DES MOINES, Iowa – Late last week, Governor Terry Branstad vetoed all of Senate File 2363, which included $11.2 million in one-time conservation funding for the Iowa Department of Agriculture. The full bill represented about $140 million in debt reduction and one-time spending for special projects.
“I have a responsibility to make sure that our budget is sustainable for the long term,” explained Branstad at a press conference on Monday, “and revenue has fallen off over $100 million since the legislature adjourned.”
Branstad said at the heart of the matter is a roughly $100 million shortfall after a drop in the state’s projected revenue. “Farm income has dropped,” said Branstad, adding that another factor was “the timing of the payment of farm taxes.”
Branstad said his decision was influenced by the fiscal cliff in early 2013, which pushed back the income tax filing deadline for farmers to April 15, instead of the normal March 1 deadline.
“The result was that farm tax returns last year were paid later,” said Branstad, “and farm income, if you think back to 2012, was much higher. So people paid more, and then the money came in later; it came in in April and early May. This time, farm income is down, the tax returns were due March 1 and paid earlier, and so what we find, in state revenue, in this agricultural state, is final paid tax returns are down below what expectations were. Refunds are up. And the combination of all of that is that we have over a $100 million less in projected revenue today than we had the last time the revenue-estimating conference met.”
However, Branstad pointed out that a scheduled increase in water quality funding did survive his pen.
“We did increase the funding for nutrient management from $2.4 million to $4.4 million,” said Branstad. “And since I’ve been governor, in terms of increased funding for water projects, they’ve been increased by 26 percent. There are a lot of those things that I’m very supportive of, that I just didn’t feel at this time we could afford to embark on that additional spending.”
In a prepared statement Friday, Iowa Agriculture Secretary Bill Northey called the veto a “lost opportunity” to build on the momentum of the Iowa Water Quality Inititative.
“Obviously I?m very disappointed by the Governor?s decision,” wrote Northey. “However, Iowa remains a national leader in using voluntary, science-based practices to better protect water quality. The Iowa Department of Agriculture and Land Stewardship did receive some additional funding and we will continue to work hard to help farmers better protect our soil and water.”
