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Iowa News Analysis: January 22, 2009

posted on January 23, 2009 at 5:24 PM

Kay Henderson of Radio Iowa and host Paul Yeager talk about the possible sale of the Iowa Lottery to private interests, a local option sales tax for Linn County and Cedar Rapids use for flood recovery and a different flood relief bill moving through committee at the Statehouse.

Paul Yeager: Kay, the question it's been written about and it seems to be gaining steam, a story that’s not going away, that is the state of Iowa possibly selling off the lottery and some other gambling interests.  What exactly is behind this move?  It doesn't seem to be a rumor any more but it is almost fact.  What's going on?

Kay Henderson: Well, some rather harsh things were said at the statehouse this morning by Senate Republican Leader Paul McKinley of Chariton.  He said this was a backroom deal cooked up by democratic lawmakers and Governor Culver by virtue of the fact that they have received campaign contributions, a sizeable amount of campaign contributions, from the casino industry. 

He said it appeared that "the fix was in," he accused these people of cronyism and he questions why the state would be contemplating the sale of a state asset like the lottery which is revenue producing rather than thinking about selling other millstone assets.  There's no talk of selling Terrace Hill, which costs a good bit to maintain, it's a Victorian mansion. 

But there's discussion of selling the lottery -- a lot of other states have talked about this.  The state of California, I believe, was the first among many to discuss this idea because states like Iowa are struggling financially but there are so many question marks raised about the sale of a state run lottery that no state has done it yet.

Paul Yeager: So, is there any backing to what Senator McKinley is saying?  Are the contributions looking that way?  What is pushing what he's saying?

Kay Henderson: For instance, Dan Kiehl, who is a riverboat operator, a casino operator, we don't have riverboats any more.

Paul Yeager: No, they're on land.

Kay Henderson: Anyway, in 2007 he donated $25,000 to Governor Culver.  If you look at campaign finance records it appears that the top democratic lawmakers in Iowa received something in excess of $300,000 in donations from people who either are associated with the casino industry or who are employed by the casino industry to pursue the casino industry's interests at the statehouse.

Paul Yeager: So, there is something to that.  But what else -- this is a look to maybe fill a budget problem.  This could be a one-time fix.

Kay Henderson: The only reason they're talking about this is the state is in a huge budget hole and the deal that is being bandied about would see a $200 million up front payment to the state with promise of future payments of multi-million dollars to the state on an annual basis.

Paul Yeager: What's the pulse?  Is this going to happen?

Kay Henderson: It's hard to tell.  Senator McKinley was making the case today that the public doesn't like it.  But I don't think legislators have heard yet from the public perhaps because they haven't heard about it. 

I received an e-mail this week from someone who was shocked to hear this week about this idea and when I had pointed out that we had, at Radio Iowa, done seven or eight stories about it in the month of December and early January they had not heard of that.  So, if the public starts paying attention they may weigh in on this.

Paul Yeager: Well, we'll continue to talk about that.  I want to talk about another legislative action here in the final couple of minutes, Kay.  The legislature is trying to maybe make it easier for Linn County and Cedar Rapids to have a local option sales tax.  You wrote a story about that.  What's behind that?

Kay Henderson: Well, first of all, the legislature made a change in election law last year whereby local elections where you raise taxes locally are only held four times a year.  Well, Linn County officials didn't get the paperwork in place for an election to be held in March to decide a one cent local option sales tax. 

So, this bill that is moving through the legislature would essentially allow Linn County to put that issue before voters in March and start collecting a penny on every dollar of sales taxes on April 1st.  Experts say April, May and June if they are allowed to do that they'd collect $4 million.  The argument is that Cedar Rapids would use this money for obviously flood relief in their town.

Paul Yeager: And there's also a flood relief bill.  Is that part of this bill that went through committee this week?

Kay Henderson: $56 million bill, it's coming out of the state's economic emergency fund, it's geared for the flood victims themselves.  At least half of it will go for housing assistance and individual assistance to help Iowans who are directly impacted but heretofore haven't qualified for federal or state grants and loans.

Paul Yeager: Very good, Kay Henderson, as always, thank you for stopping by from Radio Iowa for tonight's visit with us behind the headlines on The Iowa Journal.

 

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