Branstad vetoes created ‘mean-spirited’ budget, say union leaders

Labor union leaders lashed out Thursday against line-item vetoes used by Gov. Terry Branstad to force the closure of several Iowa Workforce Development offices and strip a Legislature-approved 3 percent increase in the state’s allowable portion of the federal Earned Income Tax Credit.

“With his line item veto power, Governor Branstad has made this into a mean-spirited budget, taking his extreme corporate ideology out on the people of Iowa,” said Danny Homan, president of the American Federation of State, County and Municipal Employees Iowa Council 61.

Workforce Development Centers

Homan and Ken Sagar, president of the Iowa Federation of Labor, AFL-CIO, object to Branstad using his line-item veto authority to strip portions of four appropriation budgets approved by the 2011 General Assembly. Specifically, the unions are incensed by changes to Senate File 517, which was originally written and approved by the legislature to prohibit the reduction of the number of field offices below the number that were operational as of Jan. 1, 2009.

“With high unemployment, it seems counter-intuitive to cut the number of offices where workers and employers can connect,” said Sagar.

In a letter to Secretary of State Matt Schultz, which explained the reasoning behind his line-item vetoes, Branstad said that he must cut the mandate to keep the same number of Workforce Development offices open because “this item would prohibit Iowa Workforce Development (IWD) from putting forth an enhanced delivery system that broadens access to Iowans across the state in fiscal year 2012.”

Pointing to the computer terminals that are currently available at several sites, such as public libraries, Branstad added that “at my direction, IWD will have hundreds of additional virtual access points by the end of fiscal year 2012.”

Lawmakers earmarked roughly $3 million in unused funds from a small business program to keep the centers alive in 2012 — a practice that Branstad has railed against throughout the 2011 session. But, in a year largely marked by partisan bickering, continuance of the Workforce Development Centers — 37 in all, two of which have already closed — was one of the few issues that garnered bipartisan support.

“The disdain shown for working Iowans by these budget vetoes is staggering,” Sagar said.

Homan, referring to Branstad’s unsuccessful property tax proposal that aimed to reduce the tax burden on big-box retailers and other commercial interests, added that Branstad “wants to let Wal-Mart pay less in taxes and he wants the middle class of Iowa to pay more while eliminating the only vehicle we have in this state to help people find jobs.”

Earned Income Tax Credit

Currently Iowans making less than $45,000 per year can take up to 7 percent of their federal Earned Income Tax Credit on their state taxes. During the appropriations process, state lawmakers voted to increase that amount to 10 percent.

In using his line-item veto authority, Branstad noted that it was his desire for lawmakers to “approach tax policy in a comprehensive and holistic manner” as his primary reason for denying the tax break to the roughly 250,000 Iowa families that would have qualified.

“As such, I urge members of the House and Senate to continue to work with my office on an overall tax reduction package that both fits within our sound budgeting principles while reducing those taxes that are impeding our state’s ability to compete for new business and jobs.”

When asked by The Iowa Independent if the veto indicated that Branstad was solely interested in commercial tax breaks or if he believed the EIC increase would pose a challenge to job growth, spokesman Tim Albrecht responded that “the governor strongly supports tax relief for all Iowans and believes the increase in the earned income tax credit can be a piece of a larger effort to reduce taxes in Iowa.”

Homan held that the line-item vetoes were “a direct slap in the fact to Iowa’s working families.”

“I find it amazing that Governor Branstad would have the nerve to hold up the legislature and possibly force a state government shutdown in support of his plan for corporate tax breaks, yet veto a small increase in the Earned Income Tax Credit which would help many middle class families in this state. That, along with his veto of a law that would create more transparency for corporations and outside parties who do business with governments shows exactly who Branstad is siding with in this budget — the wealthiest Iowans and corporations over democracy,” Homan said.

Executive Branch Bonuses

State lawmakers purposefully prohibited bonus pay for state employees in Senate File 533, which has been a bipartisan bone of contention since a pay scandal at the Central Iowa Employment and Training Consortium (CIETC) erupted in 2006 and led to criminal convictions. Since that time, Republican lawmakers have often spoken out against possible administrative bonuses considered by the Democratic administrations of Tom Vilsack and Chet Culver.

Despite nearly unified legislative support for a ban on such bonuses, Branstad vetoed this portion of the bill, stating that it “would unduly limit the ability of the Executive branch to deploy such methods to attract, retrain, incentivize and reward exceptional employees.”

“This the same guy that has been running around the state, telling citizens how the state is going broke because they’re giving union employees a 2 percent raise and a 1 percent raise, and now he’s going to allow bonuses for his department heads,” Homan said.

Albrecht said Branstad “vetoed this language to ensure the executive branch has all the tools necessary to attract, retain and incent exceptional employees. Iowans will be better served by retention of a highly-skilled and effective workforce and the governor will continue to strive to reward those who are providing exceptional service.”

“It’s beginning to smell like CIETC again. There’s going to be no transparency, there’s going to be no checks and balances.”