Governor Terry Branstad and State Senator Jack Hatch are debating this afternoon at the Iowa State Fair. Iowa Public Television is live-streaming the event and will replay the debate at 7 pm tonight. Share any comments about the governor’s race in this thread. I will be updating with my thoughts after the jump.

Branstad has agreed to two other debates with Hatch, but his team are refusing to allow Lieutenant Governor Kim Reynolds to debate Hatch’s running mate, Cedar Rapids City Council member Monica Vernon. It’s a strange stance for a guy who is determined to make Reynolds the next governor.

UPDATE: My live-blog is after the jump. I will add more links and discussion later. If you missed the debate, you can watch at 7 pm on Iowa Public Television. They may also keep the video up on the IPTV website. SECOND UPDATE: The full debate transcript is now available here.

THIRD UPDATE: Mike Glover saw this debate as a sign Iowa “will actually have a governor’s race this year.” Click through to read the whole piece; I’ve posted excerpts below, after the liveblog.

First question from Radio Iowa’s Kay Henderson was on what Branstad wants to accomplish during next four years that he hasn’t done during first 20 as governor. Will he keep his 1994 campaign promise to reinstate the death penalty? Branstad avoids answer death penalty question, says he’s announcing new broadband initiative tonight. Henderson follows up w/question about death penalty. Branstad says he doesn’t think there is support in legislature for that and likes to focus on things that can pass.

Henderson asks Hatch what Iowans are missing, since polls show people approve of Branstad and how things are going. Hatch says economy is going well in Iowa and nationally. We need to focus more on accountability, responsibility, and transparency. We have the most scancal-ridden administration in history. Talks about plans for education, creating jobs (not just tax breaks for big companies), and fixing roads and bridges. Rural Iowa needs help, we need to be able to repair those roads.

Branstad refutes “wild accusations” and “crazy accusations” by someone who has never represented the whole state of Iowa.

The Des Moines Register’s Kathie Obradovich asks Hatch why Iowans should invest in his campaign, given that he’s behind in fundraising and polls. Hatch says leadership is important. He represents part of Des Moines but has lived in iowa most of his adult life. Governor’s limited agenda isn’t reaching every corner of the state. We need a fresh start in education, Governor didn’t know about all these scandals, secret settlements with former employees, hush money, “no hire” lists that Branstad created. These are not made up, these are real. Courts have twice held his actions unconstitutional. He’s acting like he’s above the law, people want something fresh and new.

Branstad interrupted a question from Obradovich (about whether he has another four years in him) to emphatically assert that he is healthy enough to serve another full term and has the “energy” to do so. He is committing to serving another full term if elected. He has a great Lieutenant Governor Kim Reynolds and we are a good team. I am still skeptical that Branstad would serve another full term as governor.

In the first ten minutes of the debate, Hatch has brought up various Branstad administration scandals. Branstad keeps saying they are crazy accusations.

Hatch says Branstad has made more than 300 state employees at will rather than merit-based (who are more difficult to fire).

Responding to criticism of his decision to make administrative law judges “at-will” employees rather than merit-based employees, Branstad says that the Department of Administrative Services recommended these changes, and the legislative council approved it. Also, he says Attorney General Tom Miller (a Democrat) defended the governor’s decision to classify chief administrative law judge as at-will.

Hatch asked about top priorities: raising minimum wage from $7.25 to $10.10 per hour to bring low-income people out of poverty. More than 200,000 Iowans are living on minimum-wage jobs.

Branstad raising voice denouncing EPA administrator’s position on Renewable Fuels Standard. This is “huge threat” to agriculture and Iowa’s economy.  

Hatch asked about expanding broadband access in Iowa. He says there was bipartisan agreement on some proposals, but the “special interests” got involved. During the next legislative session, lawmakers will get to work on this again. If the industry keeps trying to stop the “little guys” from getting broadband, we need to look at how to regulate.

Branstad says he will soon release a “comprehensive proposal” to make broadband available to every citizen of Iowa. This will be a “top priority” for him, along with Home Base Iowa, just like education reform and property tax cuts were during his current term.

Question about education. Branstad talks about priorities including dual enrollment. Hatch says two years in a row, Branstad hasn’t agreed to set education funding (he’s talking about the allowable growth rate). Hatch talks about his experience growing up with dyslexia. Essential that we fund universal early childhood education. Also says we need to not give up on 16-18 year olds.

Branstad excited about rewarding teachers for taking on more responsibility. Says we approved stipend for new teachers. Says we “replaced allowable growth with supplemental state aid.” Claims former Governor Chet Culver and Hatch got Iowa into a financial mess. Hatch didn’t get chance to rebut here.

Next question is about road funding. (Hatch is on record supporting a gas tax increase.) Branstad hails actions by DOT director to save money but we need better, different system to fund roads in future that is not only focused on raising the state gas tax but alternatives. Hatch says we’ve been waiting for three years for a plan. We need to reach out to rural districts to provide resources to fix roads and bridges. He supports gradual increase in gas tax. Local governments will have say in how that money is spent. In Clinton County bridges have been closed or weight limits have been reduced because of structural problems. We need to provide services to Iowa.

Branstad says Culver threatened to veto any increase in gas tax (true, it happened in 2009). Branstad says that as gas mileage improves because of hybrid vehicles, we need to look at new ways. Not just raise gas taxes which hurts low-income people who need to drive to work. Hatch: when’s it going to happen? Branstad: Next year (laughter in room).

Branstad again mentions property tax relief. Hatch points out that this is for commercial property tax–the average Iowan will not see property taxes reduced. Branstad says it was a bipartisan compromise.

Branstad asked whether he agrees with some Republican candidates who want to eliminate state income tax for individuals. Gov says not realistic to eliminate income tax but he has been for reducing it, and we have full federal deductibility. Hatch has proposed getting rid of deductibility, but that raises taxes for some people.

Reality: federal deductibility overwhelmingly helps high-income people.

Hatch says his income tax proposal from last September is tax cut for middle class, working families. 95 percent of Iowans would get tax cut under his plan. Examples: cut for dual-income families, increasing child tax credit.

Next question is about whether tax cuts could threaten future state revenues, fiscal stability. Branstad says we’ve put together 2-year budget and 5-year projections, so we are balancing budget for five years. That’s why when he saw revenues dropping after legislature adjourned, he vetoed $135 million of one-time spending. Hatch not given chance to respond for some reason.

Question to Hatch is about state budget surplus. He’s setting the record straight on Branstad’s claim that Iowa was in a fiscal “mess” when he came back in. In 2011 we had a balanced budget, a surplus ending balance, an AAA bond rating, and were ranked third-best run state in country. Hatch says that the one-time spending Branstad criticizes was largely needed to address historic flooding. Talks about infrastructure bonding proposal that Branstad claims was a “mess.” Also, was paid back by gambling revenues–not state general fund.

Branstad says Hatch is supporting the “big debt” that could have been used for infrastructure projects. Most people didn’t like it, it wasn’t well thought out.

Reality check: even after Iowa’s infrastructure bonding proposal, Iowa’s debt load was low by national standards.

Hatch says this is about leadership. $1.4 billion of infrastructure was wiped out by 2008 floods. Branstad would have told Cedar Rapids, Iowa City, and other cities, sorry–wait till next year.

Branstad says “I’ve been governor through lots of disasters” (laughter in audience) and we’ve worked through it. You don’t have to go out and borrow a bunch of money.

Next question is about pension reform. Branstad bashes Illinois’ pension system, says IPERS is improving. He wants a bipartisan group to look at possible reforms for long-term so we don’t become another Illinois or New Jersey. Not fair that local governments bear brunt of pensions for firefighters and police.

Hatch asked whether steps need to be taken to close gap between expected IPERS revenues and payouts. Hatch says legislature has worked in a bipartisan way. He says firefighters and police deserve good pensions. Would not privatize it, make it into a 401(K).

Next question is about algae bloom that made water undrinkable for residents of Toledo, Ohio residents. Governor, at what point do we need mandatory rules on fertilizer application rather than all-voluntary? Branstad says he’s proud of our nutrient reduction strategy, getting praise nationally. Just yesterday we gave a bunch of environmental stewardship awards to farmers. Strategy is working and we need to improve on it. We’ve increased funding for it (does not mention that he just vetoed a bunch of money designated for this purpose).

Question to Hatch: don’t urban residents also put a lot of fertilizers on their lawns? Hatch says Branstad vetoed $11.2 million in water quality money that would have gone toward reducing nitrates and phosphates. If you don’t fund it, you don’t have a plan. We had bipartisan support, even Iowa Ag Sec Bill Northey was disappointed in veto.

Next question is about possible oil pipeline across state, and use of eminent domain for that purpose. Hatch says he was surprised to read about proposal. We need information and transparency, and we’re not getting it from DNR, Iowa Utilities Board, and governor’s office.

Branstad says he had a meeting with people proposing this. He told them we have some of the most valuable farmland in the world. They say they will go 2 feet below farmers’ tile lines. Iowa Utilities Board will oversee this. They need to have meetings in every county this will go through. Needs to be carefully reviewed.

Q about governing style: Branstad says he tries to choose the best people, and if we have problems, we make changes. Mentions that women are in charge of Department of Administrative Services and Veterans Affairs. Criticizes Hatch and Iowa Senate Democrats for not making information about fired state employees publicly available. He supports that change and will try to get it done.

Hatch asked whether he has experience to manage state budget. He’s a small business owner, so is Monica Vernon. You have to know what your people are doing, have to be hands-on and involved. This governor has not been involved. We have an issue in state government. Can’t keep blaming someone else, have to take responsibility. What you want in governor is someone who finds the problem before it becomes an issue.

Hatch asked about fertilizer plant project in Lee County. He emphasizes that he’s not opposed to the plant, he opposes the deal the governor made, hundreds of millions of dollars. He opposed taxpayers paying more than $3 million per job. CEO of that company paid cash for second-most-expensive condo in New York City. It’s a dumb deal.

Branstad said it was a great deal, there are 1,750 construction jobs. My opponent wants to shut it down. Iowa Farm Bureau says that plant will save Iowa farmers $740 million per year after it’s completed. State and local governments will get more tax revenue from them.

Hatch asks governor to commit to withholding last $25 million for Orascom so the deal will not be as bad.

Branstad says “you want to shut down that site.” Hatch says not true. Branstad blames Iowa Senate Ways and Means Chair Joe Bolkcom for not reducing commercial property tax more.

Next Q is about casino in Cedar Rapids. Shouldn’t market make decision instead of state government? Branstad says Racing and Gaming Commission should make decision without government interference.

Hatch says as small business owner, he trusts the market and would let the market decide. Says state law doesn’t say we need to protect the profits of other casinos.

Last question: Is there an Iowa State Fair contest you think you could win? Hatch says pie-eating contest. Branstad says he’s won the governor’s charity steer show at least three times. We raised at least $2.5 million for Ronald McDonald House, one of best things we’ve done. Started first year I was governor.

End of debate. One hour is just not enough to cover the issues.

I agree with Bleeding Heartland user natewithglasses that Hatch should be hammering on Branstad for failing to keep his key 2010 campaign promises: create 200,000 new jobs; grow family incomes in Iowa by 25 percent; reduce the cost of state government by 15 percent, and give our kids “the best education in the country.”

UPDATE: After watching the first debate, longtime Associated Press reporter Mike Glover wrote at his Iowa Horserace blog, “Against all odds, Iowa will actually have a governor’s race this year.” Excerpt:

During the opening debate, Hatch hammered the point on which Branstad is most vulnerable – the length of time he has been in office.

“I think people feel the governor has been there too long,” Hatch said. During the debate, he appeared calm and self-assured, contrasting with Branstad’s occasional excited demeanor. Branstad appeared to be the one under pressure.

“These crazy accusations are not true,” Branstad said.

Crazy accusations? And what were those crazy accusations.

“There’s stale leadership at the Statehouse,” Hatch said, describing Branstad as presiding over “The most scandal-ridden administration in the history of the state.” […]

Hatch is very wise to focus on that issue and not try to go toe to toe with Branstad on other issues. It’s the big picture items that usually drive voter decisions, and the big picture is voters may be tiring of Terry Branstad. […] Given the dynamic of the race, Branstad ought to be picturing himself as the calm, confident and seasoned governor facing an untested rival. That’s not how he’s coming across, worrying about “all these wild accusations that he makes.”