Branstad also said he wants to change school funding rules so that local districts can no longer raise their property taxes to match state funding increases for schools.
The education proposal also calls for for increased leadership opportunities and incentive pay for teachers, as well as developing an assessment program to gauge if high school seniors are ready for college or the workforce.
Some Democrats are pushing educational priorities not included in Branstad's plan. Senate Majority Leader Mike Gronstal, D-Council Bluffs, wants more resources for adult learning.
"Iowa is one of just three states that provide almost no support to adult basic education," Gronstal said during his opening remarks Monday.
Other major issues likely to be debated this session are commercial property tax reduction and whether Medicaid should be expanded in Iowa as the federal health care law requires.
Senate President Pam Jochum, D-Dubuque, said Medicaid expansion will be a priority.
"Last month, I listened to Iowa's health care leaders from across the state. The people who know Iowa health care issue best are speaking with one voice. They are urging us to expand Medicaid," Jochum said.
Branstad has questioned the cost of an expansion, and House Speaker Kraig Paulsen, R-Hiawatha, last week said Republicans would be "slow to warm up" to that idea.
Earlier Monday, Paulsen told Republicans at a party breakfast that he wants much of the surplus to be spent on tax cuts.
"House Republicans, Republicans in general, we believe it's your money. We believe it's Iowans' money," Paulsen said.