A longer update on the governor’s race is in progress, but Terry Branstad’s comments on the budget during yesterday’s Des Moines Register interview are a must-read. Since the day he declared his candidacy, Branstad has said “the cost of government must be reduced by at least 15 percent.” He put that promise in his stump speech and in his television and radio commercials. But anyone who has paid attention to his campaign rhetoric could see that the program cuts he has mentioned so far wouldn’t put Iowa on track to reduce spending by 15 percent over five years. Moreover, Branstad’s property tax relief proposal depends on the state taking over some county government functions, which would increase the state budget.

As Jason Clayworth writes,

The Register has for weeks requested Branstad outline how he would reduce Iowa’s $5.3 billion budget, of which more than 80 percent is spent on education and human services that assist the state’s economically- or physically-disadvantaged families.

Branstad’s been good at evading such questions, but his time ran out yesterday when he sat down face to face with the Register’s reporters and editorial writers. I encourage you to read Clayworth’s whole piece as well as Kathie Obradovich’s take. Some excerpts are after the jump.

Branstad has long criticized Democrats for using “one-time money” like federal stimulus dollars to boost the state budget. He insists that he won’t sign any budget in which total spending exceeds 99 percent of projected state revenues. But he moved the goalposts quite a ways yesterday:

First of all, there’s a dispute about the starting point for budget cuts. Branstad is starting with about $6 billion, which is the amount of the general-fund budget for fiscal year 2011 when you include all the one-time federal stimulus money. Gov. Chet Culver excludes that money when he says the general-fund budget is down to about $5 billion. The next governor, regardless of who it is, will have to find about $700 million in savings or revenue to close that gap.

Secondly, Branstad says you can’t just assume that the general fund will be 15 percent below $6 billion, in dollars, after five years.  He says his aim is to eliminate the state’s structural deficit. One could define that as the ongoing government costs that exceed revenues. So any growth in state revenue has a part in alleviating structural deficits.

Finally, Branstad is apparently not counting any increases in state spending that come as a result of cutting property taxes. He says Iowans should overlook growth in state government spending from his previous administration that resulted from taking on the cost of the courts and some mental-health services that were previously funded by property taxes. His staff said after the meeting that he’s committed to cutting $900 million over five years. But that may not mean a net reduction in the general-fund budget of $900 million, if you don’t count tax relief as spending.

Got that? Maybe this will make it more clear:

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.”

[…]

Iowa’s general fund budget is around $5.3 billion but Branstad’s campaign is using a figure of $6 billion because they are factoring in so-called “one-time” money that comes from sources such as federal stimulus grants that are not expected to be available next year.

Jeff Boeyink, Branstad’s campaign manager, said over a period of five years, Branstad would cut or find roughly $900 million in state spending efficiencies that would make the budge leaner. That doesn’t necessarily mean the budget would be 15 percent less because state revenues may increase. The Branstad administration would keep track of their savings in annual reports, he said. […]

Nothing Branstad has said has come close to reaching the roughly $800 million to $900 million savings he would need to reach a 15 percent savings.  One idea to eliminate ownership of state vehicles, for example, would actually cost the state more money, according to a study by the Iowa Department of Administrative Services.  A second idea to merge the state’s e-mail systems is already being accomplished via an executive order signed by Gov. Chet Culver.

Branstad has used the 15 percent reduction line as a major campaign theme.  As recently as this week his spokesman Tim Albrecht assured The Register that the proposal would be a real cut.

“Gov. Branstad won’t play shell games with the budget to deceive Iowans about the size of the problem,” Albrecht said.

The new rhetoric looks like a Branstad campaign strategy to brush off concerns about education and service cuts. The Cedar Rapids Gazette’s Todd Dorman writes,

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.”

I don’t think Branstad was just winging it at the Register yesterday, because he hinted at a similar position during his meeeting with Sioux City Journal editorial board this week: “Now, I know we’re not going to be able to accomplish all that [15% cut] in one year, so that’s why we put together this plan to do it. Now that doesn’t necessarily because there are other things that are going to happen and change in a five year period, so that doesn’t necessarily mean the budget is going to be 15 percent less.”

What do you think, Bleeding Heartland readers? Will it matter to Iowans that Branstad is backing off from one of his central campaign promises? I assume Governor Chet Culver will hit this issue hard during next week’s third and final gubernatorial debate.

Share any thoughts about the governor’s race in this thread. Branstad said other strange things during his Register interview, like wrongly asserting that Iowa’s water quality has improved. But that will have to wait for another post.