# State Government



Republicans set to axe Power Fund, Values Fund

Incoming Iowa House Speaker Kraig Paulsen discussed plans for shrinking state government in a December 8 speech. Rod Boshart has the story:

“You should us expect us to make some tough choices,” Paulsen told a Des Moines Partnership lunch crowd. “I think you’re going to see us just wholesale eliminate a couple difference programs and a couple different offices and we’re going to start with those that have marginal or no benefit.

The incoming House leader said voters sent a clear signal that government at all levels is growing too big too fast, regulating too much, and spending and taxing too much – issues the reconfigured House plans to address next session.[…]

The Power Fund has been administered by the Iowa Office of Energy Independence in conjunction with the Iowa Power Fund Board, two entities that were created when the program was enacted in the 2007 legislative session.

Paulsen also said he would prefer to replace the Grow Iowa Values Fund, started by former Gov. Tom Vilsack, with “things that would grow the economy” under the new public-private partnership envisioned by Governor-elect Terry Branstad [….]

Paulsen’s premise is incorrect. Iowa’s state government has not been growing during the past decade; on the contrary, general fund spending has fallen as a share of the economy and of personal income. But that’s a subject for another day.

House Republicans have advocated cutting the Power Fund for some time, and doing so would theoretically save $25 million per budget year. According to Boshart, the Values Fund received $45 million in fiscal year 2010 and $38 million for fiscal year 2011. I don’t believe the real savings will be nearly so large, because too many business interests have benefited from Values Fund and Power Fund grants. Lobbyists will work to ensure that significant funding for business support remains under a different department or program.

In addition, the Iowa Senate, which is under Democratic control, may insist that the state continue to invest significant resources in renewable energy. Senate Majority Leader Mike Gronstal said last month,

If [R]epublicans have another approach that will help keep us at the forefront of renewable energy in this state and clean energy and green energy we’re completely open to looking at that. It doesn’t have to be called a power fund, it doesn’t have to be called I-jobs.

I will say this: cutting the Power Fund is more realistic than some other big savings proposed by House Republicans in the past. I expect Paulsen will be disappointed by the Legislative Services Agency’s analysis of how much can truly be saved by privatizing the state vehicle fleet or denying benefits to undocumented immigrants. The Iowa Senate will block efforts to eliminate the preschool program, although some money may be saved by means-testing that program, as Governor-elect Terry Branstad has advocated. Last year’s government reorganization already improved efficiencies in state purchasing.

One old Republican idea I haven’t heard Paulsen mention lately is implementing “the Principal Plan” to impose salary cuts on non-union state employees. House Republicans have called for requiring the governor to negotiate pay reductions on a sliding scale, from 2 percent for employees earning less than $40,000 per year up to a 10 percent salary reduction for those earning more than $100,000. This pdf file shows the projected savings in the different categories.

Share any thoughts about the state budget in this thread.

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A new job for Rod Roberts and other Branstad appointment news

Governor-elect Terry Branstad announced today that former State Representative Rod Roberts will head the Iowa Department of Inspections and Appeals in the next administration. Roberts gave up his seat after six five terms in the Iowa House to run for governor. He won about 9 percent of the vote in the Republican primary. I believe his candidacy helped Branstad by attracting social conservatives who might otherwise have consolidated behind Bob Vander Plaats.

Branstad and other Republicans have criticized Dean Lerner, the head of the inspections and appeals department in Chet Culver’s administration. They claim state inspectors have been too tough on businesses, particularly nursing home owners. The nursing home industry already gets most of what it wants from state legislators, and will cheer Roberts’ appointment. I am skeptical that Branstad plans to improve on his dismal record of nursing home regulation.

UPDATE: Clark Kauffman reported in the Des Moines Register on December 9,

Roberts, 53, told The Des Moines Register Wednesday that he didn’t apply for the job. Instead, he said Branstad contacted him shortly after the election and offered him the job. […]

Roberts said his 10 years of experience as a lawmaker will help him lead the agency, although he acknowledged he faces a steep learning curve because he has no staff management or regulatory experience.

Roberts also said he would not have any conflicts of interests – despite ties that he and his wife have to facilities that are inspected and regulated by the employees he will supervise.

Roberts has served on the boards that govern the New Hope Village care center in Carroll and its charitable foundation.

His wife, Patricia Roberts, is director of development for the foundation that provides financial support for St. Anthony Regional Hospital and Nursing Home in Carroll.

Kathie Obradovich argues that Roberts should “pledge to have no part in any regulation of operations where he has personal ties and relationships. Staff members should handle it.”

Also on December 8, Branstad named Teresa Wahlert as his choice to head Iowa Workforce Development. She is a past president of the Greater Des Moines Partnership and a member Iowa Business Hall of Fame who informally advised Branstad’s gubernatorial campaign.

Finally, Branstad announced that Courtney Kay-Decker will head the Iowa Department of Revenue. Kay-Decker is a Davenport attorney who was a member of the Iowa State Tax Review Board from 2000 to 2007.

Press releases with background on the three latest Branstad appointees are after the jump. I expect the Iowa Senate to confirm them all.

Meanwhile, outgoing Governor Culver was in Washington recently. Culver told the trade publication North American Windpower that he met with members of Congress to advocate for legislation to promote renewable energy. Presumably some job-hunting was going on as well.

For the near term, Culver will focus on completing the five weeks he has remaining as Iowa governor. After that, he will begin weighing his options. He wants to stay involved with either a wind energy company or a public interest group, adding that he would rather focus his energy on the task at hand rather than dwelling on the November defeat.

Culver chaired the Governors’ Wind Energy Coalition and lobbied Congress for a strong renewable electricity standard while the federal climate change bill was being debated. I don’t expect any progress on promoting renewable energy at the federal level, especially now that Republicans will control the House of Representatives. The tenative tax cut deal President Barack Obama struck with Republican leaders includes extending biofuels subsidies but not tax credits for wind or solar power.

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Branstad puts Debi Durham in charge of job creation

Governor-elect Terry Branstad today put Debi Durham in charge of job creation for his administration. She will start as head of the Iowa Department of Economic Development, which Branstad plans to convert into a public-private partnership. Durham’s work will be crucial for some of Branstad’s central campaign promises: creating 200,000 new jobs, increasing family incomes by 25 percent, and reviewing all state economic development programs to discard ones that don’t work. Branstad has said he will travel widely to sell Iowa to the business community, and Durham will be a partner in those marketing efforts.

Durham has worked for the Siouxland Chamber of Commerce for 17 years, and “chairs the board of the Iowa Chamber Alliance, a coalition representing the chambers of commerce in the state’s 17 largest metro areas.” She told reporters that leaving Sioux City was a hard choice. Outside economic development circles, she is best known as the Republican nominee for lieutenant governor in 2002, the year Doug Gross lost to Governor Tom Vilsack. Bret Hayworth wrote a good profile of her during the 2002 campaign. Incidentally, Gross also intended to remake IDED into a public-private partnership. Yet again, Branstad is following his former chief of staff’s playbook. David Roederer, who also headed Branstad’s staff in the past and will run the Department of Management in the new administration, has worked closely with Durham too. He was executive director of the Iowa Chamber Alliance during her time as board chair.

During this year’s campaign, Governor Chet Culver said IDED already has plenty of business input and has helped keep Iowa’s unemployment far below the national average. He also cited news reports showing that the Indiana Economic Development Corporation, which Branstad embraced as a model, touted “bogus” job creation claims and concealed information about tax credits some companies received. Iowa legislators should ensure that the revamped IDED doesn’t have similar transparency problems. Branstad can’t restructure economic development programs by government directive; he needs a new state law for that.

Culver appointed Durham to the Iowa Department of Transportation Commission and “spoke highly” of her during the September gubernatorial debate in Sioux City. Assuming the Iowa Senate confirms Durham (which should be no problem), she may need to give up her position on the transportation commission. If so, expect Branstad to appoint someone friendly to road-builders’ interests.

In related news, Branstad is raising money from private donors to help pay for the transition from Chet Culver’s administration to his own. Current Iowa law set aside only $10,000, clearly not enough to cover those costs. I look forward to seeing the list of donors. People looking to preserve certain business tax breaks or economic development incentives may be eager to help the new administration.

UPDATE: From Jason Clayworth’s blog at the Des Moines Register:

“Obviously when you hear private/public partnership that is the biggest question is the transparency,” Durham said. “What I can assure you and I’m going to take my lead from Gov. Branstad. Everything about Gov. Branstad and this administration is transparent  So anything that will have anything to do with any public funds or public funding will certainly meet that threshold of transparency.

One of Branstad’s key campaign promises is to create 200,000 jobs throughout the next five years. Durham acknowledged after today’s press conference that the goal is a tall order.

“I think it is a stretch goal but like I said will go to work every single day knowing that is the goal before us,” Durham said.

Iowa Citizens for Community Improvement criticized Branstad’s appointment of Durham today. Their statement is after the jump.

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Iowans, keep a closer watch on loved ones in nursing homes

For years, Iowa legislators have been eager to do whatever the nursing home industry asks of them. The Iowa Health Care Association’s lobbying efforts on behalf of nursing home owners have yielded impressive results. In 2009, the Iowa House and Senate unanimously passed a bill eliminating fines for dozens of violations at elder care facilities. Lawmakers from both parties have lobbied for the industry’s wish list in Washington. They have whined about inspectors “gotcha mentality” and in some cases interfered with the work of nursing home inspectors.

The Iowa Health Care Association’s influence will increase in the next administration. Governor-elect Terry Branstad told Iowa Public Television in October that he will appoint new leadership for the Department of Inspections and Appeals, with a view to more “collaborative and cooperative” work with nursing homes. That’s not good news for residents whose lives literally depend on how standards of care are enforced.

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Branstad transition update

Governor-elect Terry Branstad announced yesterday that David Roederer will serve as his budget director, in charge of the state’s Department of Management. Roederer has been part of Branstad’s “inner circle” for decades. The Des Moines Register’s Thomas Beaumont wrote in September,

Roederer, a lobbyist from Johnston, is a multi-faceted troubleshooter, a role he carved out serving in several key posts for Branstad, including chief of staff and campaign manager, during a difficult stretch of the administration.

A serious problem-solver with the ability to bring people together, Roederer is often at work behind the scenes on key campaign issues and has worked on presidential and congressional campaigns since Branstad left office.

Roederer was a key sounding board for Branstad in June as the Republican nominee evaluated a list of prospects for his lieutenant governor running mate.

Jeff Boeyink will be Branstad’s chief of staff in the new administration. Boeyink spent many years working for Iowans for Tax Relief. He served as the Republican Party of Iowa’s executive director for a few months in 2009, but left that position to manage Branstad’s gubernatorial campaign.

Tim Albrecht, who handled communications for the Branstad campaign, will be communications director for the new administration. Since September, Albrecht has been running the right-wing news aggregator The Bean Walker in addition to dealing with the media on behalf of Branstad. No word on how long he plans to combine those jobs.

I’ve been waiting to see what position Branstad would give to Jim “Burn the Boats” Gibbons. He lost to Brad Zaun in the third Congressional district primary but had major donors and supporters who are also close to the incoming governor. Yesterday Matt Schultz announced that Gibbons will chair his secretary of state transition team, “advising on issues and personnel decisions related to the business services division of the office.” Maybe Schultz will give Gibbons a senior staff position. Incidentally, Story County Auditor Mary Mosiman will advice Schultz “on issues and personnel decisions related to the elections division.”

UPDATE: Todd Dorman cracks a few jokes about Branstad taking his wife Chris on a “much-deserved” 10-day vacation in France. I don’t begrudge them their trip, but can you imagine what conservatives would say if a newly-elected Democrat took off for Europe?

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Speak up on flood prevention and land use planning

Researchers who have studied Iowa’s 2008 floods have shown that certain land use practices contributed to the natural disaster. New floodplain management recommendations from a panel of experts were mostly shelved during the 2010 legislative session. However, the appropriations bill approved just before legislators adjourned in March included some provisions that could improve floodplain management. Section 17 of Senate File 2389 (text) spelled out 10 “Iowa smart planning principles,” which “State agencies, local governments, and other public entities shall consider and may apply […] during deliberation of all appropriate planning, zoning, development, and resource management decisions […].”  Section 25 established an Iowa Smart Planning Task Force to encourage and support the use of such principles. By November 15, that 33-member task force must submit policy recommendations to the governor and state legislature.

Iowans have a rare opportunity to support wise land use policies by speaking out on the task force’s draft recommendations, which cover five broad areas:

Establish a framework to coordinate planning, geographic information and data systems, and state-level investment.

Require completion of regional comprehensive smart plans within 5 years after legislation is enacted.

Create financial incentives and offer technical assistance to incent smart planning at both the regional and local levels.

Develop a watershed planning and coordination program, including goals and strategies referencing land use for each of Iowa’s nine major river basins.

Make the definition of “local comprehensive plan” uniform throughout the Iowa Code.

The task force is accepting public comments through October 10. Click here to download the full draft recommendations (pdf file). This survey at the Rebuild Iowa Office website asks whether you support, oppose or are neutral to each specific recommendation, and leaves blank space for suggesting anything that should be added or deleted from the document. Surveys can be mailed, faxed or e-mailed to Aaron Todd at the Rebuild Iowa Office. His contact information is here.

The smart planning recommendations will be discussed at five public meetings and one webinar between September 28 and October 7. I’ve posted event details for the meetings in Spencer, Red Oak, Waverly, Coralville, and Boone below. You do not need to attend a public meeting or sign on to the webinar in order to submit comments.

Increased precipitation is expected to lead to more major flooding in Iowa in the coming decades. Terry Branstad dropped the ball on flood prevention during the 1990s. Although I-JOBS has funded many valuable flood mitigation projects, those are not a substitute for more comprehensive and coordinated land use planning.

After the jump you’ll find an action alert from 1000 Friends of Iowa, containing the times and locations for the public meetings and webinar. I’ve also posted the suggestions that 1000 Friends of Iowa co-founder LaVon Griffieon has submitted to the Iowa Smart Planning Task Force.

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Branstad's selective amnesia strikes again

Terry Branstad is taking a lot of shots at Governor Chet Culver on the campaign trail. I don’t know what’s more maddening: his lies about Culver’s record, his silence about important news affecting the state budget or his selective amnesia regarding his own record as governor.

While campaigning in Williamsburg on August 12, Branstad criticized how Culver handled questionable spending and personnel policies in the Iowa Alcoholic Beverages Division. Culver had the Department of Management impose tighter controls on the division after learning about some problems in 2008. At that time, the governor also sought legal advice about firing Alcoholic Beverages Division Lynn Walding. The Iowa Attorney General’s Office indicated Culver lacked “sufficient legal basis” for removing Walding before his fixed term was up, so Culver declined to reappoint Walding in 2010. (Incidentally, some Republicans thought Walding should have been kept on.)

According to a Culver campaign press release of August 13, Branstad told his audience in Williamsburg, “If that had been my Administration, they would have been fired immediately.” Trouble is, Culver’s campaign staff hopped in the wayback machine and found:

When a similar incident happened in the Alcoholic Beverages Division during the Branstad Administration, then known as the Beer and Liquor Control Department, Branstad didn’t even try to take any action. He even ignored an inspector general report that said they should be fired. […]

Iowa’s Inspector General Said Two Managers at the Beer and Liquor Control Department Should Be Fired. “Iowa’s inspector general said Tuesday that deputy director George Price and properties manager Dicta Izzolena should be fired from the Iowa Beer and Liquor Control Department.” [Des Moines Register, 11/21/1984]

An Affair Between Top Managers at the Liquor Department Caused Morale Problems. “[State Inspector General] Gamble concluded that there is a ‘morale problem’ at the department because of the relationship between {Deputy Director George] Price and [Properties Manager Dicta] Izzolena.” [Des Moines Register, 11/21/1984]

Top People at the Beer and Liquor Control Department Made Dubious Expenditures. “The state auditor’s office will investigate questionable business transaction at the Iowa Beer and Liquor Control Department, Deputy State Auditor Kasey Kiplinger said Wednesday… During the course of his investigation, Gamble said he also discovered a number of dubious expenditures at the department, including $2,000 for a tulip bed, $2,800 for patio furniture. $255 for a redwood planter, a painting contract that grew from $550 to $3,400, and the addition of a second layer of wall paneling in a state liquor store.” [Des Moines Register, 11/22/1984]

Branstad Said He Wouldn’t Take Action To Correct Problems at the Liquor Department. “Branstad told reporters it is up to [Dept. Dir.] Gallagher and the Beer and Liquor Control Council to Decide what action to take, if any, when Gamble completes his investigation, because the governor has no direct control over the agency. ‘I believe that once they’ve got the facts and the information, they will make the appropriate decision,’ Branstad said.” [Des Moines Register, 11/14/1984]

Bad Actors at the Beer and Liquor Control Department Only Received a 30 Day Suspension. “Two Iowa Beer and Liquor Control Department officials were suspended for 30 days without pay Monday even though Iowa Inspector General Jerry Gamble said they should be fired.” [Des Moines Register, 11/27/1984]

I didn’t remember this incident, but you’d think it would have made an impression on Branstad. Then again, he seems to conveniently forget lots of things that happened in the 1980s and 1990s. I expect Branstad to get a refresher course on his own record during the next couple of months. The Culver campaign has had staff go through 1,000 boxes of files from Branstad’s time as governor, and only a small portion of what they found has been published so far.

Share any relevant thoughts in this thread.

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IA-03: Boswell campaign questions Zaun's judgment

Brad Zaun’s public record faced little scrutiny during the seven-way Republican primary in Iowa’s third Congressional district, except for one time when Dave Funk targeted Zaun’s vote for an anti-bullying bill in the Iowa Senate. During the general election campaign, however, Zaun will have to defend his record.

Yesterday Representative Leonard Boswell’s campaign highlighted Zaun’s knee-jerk defense of Lynn Walding in February, when Governor Chet Culver let Walding know he would not be reappointed as head of the Iowa Alcoholic Beverages Division. Zaun told the Sioux City Journal,

“I’m very upset about this,” Zaun said. “It seems to me that because of the dysfunction that’s going on in the governor’s office that he’s just the fall guy. I think the governor should reconsider because I think he was one of the best, most qualified people that works for the governor. I find it very disappointing.”

If Zaun had tried to find out why Culver declined to reappoint Walding, he might have learned about excessive spending and strange personnel decisions in the Alcoholic Beverages Division under Walding’s leadership. Those became public knowledge last month, when the state auditor’s office released a report on the Alcoholic Beverages Division in 2008 and 2009. However, Walding’s extravagant purchases and other actions raised concerns in the governor’s office two years ago, prompting the Department of Management to impose new controls on the division. The Des Moines Register reported on August 5 that Walding “sought to discipline a state worker who blew the whistle on potential misspending at the agency” and was seen shredding boxes of documents before he left state government in April.

Zaun seized an opportunity to bash a Democratic governor without doing any fact-finding on whether Walding deserved to keep his job. Absurdly, he declared Walding to be one of the “best, most-qualified” people in state government. Tell that to the workers who feared retaliation if they came forward with complaints about money wasted. Residents of Iowa’s third district need a representative who does his homework before mouthing off.

I posted the Boswell campaign’s statement after the jump.

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Make that 18 Iowa casinos

The Racing and Gaming Commission voted unanimously today to grant a new casino license for Lyon County in Iowa’s far northwestern corner, but the five commissioners rejected applications for new casinos in Fort Dodge, Ottumwa and Tama County. The vote is no surprise; only the Lyon County project was expected to bring in mostly out-of-state gamblers. Opponents argued that the Fort Dodge, Ottumwa and Tama projects would hurt several of Iowa’s 17 current casinos. Also, the commissioners raised questions about the financing of the other projects during last week’s public hearing.

Governor Chet Culver said today that he respects “the independent body that ultimately makes the decision,” but defended his open letter to commissioners urging approval for all four new casino applications:

“I think it’s important for everyone to know where a governor stands. That’s why a public letter made perfect sense,” Culver said.  “Commission members had asked me prior to that letter. The executive director of the Racing and Gaming Commission had asked me prior to that letter. The four communities had asked me prior to that letter. I felt I had an obligation to make sure everyone understood I was for job creation in those four communities.”

Former Governor Terry Branstad is among those who have criticized Culver for trying to influence an independent body. But let’s not be naive: commissioners usually find out through private channels what the governor thinks of such proposals. I don’t see any reason to keep the public in the dark.

Whether Culver helped himself politically is a different question. Some people in the affected communities may appreciate that he did his best to move the projects forward, but the risk is that the governor looks ineffective now that the commission has rejected the Fort Dodge, Tama and Ottumwa applications.

Share any relevant thoughts in this thread.

UPDATE: Radio Iowa has reaction from the groups that sought casino licenses.

Todd Dorman wasn’t impressed by the commissioners’ decision:

I’ve said many times that I think if a county votes for gambling, has financing and a plan, they should get a license. I don’t care if existing casinos don’t want competition. It’s a mature industry. A free market, supposedly. What’s with gambling titans who don’t like risks? […]

Tama and Ottumwa had public votes, but their plans were full of missed deadlines and big funding holes. I don’t blame the commission for voting them down.

Fort Dodge had a 57-percent yes vote, money and a plan. Oh, and baggage. Two backers are being investigated for possibly giving illegal campaign contributions to Gov. Chet Culver. City workers were famously paid to attend a pro-casino rally, etc. There was plenty of foot-shooting to go around.

But Fort Dodge’s plan could have been certified baggage-free by Good Housekeeping and it still would have been voted down because it threatened to take profits from the Wild Rose Casino in Emmetsburg. Wild Rose paid millions of dollars for a state license in 2005, and that, evidently, includes a no-competition insurance policy.

A commission that was once a friendly dealer handing out licenses to the lucky is now a security guard protecting its flock from competition.

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Bring on the clash of the auditors

Was anyone else disappointed that the “major endorsement” Terry Branstad’s campaign hyped yesterday turned out to be State Auditor David Vaudt? He’s not exactly a celebrity, and his stamp of approval only reinforces that Branstad is the Republican establishment candidate. I guess the big deal is that Vaudt normally does not endorse in competitive Republican primaries, but when I think “major endorsement,” I think game-changer, and Vaudt doesn’t fit the bill.

At yesterday’s press conference, Vaudt cited several of Branstad’s accomplishments as well as his proposals for the future. For example, he praised the 1985 government reorganization. It takes guts for Branstad to keep bragging about “cutting out half the state agencies” when Iowa’s general fund budget increased by 166 percent during his tenure, and the number of state employees increased by about 15 percent (from 53,342 in 1983 to 61,400 in 1999).

Vaudt also credited Branstad with implementing budget reforms to use generally accepted accounting principles, establishing the rainy day fund, spending no more than 99 percent of expected revenues, and leaving Iowa with a $900 million surplus in 1999 (which happened to be near the peak of an economic cycle). As State Representative Chris Rants has noted, Governor Branstad wanted to spend more:

Republicans were unwilling to go along with Branstad’s desire to spend more money – a fact he forgets when he talks about how much money was left in the reserves when he left office as it was only there because the legislature wouldn’t agree to his spending plans.

Vaudt praised Branstad for promising to reduce the cost of state government by 15 percent. We still haven’t seen specifics about how Branstad will achieve that. The 2011 budget was adopted in March; it’s past time for Branstad to tell us which services or programs he would eliminate to put us on track to reduce the size of government by 15 percent. Cutting funds for preschool programs, family-planning services and Area Education Agencies administrators won’t be nearly enough to keep his promises on spending.

Vaudt’s endorsement invites questions about Richard Johnson, who was state auditor during most of Branstad’s time as governor. Johnson famously endorsed Fred Grandy during the 1994 Republican primary and now co-chairs Bob Vander Plaats’ gubernatorial campaign. Asked about Johnson yesterday, Branstad said,

“First of all let me say, I’ve learned a lot.  Dick Johnson made some valid criticisms back in the 80’s when the Democrats were in control of both houses of the legislature.  As a result we put together the Committee to Reform State Spending in 1991 and passed the spending reforms.  I didn’t just accept the legislature saying, ‘That’s all we can do.’  I brought them back twice in 1992 until we got all the spending reforms.”

Branstad went on to say that, after Republicans got control of the Iowa House in the 1992 elections, they passed the 99% spending limitation, and he strictly enforced that limit the rest of the time he was in office.

Whatever reforms Branstad enacted in 1992 weren’t enough to satisfy Johnson two years later. Johnson also called out Branstad for misleading claims about reducing the size of government. Chet Culver’s campaign released several news clips yesterday about Johnson and Branstad, including this one:

The Cedar Rapids Gazette reported that “Where Branstad claims a 16 percent reduction in the number of management employees in state government, for example, Johnson contends the reality is that jobs weren’t eliminated. Titles were changed. ‘The people and the payroll are still there.'” (Cedar Rapids Gazette, 6/4/1994)

I posted the Culver campaign’s release after the jump for those who want to stroll down memory lane about Branstad’s record on fiscal issues.

Speaking of Branstad’s accountability problem, the Des Moines Register reports today that he spoke out publicly for a racetrack in Cedar Rapids in 1984. Branstad recently criticized Governor Chet Culver for advocating approval of four new applications for casino licenses. He claims that unlike Culver, he never directly contacted members of the Racing and Gaming Commission to urge approval of the Cedar Rapids racetrack. I highly doubt that the commissioners were unaware of then-Governor Branstad’s opinion. Most governors make their views known to state commissions via backdoor channels.  

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Don't believe everything Republicans tell you about spending cuts

Yesterday the Iowa House State Government Committee voted down a Republican plan to cut state spending by $290 million in the coming year. State Representative and gubernatorial candidate Chris Rants offered the plan as an amendment to the government reorganization bill. He said his party was trying to “work in a bipartisan way” and make “tough decisions” to balance the budget for the coming year. All twelve Democrats on the House State Government Committee voted against the GOP amendment, while the nine Republicans voted for it. Later the same day, the committee approved the reorganization bill on a 20-1 vote, with only Rants opposed.

We are sure to hear more from Rants and other Republicans about how big, bad Democrats rejected their good ideas for spending cuts. A closer look reveals funny math in the Republican “plan.”

The biggest line item is “$92.3 million, end all state benefits to adult illegal immigrants.” The Iowa House Republican caucus claims this number comes from the nonpartisan Legislative Services Agency. The implication is that the state of Iowa hands out $92.3 million in cash to illegal immigrants.

But that’s not the case. From a report by the Legislative Services Agency on “Undocumented Immigrants’ Cost to the State” (pdf file):

The only government services that illegal immigrants are eligible for are elementary and secondary public education and emergency health care.1 Most citizens do not gain direct benefits from a majority of government spending. Instead, government programs are intended to benefit society as a whole through maintenance of a healthy economy, satisfying public health and safety concerns, providing basic infrastructure, etc. Although undocumented immigrants do not receive most direct benefits, the total benefit of State spending is assumed to accrue to undocumented immigrants at the same rate as legal residents.

The LSA divides total spending from the state general fund by the state’s total population to calculate roughly how much in “benefits” each Iowa resident receives annually. This isn’t a cash payment from the state to residents; it represents each individual’s share of benefit from the state paying for schools, roads, and so on.

Iowa House Republicans arrived at the $92.3 million figure by dividing total general fund expenditures by the number of undocumented immigrants currently estimated to be living in Iowa. They call the remainder “benefits” that illegal immigrants receive. But there’s no magic wand we can wave to make immigrants stop benefiting indirectly from what state government does. The same LSA report noted:

Undocumented immigrants qualify for few services at the State level, and those for which they do qualify are largely mandated by federal law or the Courts. Therefore, decreasing undocumented immigrant eligibility for State spending does not appear to be a viable policy option. Additionally, if the assumption that undocumented immigrants accrue benefits even without receiving direct services is considered valid, attempting to reduce direct State expenditures on undocumented immigrants would have a minimal effect.

By the way, proof of citizenship and identification are already required for Iowans participating in Medicaid and HAWK-I (the children’s health insurance program).

Scoring points against undocumented immigrants may be good for Rants politically, but that won’t help the state of Iowa save $92.3 million in the coming year. That one item represents nearly a third of the Republican-proposed spending cuts.

I’ve posted the full list of cuts after the jump. Some ideas may have merit, but most of them reflect skewed Republican priorities for state government. GOP legislators want to save $45 million by reducing access to pre-school for four-year-olds. They also want to invest less in renewable energy production and energy efficiency measures by eliminating the Power Fund and the Office of Energy Independence, which would $25 million. Many Republicans never liked the core curriculum, so it’s no surprise they’d like to save some money by delaying its implications. The Des Moines Register’s Iowa poll in November indicated that Iowans support higher spending on renewable energy research and development and are divided over whether to cut funds for expanded free pre-school.

Some of the smaller Republican-backed cuts would please conservative interests. The religious right would love to eliminate the family planning waiver. Rants has always been a good friend to tobacco companies, who would love to see the state scrap the “Just Eliminate Lies” anti-smoking campaign. There’s also $4 million saved by cutting “taxpayer-funded lobbyists,” which sounds great until you realize that would leave corporate groups unchallenged as they lobby for bills that might counter the public interest. Anyway, last year taxpayer money for lobbying totaled about $1.8 million, and a lot of that didn’t come from the state general fund. Municipalities, county agencies and associations like the League of Cities hire lobbyists too.

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Culver "Condition of the State" speech thread

Governor Chet Culver addresses the Iowa House and Senate this morning. Kathie Obradovich’s latest column emphasizes that Culver has broken with tradition this year by not submitting his draft 2011 budget to lawmakers before the big speech. (The governor submitted a draft budget for fiscal year 2010 in late December 2008.) Obradovich concludes that Culver needs to be in the “spotlight” without focusing on the budget.

She doesn’t mention other factors that seem likely to have delayed the budget draft. The Tax Credit Review Panel, which Culver appointed after the film tax credit fiasco, only just submitted its recommendations on January 8. I can’t imagine how the governor’s staff would put together a draft budget without knowing which tax credits deserve to be continued, scaled back or eliminated. Another possible source of delay is the State Government Reorganization Commission made up of Iowa House and Senate members, which voted on a list of cost-saving measures last month. Those measures would affect assumptions on state spending in the coming fiscal year.

Republican former governor Terry Branstad bragged to Obradovich that he always submitted his budgets early, adding that state legislators now face a shorter session without having the budget in hand.

However, Senate Majority Leader Mike Gronstal told Radio Iowa this week that lawmakers will move a major bill on reorganizing state government before they start work on next year’s budget. It makes sense, because you can’t make accurate spending projections without knowing how state agencies will be restructured.

I’ll update this post later with more details of Culver’s speech.

UPDATE: The Burlington Hawk Eye posted the transcript. He asked legislators “to pass a supplemental appropriations bill early this session to restore some of the cuts to the Department of Public Defense” (Culver cut the current-year budget across the board in October.) For the fiscal 2011 budget, Culver asked lawmakers “to fully fund community college job training, and to adequately fund the Department of Workforce Development. And, to create more ‘green collar jobs,’ of the future, to fully fund the Iowa Power Fund.” Longer excerpts from the speech are after the jump.

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Selling the Iowa Lottery should be off the table

Iowa voters handed Democrats the keys to run the state in 2006 and expanded the Democratic majority in the legislature this year. Now we have to prove that we are capable of governing well. Like almost every other state, Iowa is facing a deteriorating revenue base while demands for government services rise in a tough economy. Governor Chet Culver has already imposed two rounds of budget cuts, and more difficult choices will need to be made during the upcoming legislative session.

There is no perfect solution to the budget problem, but some proposals are so bad that they should be ruled out immediately.

Selling the Iowa Lottery is a terrible idea on every level.

I don’t often agree with Des Moines Register columnist David Yepsen, but he is right about this:

Why would anyone want to sell their seed corn? And why would Iowa want to do something that may lead to expanded gambling? […]

We should privatize those governmental functions that cost the taxpayers, not the ones that make them a profit. […]

Since 1985, the Iowa lottery has netted state government $1 billion. Why would we turn some of those profits over to the gambling industry? It’s short-term thinking to give up $50 million in annual lottery profits for a lump sum now.

Also, this idea breaks faith with the promise made to Iowans when we started down the path of expanded gambling: If Iowa was going to get into legalized gambling, it was going to be heavily regulated.

Now we’re going to invite casino owners and others in the gambling industry to run our lottery? I’m sorry; the history of the gaming industry is just too checkered to put people from it in charge.

I have never bought a lottery ticket, and I hate to see the state encouraging people to throw their money away on the lottery. But now that Iowa has a lottery, we should keep the profits in state hands. Selling the lottery would bring in cash this year, but we’d need to replace the lost revenue in future budgets. It wouldn’t solve the problem, and it would make Democrats look incompetent.

By the way, State Auditor David Vaudt described the idea as “a very short-term Band-Aid approach.” The plan he described would involve

a lease of the lottery for up to 50 years in exchange for a lump sum payment of $200 million and some annual lease fee.

The lottery generates more than $50 million a year in profits for the state’s budget, and Vaudt predicted the lump sum would quickly evaporate.

Of course it would.

Vaudt may be the Republican nominee for governor in 2010, and he was warning about budget problems long before Culver and the Democratic leadership in the legislature started talking about budget cuts. Do we want to hand him another talking point on Democrats’ alleged fiscal irresponsibility?

If selling the lottery is bad policy and bad politics, why would anyone consider it? Here is Yepsen’s theory:

[T]he fact that Culver is entertaining sale of the lottery is an example of how big gambling money and influence slosh around Iowa politics.

The delegation that called on him to promote the idea included former Iowa Attorney General Bonnie Campbell, who is a longtime friend, adviser and donor of Culver’s, and Jeff Link, a leading Democratic campaign strategist who also runs referenda campaigns for gambling interests.

Culver will need to show how selling the lottery is a good deal for taxpayers and not just his cronies and campaign contributors on the gambling industry’s payroll. Watch to see how much gambling money starts showing up in Culver’s re-election warchest – and in those of Democratic legislative leaders.

Democrats helped gambling interests last session by putting an unjustified exemption for casino floors into the smoking ban bill. If we care about workers’ health, why should casino employees be less protected than those who work in restaurants and bars?

Handing over the lottery would play right into Republican talking points about “special interests” controlling the Democratic Party.

Culver, House Speaker Pat Murphy and Senate Majority Leader Mike Gronstal should nip this speculation in the bud by ruling out any plan to sell the lottery for short-term gain.

What else, if anything, should be “off the table” in the context of balancing the budget? I agree with Culver that going into debt should be considered.

I also believe that shared sacrifice requires some kind of action on the revenue side, such as closing tax loopholes that primarily benefit the well-off. When middle-income and lower-income Iowans bear the brunt of cuts in services, wealthier Iowans should also be asked to help bring the budget into balance. Some economists have shown that during an economic downturn, raising taxes on the wealthy does less harm to the economy than cutting government spending.

I understand the political arguments against raising taxes in any form now. There will be plenty of time to debate that later. For now, Democrat leaders should make the easy call: keep the Iowa Lottery in state hands.

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