hardware and software, but it also goes for staff development. And of course, we can now use our fiber-optic network in service for our teachers. We can use this as a training tool and we want to make sure that the teachers feel comfortable using technology as a motivational tool. It isn't that technology replaces the teacher. But the teacher who knows how to use technology can really motivate the kids to achieve at higher levels.
GT: Part of your funding strategy, as I understand it, was also separating out this fund from regular school expenditures?
Gov. Branstad: Yes, because we didn't want this to get mixed up in collective bargaining. What we did was say, okay, we are going to provide what we normally provide through the school aid formula, called the "allowable growth." That is the increase we provide to local schools. In addition to allowable growth, we will provide $150 million over a five-year period. Actually, I recommended this over a four-year period, but the Legislature made it over a five-year period. So we essentially got what we wanted although they strung it out over one more year. This gives the flexibility to the schools to use it in the way that meets their local needs.
Some schools have already made substantial investments in technology. Some have a property tax levy for that, for instance. So these state dollars augment whatever money the local school was already putting in. This is the first year of this new plan, but it has been very well received. And the money, of course, is in a separate fund. It is not subject to collective bargaining. And, as I said, it isn't limited to just hardware and software. It can also be used for staff development. But it doesn't go into teachers' salaries or something like that.
GT: As part of your overall vision, technology clearly plays an important strategic part in ensuring the economic health of the state.
Gov. Branstad: It does. And one of the things we have done from a private-sector perspective is first eliminated the sales tax on machinery, equipment and computers. And then eliminating the property tax on these. This encourages private-sector businesses to invest in the technology which is going to help increase productivity in the workplace. We see the best paying jobs are associated with these kinds of investments. I've had the luxury if being governor for 14 years. And each and every year we are doing something to try to help Iowa become more competitive. So we have tried to invest in education and in technology to improve education. But also to make the state more competitive from an economic perspective so we could get the kind of capital investments that would create good jobs and provide better income for our citizens. You know, when I first came in I was a Republican governor with a Democratic Legislature and I had to fight real hard to get what I wanted. Then I got accused by some of my conservative friends of being a socialist because I had a state-owned fiber-optic network.
But I come from a rural background and I wanted to make sure that the rural areas and the small towns did not get left out. That was very important. I had seen how the REA had helped to finance rural electrification and what a difference that made. And I felt that during my time, I could be the one who would see to it that the citizens of Iowa really led the country in building this fiber-optic network. And this, I think, also really jolted the local phone and cable companies. It has caused a tremendous amount of private- sector investment and competition in the telecommunications field. We have had some real great entrepreneurs in the state that have also done