Governor Kim Reynolds proposes eliminating federal deductibility as part of a broad tax reform plan, she revealed today during her first Condition of the State address to Iowa lawmakers. She’ll have to spend some political capital to get that idea through the legislature. In a plot twist, the fiercest opposition will come from members of her own party, including leaders of the House and Senate tax-writing committees.

The Iowa House and Senate convened Monday with the usual big promises and platitudes about working together to build a better future for Iowans.

Behind the optimistic rhetoric, all signs point to another contentious legislative session. The opening day speeches by Republican and Democratic leaders, enclosed in full below, revealed almost no common ground about the focus of lawmakers’ work and no indication that the most important bills will incorporate Democratic ideas. My takeaways:

Senator Chuck Grassley hit a new low last week in running interference for the White House on the Trump/Russia investigation. After leaders of the private research firm Fusion GPS called on Congressional Republicans “to release full transcripts of our firm’s testimony” about the so-called Steele dossier, Grassley and Senator Lindsey Graham wrote to the Department of Justice and the FBI “urging an investigation into Christopher Steele.” Ranking Senate Judiciary Committee Democrat Dianne Feinstein was not consulted about the referral, which she accurately characterized as “another effort to deflect attention from what should be the committee’s top priority: determining whether there was collusion between the Trump campaign and Russia to influence the election and whether there was subsequent obstruction of justice.”

Here in Iowa, the Department of Human Services recently acknowledged that privatizing Medicaid “will save the state 80 percent less money this fiscal year than originally predicted,” Tony Leys reported for the Des Moines Register. The Branstad/Reynolds administration has claimed since 2015 that shifting care for one-sixth of Iowans to private companies would result in big savings for the state. Officials were never able to show the math underlying those estimates. Staff for Governor Kim Reynolds and the DHS now portray the miscalculation as an honest mistake, which a more “comprehensive methodology” will correct. The governor would have been wiser to pull the plug on this disaster last year.

Forthcoming Bleeding Heartland posts will address those failures in more depth. But now it’s time to hold myself accountable for the 17 Iowa politics predictions I made at the beginning of 2017. Did I improve on my showing of seven right, two half-right, and seven wrong out of my 16 predictions for 2016?

UPDATE: Plaintiffs dropped this lawsuit in May 2018 after Republican legislators retroactively legalized the governor’s fund transfer. Original post follows.

State Representative Chris Hall filed a lawsuit today, charging Governor Kim Reynolds and Department of Management Director David Roederer “conspired together to unlawfully appropriate and misuse state funds.” The ranking Democrat on the Iowa House Appropriations Committee is seeking to void “all actions taken as a result of the unlawful Official Proclamation signed on September 28, 2017,” which transferred $13 million from the Iowa Economic Emergency Fund.

That order allowed Reynolds to cover a projected budget shortfall at the end of fiscal year 2017 without calling a special legislative session. But State Treasurer Michael Fitzgerald warned the governor that the planned transfer “would not be in compliance with Iowa law.” Hall’s petition, enclosed in full below, points to the same Iowa Code provision Fitzgerald cited in his letter to the governor.

Lesson learned in 2017: I still love writing about Iowa politics, even during the worst year I’ve ever observed. But some days are far more enjoyable than others. Follow me after the jump for some high points.

Since I started writing for this website a decade ago, I’ve never worked harder than I did in 2017. This momentous year in Iowa politics provided an overwhelming amount of source material: new laws affecting hundreds of thousands of people, our first new governor since 2011, and a record number of Democrats seeking federal or statewide offices.

In addition, my focus has shifted toward more topics that require time-consuming research or scrutiny of public records. As I looked over the roughly 420 Bleeding Heartland posts I wrote this year, I realized that dozens of pieces were as labor-intensive as some of those I worked hardest on in 2015 or 2016.

I had mixed feelings about compiling last year’s review of highest-traffic posts. Being hyper-aware of clicks and views can be demoralizing, because the most labor-intensive stories rarely attract the most attention.

On the other hand, it’s fascinating to see what strikes a chord with readers. A preview of stores coming to an outlet mall in Altoona was the fourth most-read Des Moines Register article of 2017. The second most popular New York Times story contained highlights from a boxing match. And this year’s highest-traffic piece at USA Today was about the “kiss cam” at the NFL Pro Bowl.

During an unusually eventful year in Iowa politics, some hot topics at Bleeding Heartland were predictable. But surprises were lurking in the traffic numbers on posts published during 2017 (418 written by me, 164 by other authors).

Brent Roske has ended his independent candidacy for Iowa governor, explaining in a December 26 Facebook post that he will be “stepping back into the media world” soon.

At least one other gubernatorial candidate, Gary Siegwarth, is trying to qualify for the general election ballot as an independent. Like Roske, he has little chance of moving the ball forward on the issues that are driving his candidacy.

Bleeding Heartland published 140 guest posts by 81 authors in 2016, a record since the blog’s creation in 2007.

I’m happy to report that the bar has been raised: 83 authors contributed 164 guest posts to this website during 2017. Their work covered an incredible range of local, statewide, and national topics.

Some contributors drew on their professional expertise and research, writing in a detached and analytical style. Others produced passionate and intensely personal commentaries, sometimes drawing on painful memories or family history.

The state of Iowa is not at risk of losing a seat in the U.S. House after the 2020 census, according to new projections by Election Data Services. Our state has lost seven Congressional districts since 1930, most recently dropping from five seats to four after the 2010 census. But the federal government’s latest population estimates do not put Iowa among the ten states (mostly in the Midwest or Rust Belt) likely to lose a seat during the next round of redistricting.

“Not sure who the author is on this one,” State Senator Randy Feenstra wrote to me on December 15, about an hour after Bleeding Heartland had published a detailed memo from the Iowa Department of Revenue about numerous proposed tax cuts and sales tax expansions. The chair of the upper chamber’s Ways and Means Committee added, “small reductions, not sure who put this one together. However, thanks for sharing! Very grateful as I need to find out if this member is running rogue over the Senate plan.”

A week earlier, Feenstra had distributed the same document to all of his fellow Republican senators, describing it as “my idea of a tax plan” and “one of my final runs that I have had the DOR work on.”

Iowa Republican senators are considering a proposal to reduce individual and corporate tax rates and eventually phase out the state’s already-limited inheritance tax. The plan would increase revenue by making more goods and services subject to the sales tax, but those provisions would be difficult to move through the legislature, and even if enacted, would replace a small fraction of the money our cash-strapped state stands to lose from the tax cuts.

Governor Kim Reynolds told journalists this week she won’t reveal specifics about her tax plan–a top priority for 2018–until she delivers her Condition of the State address on January 9. She indicated she is waiting to see how Congress amends the federal tax code.

However, Senate GOP lawmakers and staff have received a detailed set of proposals for review. Bleeding Heartland obtained a lengthy memo describing “the tax reform plan prepared for the Governor’s Office” and estimating the fiscal impact of those changes. As with pending GOP legislation at the federal level, the largest benefits would flow to the wealthiest Iowans.

Connie Schmett was registered as a foreign agent doing work on behalf of the Kingdom of Saudi Arabia through September 2017, a new filing shows. The revelation explains why Schmett and her husband, Kim Schmett, recently disclosed to the federal government a number of donations to Iowa Republican candidates and political committees they had made since March, when their work as consultants for the Qorvis/MSLGROUP previously appeared to have ended.

Several other curiosities related to Connie Schmett’s political giving remain unexplained.

Following a public outcry, the Iowa Department of Natural Resources has abandoned an effort to weaken the state’s E. coli water quality standards.

Officials had designed the change with the explicit goal of reducing the number of Iowa waterways deemed impaired. Environmental advocates had warned public health would suffer if the DNR assessed waterways based on average readings of E. coli levels, rather than the highest single measurement of the bacteria.

Governor Kim Reynolds made a strategic error by not distinguishing herself from her predecessor in any meaningful way, judging by the new Iowa poll by Selzer & Co for the Des Moines Register and Mediacom.

Changing course on even one high-profile policy could have demonstrated strong critical thinking and leadership skills. Instead, Reynolds is in effect running for a seventh Terry Branstad term. Unfortunately for her, Iowans are inclined to think it’s “time for someone new” in the governor’s office.

Yet again, Representative Steve King has approvingly quoted a racist European politician.

Yet again, the Iowa Republican establishment is looking the other way.

Everyone could have guessed Alec Baldwin would get Iowa Democrats laughing with jokes at President Donald Trump’s expense.

But who would have predicted the serious part of the actor’s speech would evoke an even stronger response from the crowd?

Follow me after the jump for audio and highlights from Baldwin’s remarks and those of the seven Democratic candidates for governor, along with Stefanie Running‘s photographs from a memorable evening in Des Moines.

Kim Schmett and Connie Schmett have filed additional paperwork with the U.S. Department of Justice to report political contributions since their October 2016 registration as foreign agents for the Kingdom of Saudi Arabia. The documents listed the three donations Bleeding Heartland discussed here as well as some previously unknown campaign contributions. While checking those out, I noticed some oddities.

No answer at the Schmetts’ home number, where voice mail is not accepting new messages. Reached on his cell phone on November 20, Kim Schmett told me, “I’m not going to talk about it right now. It speaks for itself.”

Trust me: it doesn’t.

Iowa Senate Republican leaders have never acknowledged that Kirsten Anderson faced sexual harassment, discrimination, and retaliation while working for the Senate GOP caucus.

They have stuck to the unconvincing story that Anderson lost her job (hours after she had submitted a written complaint about a hostile work environment) solely because of her writing skills.

They didn’t allow an independent investigation of the allegations Anderson raised in a lawsuit, which a Polk County jury unanimously found credible.

They aren’t releasing any findings from an internal investigation of those allegations.

They have ensured that the legislature’s new human resources director will report to Republican political appointees.

Yet they want us to take their word for it that harassment at the statehouse will not be tolerated.

Kim Schmett, one half of an Iowa Republican power couple who were foreign agents for the Kingdom of Saudi Arabia while serving on influential state boards, made at least three donations to GOP campaigns or entities while registered as a foreign agent in late 2016. There is no record of Schmett disclosing those political contributions, as required under the Foreign Agents Registration Act.

“There is no civil discourse left and it is really sad,” Governor Kim Reynolds said yesterday, adding, “We ought to be able to debate ideas because that’s how you get to consensus.” Reynolds lamented the “vitriol” that dominates the current “vicious” political climate.

Today the Reynolds/Gregg campaign announced that Representative Steve King will be a co-chair. A written statement described the governor as “humbled by the endorsement” from a “strong defender of freedom and our conservative values” who is “independent, principled, and is fighting the good fight in Washington, D.C.”

You can posture as a consensus-seeker, or you can brag about support from a walking highlight reel of mean-spirited and dehumanizing rhetoric. Not both.

“There’s not one Republican in this state that could win an election under the rules they gave us,” asserted AFSCME Council 61 President Danny Homan after the first round of public union recertification elections ended this week.

He was only slightly exaggerating.

A review of the last two general election results shows that Iowa’s capitol would be mostly devoid of office-holders if candidates for statewide and legislative races needed a majority vote among all their constituents–rather than a plurality among those who cast ballots–to be declared winners.

Leadership is the theme of Cedar Rapids Mayor Ron Corbett’s opening commercial promoting his gubernatorial candidacy. In the first half of the 60-second spot, a woman whose home was “nearly destroyed” in 2008 says the mayor “delivered” on his promise “to rebuild our city better than ever.”

Corbett then tells listeners, “the floods in Cedar Rapids proved that we can’t wait for things to get better on their own.” Without mentioning current Governor Kim Reynolds, Corbett asserts that “Iowans can’t afford the status quo,” and the state needs “a bold new leader in the governor’s office” to “slash income tax rates and champion conservative solutions.”

Craig Lang didn’t wait for Governor Kim Reynolds to decide. He is running for Iowa secretary of agriculture, no matter whom Reynolds picks to replace Bill Northey.

In his first comments to journalists about his campaign, Lang advocated more crop diversity and better land management practices, asserting that the dominant approach to farming in Iowa is not “sustainable.” That’s an unusual message for a Republican. Stranger still is hearing a former president of the Iowa Farm Bureau Federation talk about soil health in terms more often heard from environmental experts than from Big Ag heavyweights.

Though he’s a first-time candidate, Lang has plenty of political connections and should have little trouble raising enough money for a credible statewide primary campaign against State Representative Pat Grassley or other contenders.

President Donald Trump showed yet again this week that he lies freely and is unable to behave appropriately in almost any situation calling for empathy.

Republican politicians in Washington and Iowa were silent, as usual, about Trump’s false comments and disrespectful actions.

President Donald Trump promised in January to replace the Affordable Care Act with a plan to provide “insurance for everybody” at lower cost. But in recent days, he has ensured that health insurance will soon be unaffordable for many who buy individual policies.

Republican lawmakers are considering big changes to the Iowa Public Employees’ Retirement System (IPERS). The Reason Foundation, a libertarian think tank funded through the Koch brothers network, has been studying the matter at the invitation of GOP State Senator Charles Schneider. That group recommends converting IPERS from a defined-benefit plan (with guaranteed payments for public employees) to a defined-contribution plan like a 401(k). Under that scenario, some 350,000 IPERS members would have to pay investment fees and could receive lower returns when they retire.

Similar changes could affect Iowans who pay into the Municipal Fire & Police Retirement System, Peace Officers’ Retirement System, or Judicial Retirement System.

Democratic lawmakers and staff have created a new e-mail list for Iowans wanting to stay informed about threats to public pension funds. This list will function much like the Iowa Statehouse Progressive Network, created at the beginning of this year’s legislative session, but with updates and action alerts related to state retirement issues.

Two years ago, a federal court in Idaho ruled that state’s “Ag Gag” law unconstitutional, saying the ban on “interference with agricultural production” violated the First Amendment. That ruling pointed to similar problems with Iowa’s law prohibiting so-called “agricultural production facility fraud.”

Today, “a broad coalition of public interest groups” asked a federal court to strike down Iowa’s law under the U.S. Constitution and “enter an order blocking the state from enforcing it.”

After nearly the entire Iowa GOP establishment had been sucking up to him for more than a year, President Donald Trump instructed the head of the Centers for Medicare and Medicaid Services to deny our state’s request for a waiver designed to shore up the individual health insurance market.

Trump’s intervention reflects his contempt not only for the thousands who stand to lose insurance coverage, but also for Iowa Republican leaders who have promoted, defended, and enabled him.

Iowa Workforce Development Director Beth Townsend instructed all her agency’s employees today “to be mindful of state and federal guidelines regarding prohibitions of participation in political activities while on state time or using state assets.”

The action followed Bleeding Heartland’s inquiry about a September 29 e-mail from an operations manager to more than 60 Iowa Workforce Development colleagues, recruiting volunteers for the Kim Reynolds/Adam Gregg campaign under the subject heading, “A Message from Governor Reynolds’ Office.”

State law prohibits using “public moneys for political purposes.” Administrative rules written to implement that portion of the Iowa Code forbid public employees from using public resources “to expressly advocate the nomination, election, or defeat of a candidate,” or “to solicit votes, engage in campaign work.”

Governor Kim Reynolds’ plan to transfer $13 million from the Iowa Economic Emergency Fund to balance the fiscal year 2017 budget “would not be in compliance with Iowa law,” according to a letter State Treasurer Michael Fitzgerald sent to the governor today.

If his interpretation is correct, then a special legislative session will be required to cover the year-end shortfall. Reynolds’ staff dismissed and mocked Fitzgerald’s concerns.

Attorneys for the state and a former Iowa Senate Republican staffer have agreed to settle a sexual harassment and discrimination lawsuit, William Petroski reported for the Des Moines Register today. In July, a Polk County jury awarded Kirsten Anderson $1.4 million for past emotional distress and $795,000 for future emotional distress, after hearing testimony about a hostile workplace environment and alleged discrimination and retaliation within the Senate GOP caucus.

Under the settlement, Anderson will receive $1.045 million, and the state will pay an additional $705,000 for her attorneys’ fees.

This year’s Congressional health care debate exposed a lot of hypocrisy and dishonesty among Republicans who never had a solid plan for how to repeal and replace the Affordable Care Act.

Politicians may yet revive something resembling the health care legislation that is dead for now.

The image of Governor Kim Reynolds as some kind of policy wonk should be destroyed beyond repair.

Governor Kim Reynolds won’t call a special legislative session to balance the budget for the year that ended on June 30, her office announced this morning.

They haven’t explained how a fiscal year 2017 shortfall that non-partisan analysts estimated at $104 million in July and around $75 million a few weeks ago became a $14.6 million shortfall, according to the governor’s staff.

Reynolds didn’t take questions from the press today. She didn’t even attend the briefing where Department of Management Director Dave Roederer handed out a puzzling table.

Whatever the Reynolds administration did to avert a short-term political problem will likely worsen the strain on the state budget in the coming months.

To all the Democrats who want to hear directly from each contender in the Iowa governor’s race before deciding how to vote next June: this post’s for you.

Since Bleeding Heartland published seven pitches for gubernatorial candidates from a major party event this summer, Todd Prichard has left the race and Ross Wilburn has joined the field.

All seven Democrats running for governor appeared at the Progress Iowa Corn Feed in Des Moines on September 10, speaking in the following order: Cathy Glasson, Fred Hubbell, John Norris, Ross Wilburn, Jon Neiderbach, Andy McGuire, and Nate Boulton. I enclose below the audio clips, for those who like to hear a candidate’s speaking style. I’ve also transcribed every speech in full, for those who would rather read than listen.

As a bonus, you can find a sound file of Brent Roske’s speech to the Progress Iowa event at the end of this post. With his focus on single-payer health care and water quality, Roske should be running in the Democratic primary. Instead, he plans to qualify for the general election ballot as an independent candidate, a path that can only help Republicans by splitting the progressive vote.

The hits just keep on coming from the health and human services budget Iowa Republicans enacted this year.

As if big spending cuts to public health programs, child care assistance, social worker field services, the closure of four Planned Parenthood clinics, and ending on-site ombudsmen visits to nursing homes didn’t do enough to harm vulnerable people, that budget bill also called for short-changing Iowans who sign up for Medicaid.

The Reynolds administration is moving forward with the plan to end decades-long practice on covering health care for new Medicaid recipients.

Governor Kim Reynolds is considering at least four Republican farmers–all current or former state lawmakers– to replace Bill Northey as Iowa secretary of agriculture, James Q. Lynch reported for the Cedar Rapids Gazette today. In addition to State Representative Pat Grassley and former State Representative Annette Sweeney, whom Bleeding Heartland discussed here, State Senators Dan Zumbach and Tim Kapucian are in the running, according to Lynch’s story.

“I’ve had a couple conversations with governor about it,” Zumbach, 56, said Wednesday between meetings on housing development and soybean production. “I’d certainly be available and honored” if appointed to fill out Northey’s term that runs through early 2019. The position will be on the statewide ballot in 2018.

Zumbach, whose “heart, soul and passion has always been in agriculture,” said serving as state secretary of agriculture would be an “opportunity to share my lifetime of experience to guide Iowa agriculture in a good direction.”

Zumbach chairs the Iowa Senate Agriculture Committee, having previously served as its ranking Republican. Kapucian, who has long served on the Senate Agriculture committee, “could not immediately be reached for comment” by Lynch. As the top Republican on the chamber’s Transportation Committee, he was a strong voice for raising the gasoline tax in order to fund better maintenance of farm-to-market roads. Grassley and Sweeney are both former leaders of the Iowa House Agriculture Committee and confirmed their interest in Northey’s job to Lynch.

Iowa law gives Reynolds the authority to fill Northey’s current position after he resigns upon confirmation to a senior U.S. Department of Agriculture post. The person she selects will be heavily favored–if challenged at all–in next year’s GOP primary for secretary of agriculture.

Choosing a relatively low-profile lawmaker like Zumbach or Kapucian would allow the governor to avoid taking sides between Republican power-broker Bruce Rastetter (a major donor to Reynolds and decades-long friend of Sweeney’s) and Senator Chuck Grassley (Pat Grassley’s grandfather). The downside for Reynolds: that path could anger both Rastetter and the elder Grassley.

Americans can thank the organized labor movement for many workplace standards we take for granted: 40 hours at work per week with weekends off, paid vacations and holidays, sick leave, and (unpaid) family and medical leave. Unfortunately, Republicans who now control state government have made working conditions worse for hundreds of thousands of people since last Labor Day.

Warning that “Iowa must use all available tools to prepare for strained general fund cash flows” in the current fiscal year, State Treasurer Michael Fitzgerald formally asked Governor Kim Reynolds yesterday to authorize short-term borrowing this fall. Reynolds has previously said she is confident the state will be able to pay its bills without such action.

The country’s longest-serving state treasurer counters that “prudent” management of state finances justifies cash-flow borrowing to ensure that Iowa can meet its obligations, including school aid payments, in early 2018.

The Apple corporation’s plan to build a “state-of-the-art data center” in Waukee is attracting national attention and ridicule for a state and local incentives package worth more than $4 million to the country’s most profitable company for every long-term job created.

While Governor Kim Reynolds celebrated yet another deal to fleece taxpayers, one encouraging sign emerged last week: more Iowa politicians are willing to say out loud that this approach to economic development doesn’t pay for itself.