Iowa’s next attempt at education reform should be paid for entirely by state taxes, not local property taxpayers. Gov. Terry Branstad insisted — we asked twice — that both education reform and commercial property tax reduction can be covered by carefully budgeting surplus state revenue without gouging cities, counties and school districts.

Branstad raced through his evolving agenda in phone interview Tuesday with the Times Editorial Board. We asked for the interview to focus on education reform. But Branstad and our board covered a much wider range of topics, which we share in today’s editorial.

Education reform

Branstad wants to eliminate the allowable growth formula, which requires legislators each year to vote on incremental education funding increases borne mostly by local property taxpayers.

“We’ve had this allowable growth formula for 30 years or more. During that time, we’ve put a lot of additional money into education. But student achievement has been stagnant.”

Branstad favors state funding tied directly to measurable gains in student achievements.

“We should change our funding formula to encourage and reward student achievement and find ways to make Iowa more attractive for high achievers who go into teaching and be able to reward teachers who go into leadership positions and improve student achievement.

“I want to replace the present formula with a new one where the state would pick up the cost.”

He believes shifting more education costs to the state general fund will be especially helpful in Iowa’s urban school districts, like Davenport. “Some of the urban districts with some of the poorest students also have some of the highest property taxes. We can address that issue while we also change the way we fund education.

“We’re looking at doing this with state aid, and not under the old formula.”

Charter schools will be part of the governor’s education reform package.

“It is something that the Department of Education and (department director) Jason Glass thinks makes sense. It’s a way to eliminate rules and impediments that hurt student achievement. It is something I think is worth looking at and something that I support.”

Now, state law allows only school districts to initiate charter schools. Branstad stopped short of affirming charters operated outside of existing school districts, but suggested districts collaborate on regional charters. “You might want to have one in the Quad-Cities that people in Bettendorf, Davenport and North Scott and Pleasant Valley could attend. It wouldn’t be just limited to one school district.”

Commercial property tax reduction

The governor also reaffirmed his commitment for using state general fund money to pay for commercial property tax cuts. “We’ll be coming back with a new approach that will assure local government that we will fully fund reduction in commercial property taxes, as well as limiting (increases) in other classes of property so there can’t be a shift to other classes of property.”

Branstad believes his shift to two-year budgeting, existing surpluses and an improving economy can fulfill those commitments.

But we had to ask: What about in lean years?

“I’m not expecting to continue to see growth continue at 8 percent. But historically, it’s been about 4 percent and I believe we can achieve that in the future if we continue to make Iowa more competitive.”

Medicaid expansion

Don’t expect the governor to support expanding Medicaid eligibility. He simply is not buying the federal government’s commitment to increase its share of Medicaid funding.

“When I was governor before (1983-1999), Medicaid was less than 12 percent of our budget. Now it’s more than 18 percent. Instead of 250,000 on Medicaid, we now have about 400,000.”

He expects that federal government initiatives to cover more Americans under Medicaid would add at least 50,000 Iowans. “The costs of it are very unknown. In the past, costs of expansion of these entitlement program were grossly underestimated.”

Supporters of the expansion, including the Des Moines Register Editorial Board, suggest expansion would reduce health care costs for thousands of low-income working Iowans, effectively serving as an incentive to the small businesses who hire them.

Branstad isn’t buying it. “The Des Moines Register doesn’t have a lot of traction with me. I feel like I have a lot more in common with you folks than I do with them.”

Drinking and smoking

Branstad envisions ramping up a statewide wellness campaign. At the top of his list: Reduce binge drinking and smoking.

“We want to be able to continue focus on making Iowa the healthiest state. That requires individuals to take personal ownership of their own health. We will focus on things that help people make good choices, which means reducing binge drinking, use of tobacco and also appropriate exercise and nutrition.”

Fine goals. But can they be led by a governor who effectively serves as CEO of the state-owned hard liquor wholesale purchasing, distributing and marketing monopoly?

“We are the wholesaler. It is a significant source of revenue for the state,” he said. “Unlike when I was governor before and liquor consumption was going down, in recent years, we’ve seen it go up.”

But Branstad insists he’s not conflicted.

“I think we have the present system, which has served us well. But we do need to look at ... other things we can do to address some of the social problems associated with liquor, just as we’ve have tried to address the social problems associated with gambling.”

Similarly, we wondered how this health initiative would work in a state that exempts casinos from the state-wide smoking ban.

“I don’t think there should be smoking in casinos. But this is something the legislature will have to address. I’m an advocate for clean indoor air. I’m married to a militant nonsmoker. When I became governor, the first thing we did was eliminate smoking at Terrace Hill. I signed an executive order years ago eliminating the sale of cigarettes in the Capitol and other state office buildings. When I was at Des Moines University, we made it a totally tobacco-free campus. I’m on the side of clean indoor air in the state of Iowa.”