — is a large portion of the budget,” Cannon said. “Any further budget cuts are going to touch education. It would be very difficult to touch the budget without cutting education simply because it’s such a large portion of what the state spends its money on.”
Cannon pointed out funding for higher education in particular has seen large cuts over the last 15 years.
“Education costs money,” he said. “If you want quality teachers and quality facilities it’s going to cost money, so it’s hard to imagine having a world class education on a shoestring budget.”
And Mike Owen, assistant director of the Iowa Policy Project, said cutting government spending can not only harm education but the economy as a whole.
“You start laying off teachers, start laying off police officers, start laying off street workers, that has a spin-off effect in the economy because people can no longer buy things themselves,” Owen said.
There’s also a question as to whether cuts in general are a good idea, Owen said, because there are rarely obviously wasteful items to remove from the budget.
“You’re going to cut things that are going to encourage job growth or income growth,” he said. “There is no Department of Waste, Fraud and Abuse.”
Branstad spokesman Tim Albrecht said according to projections, the state has already reduced the cost of government by 12 percent from the course it was on prior to Branstad taking office. And Branstad believes growth in jobs and incomes will come from the private sector, not the public sector.
“The governor believes the government’s role in this is to remove crushing regulatory burdens that stifle job creation, and enact pro-growth tax policies,” Albrecht said.
According to the Legislative Services Agency, the 2010 assembly appropriated $5.3 billion from the general fund for fiscal year 2011, and $7.2 billion overall.
The 2011 assembly appropriated $5.9 billion from the general fund for fiscal year 2012 and $7.1 billion overall. The 2011 assembly also appropriated $5.1 billion for fiscal year 2013 and $5.9 billion overall, with most agencies funded at 50 percent of the 2012 level.
Branstad has been traveling the state pitching a plan to reform education in the state, following a series of meetings on the topic. He’s proposing a change in the way teachers are evaluated and paid, among other things.
Those plans will likely call for additional spending, although the price tag for that is unclear at this point. But Albrecht said through advancement in best practices and technology efficiencies, further savings in the cost of government can be achieved.
“We believe that with our efforts to eliminate job-crushing regulations, encourage economic growth and the addition of new jobs, state government will be well-positioned to serve the needs of its citizens through private-sector growth and subsequent tax receipts,” he said.
House Speaker Kraig Paulsen (R-Hiawatha) noted a 2 percent increase in aid for K-12 schools in FY2013 is already in place, after the Legislature provided 0 percent growth for schools in FY2012.
“We’ve already committed that we’re going to spend more on education, so that’s going to happen,” Paulsen said. “But we probably don’t know if it’s going to be more than what we committed in that. The governor has a proposal there and we’re going to work on that as well. We’ve still got quite a bit of work to do.”
The state must invest in education at every level so Iowans can add value to themselves and be able to compete for jobs, said State Sen. Jeff Danielson (D-Cedar Falls).
“You cannot goose egg your schools and expect them to compete for the future,” Danielson said. “There’s no state in the country that can disinvest in education and be successful in the future. That’s not a strategy for success.”
Iowa State University economist David Swenson said even though Branstad “got the state’s accounts into a terrific mess” in the 1980′s, he’s since taken ownership of the subsequent creation of a rainy day fund, using generally accepted accounting principles and a 99 percent spending limitation.
“He’s demonstrated early on that he’s just absolutely not going to entertain any kind of government expansive discussion unless it involves economic development,” Swenson said.
Of all of Branstad’s goals, he’ll probably be most successful in cutting the cost of government by 15 percent, Swenson said.
“Given the fact that we have a divided House and Senate…I just don’t see any movement towards a more expansive state government,” Swenson said. “I think he’s going to have his way.”