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Branstad says elections force compromise in 2013

DES MOINES (AP) — Iowa Gov. Terry Branstad is approaching the 2013 legislative session open to compromise and chastened by Iowans’ reaffirmed preference for divided government.

Branstad said in an interview with The Associated Press that as an improved economy brings in more tax revenue, he would be willing to accept higher spending requests from Democrats if that’s what it takes to gain approval of his proposals, especially those dealing with education and property taxes.

The governor’s conciliatory tone comes as he has signaled plans to seek re-election in 2014 and marks a change to his approach in the past two years. During that time, he tried to muscle through wholesale changes in property tax and education policy but failed despite a large Republican majority in the House and the smallest possible Democratic margins in the Senate.

Now, with Democrats retaining a Senate majority and cutting into the GOP’s margin in the House, Branstad said he’s willing to bargain during the 2013 session before campaign politics again descend on the Capitol.

“The election’s over,” Branstad said. “We need to focus on how we can work together.”

The election made Iowa one of just three states where Republicans control one legislative chamber and Democrats the other.

That means Branstad is one of the few governors who must work out deals with both parties if he wants to act on an agenda he spelled out in his 2010 campaign for governor.

Branstad has given most attention to his plans for reducing property taxes and changing Iowa’s education system, but he also pledged to add 200,000 jobs to the workforce, increase household incomes by 25 percent and institute stricter budgeting rules.

Branstad and the Legislature cut spending and replenished reserve accounts in 2011. Branstad said those changes combined with an increase in state revenue could give him more room to bargain with Democrats, such as Senate Majority Leader Michael Gronstal.

“I know that there are some areas where Gronstal is going to want to spend more than we do,” Branstad said. “As long as we can do it in a fiscally responsible way, it’s something we can project out five years and it’s not going to get us into trouble, we may be able to accept some of those things.”

Branstad’s overtures, backed in particular by rising corporate income tax revenue, are a departure from the past two years and a welcome signal to Senate Democrats.

The Democrats blocked property tax changes backed by Branstad and House Republicans last year, arguing that proposed cuts to commercial property taxes would hit municipalities too hard and force cuts in services. Democrats also said Branstad wasn’t willing to consider providing money to local governments to offset shortfalls.

Gronstal said Branstad’s approach in the last two sessions was based on the mistaken belief that Republicans had the upper hand. Democrats are expected to seek spending increases for education, especially primary, secondary and community colleges.

“I see it as a positive signal that he recognizes we both need to work together on a shared agenda. I’m going to take the governor at his word,” said Gronstal, of Council Bluffs.

House Speaker Kraig Paulsen warned against making plans for the increase in revenue. Some costs, such as Medicaid, will increase. And it’s not clear what it will mean to the state government if Congress fails to reach a deficit-reduction agreement, which would trigger deep cuts in federal payments to state programs.

However, Paulsen has said he also supports cutting income taxes, which could be easier given the higher revenue projections.

“It’s my expectation that the state budget will climb some,” said Paulsen, a Hiawatha Republican. “I also think there’s a number of built-in expenditures that are already going to consume a fair amount of that growth.”

Branstad said his education plan will be less extensive than his approach last session.

In 2012, lawmakers approved only a tiny piece of a program Branstad proposed aimed at restructuring how teachers are evaluated and paid and how students are tested. Lawmakers approved $2 million toward a reading research center, out of an overall program of policy changes and appropriations that Branstad’s administration priced at $25 million to start, and which leaders in both parties said would cost much more to continue.

“I think we tried to do too much,” he said.

Branstad’s proposal included requiring subject matter competency tests and increased evaluations for teachers, allowing alternative tracks to the profession for people trained in other areas, holding back third-graders who fall short of reading benchmarks and other provisions.

This year, Branstad says he’s focusing narrowly on a teacher-pay proposal aimed at recruiting and retaining new teachers and rewarding exemplary teachers.

By dropping some of the other provisions, “he is being very realistic,” said David Roederer, Iowa’s budget director.

“He believes education in Iowa needs to be reformed now,” added Roederer, a longtime Branstad aide. “And so we’re going to have to come to some accommodation in order to get that done.”

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