Obradovich: Branstad's tenure as Iowa governor is coming full circle

The longest-serving governor in U.S. history has seen many state issues and scenarios play out again and again. Now, as he prepares to leave office to become U.S. ambassador to China, it’s déjà vu all over again.

Gov. Terry Branstad admits it will be tough to leave the governor’s office after finally winning a GOP majority in both the Iowa House and Senate.

“Well, it’s something that I’ve looked forward to for so long,” he said with a laugh. “But you know, timing’s everything in this business. This is when the opportunity is here.”

► PREVIOUSLY: Branstad curbs talk of door-busting tax cuts

► MORE: The long goodbye: Branstad slow-jams his transition from Iowa to China

Branstad served most of his first four terms as governor with at least one legislative chamber in Democratic control. He had two years with a GOP majority before leaving office in 1999. He returned to office in 2011 and has served with a party split in the Legislature ever since. He’ll start the 2017 legislative session this week with a new GOP majority in the Iowa Senate to work with the Republican-controlled House. But he may have to leave mid-session if the U.S. Senate confirms his appointment quickly.

There are a lot of things Branstad still wants to do before he leaves the state. We’ll know when he addresses the Legislature and presents his budget on Tuesday which ones he’ll try to accomplish before he goes. We already know he’s going to have to revisit an activity he’s done many times as governor: Cut the state budget in response to slower-than-expected revenue growth.

“I’ve done it twice before,” he said.

Branstad spent most of his time during his first stint as governor rebuilding after the 1980s farm crisis. He came back to the governor’s office in 2011 to fix the state budget after the latest recession. He’s taken a lot of political heat for some unpopular decisions, including some years with no increase in per-pupil school aid, closing Iowa Workforce Development centers and two state mental institutions. Iowa weathered the last recession better than most states, despite the economic importance of insurance and financial service industries.

The December revenue estimate showed that state revenues again have dropped below expectations. One of his first proposals of the 2017 legislative session will involve chopping roughly $100 million in spending cuts for the current fiscal year. The state budget has grown more than it has shrunk under Branstad, to be certain. But that growth has come in fits and starts.

“The budget is always an issue. It always will be, but it is an issue you have to address and you have to have the fiscal discipline to make the tough decisions. Not like Illinois. ... It’s a disaster. They don’t have a budget, they haven’t had a budget in years.” (Did you catch the Trumpism in that quote?)

The reason for the peaks and valleys in state revenue? “It’s agriculture. It’s all about agriculture,” Branstad said. Except for the 2009-2010 recession, which centered on the mortgage market collapse, he said, agriculture has been the driver of most of the state’s best and worst fiscal periods.

The current downturn is something of an anomaly, he said, because grain prices have fallen along with pork, beef and eggs. Usually, when row crops are down, livestock is up and vice versa. “I’m cautiously optimistic things are going to get better,” Branstad said, citing an increase in livestock prices.

The state economy has also continued to diversify, first with insurance and financial services and later renewable energy, biochemicals and related manufacturing. Branstad also cited expansions of data centers in Iowa by Google, Microsoft and Facebook. He hinted that a new distribution or fulfillment center may be in the works for Iowa.

“Amazon wouldn’t have decided to pay sales tax if they weren’t going to have a nexus in Iowa,” Branstad said. “What does that mean? They’re going to be putting some kind of significant investment here. That hasn’t been announced yet.”

He said Amazon already has a big distribution center in Wisconsin. “But I think you’re going to see a fulfillment center or distribution center or something like that here.”

Here are some other tidbits from my interview with Branstad:

Will Branstad export his entire family to China? “No, not everyone is going. That’s what my wife would have preferred,” he admitted.  He said he thinks his daughter, Allison, along with her husband and two daughters, might make the trip to Beijing. Allison would like to teach English in China, he said. “This is not all put together yet,” he said. “This is our vision and hope.”

Son Eric to work for Trump? Branstad hinted that he expects his son, Eric Branstad, to get a job with the Trump administration in Washington, D.C.  Eric, Trump’s Iowa campaign manager for the general election, has been in D.C. working on the inauguration.

Will he learn to speak Mandarin? “I hope to learn. The most important thing, I think, is to learn the names of the key people and whatever and some key phrases.  I don’t expect that I’m going to be fluent in Mandarin. … But it’s important and I want to do my best to show my respect and appreciation for the people of China.”

Kim Reynolds’ advantage: Branstad said his lieutenant governor, who will take over after he resigns, has at least one advantage that he lacked. It has nothing to do with being the first woman to serve as governor, by the way. Branstad said Reynolds’ background as a former county treasurer gave her lasting relationships and trust from local leaders all over the state.

“Her background in local government, that’s a great asset that she has that I didn’t have,” Branstad said.

On fulfilling Democrats’ No. 1 conspiracy theory:  Throughout the 2014 election cycle, we heard many times from Democrats and others that they suspected Branstad would leave office early, and Reynolds would run as an incumbent for the 2018 election cycle. Branstad pledged at the time he would serve all four years if elected. “I'm committed to serve the entire term and do everything I can. We've only just begun,” he said during a gubernatorial debate at the Iowa State Fair in August 2014.

Now, he attributes changing circumstances for reneging on that promise. “Look at it this way. Who would have ever thought that Donald Trump would be elected president, and he was going to choose me to be the ambassador to China. If you would look back a year ago or something like that, there’s no way in heck you would have ever predicted that.”

As Branstad said, timing is everything. We’ll see whether Branstad’s third and probably final opportunity to fix the state budget comes at a good time for Reynolds.