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Budget Priorities: Sen. Bob Dvorsky (D-Coralville) and Rep. Jo Oldson (D-Des Moines), Legislative Appropriations Committee Leaders

posted on March 27, 2009

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Borg: Balancing the books. Iowa legislators struggling to cover state budget needs with declining revenue. An update from Appropriations Committee Chairpersons Coralville Senator Bob Dvorsky and Des Moines Representative Jo Oldson on this edition of Iowa Press.

Funding for Iowa Press was provided by Friends, the Iowa Public Television Foundation. The Iowa Bankers Association ... for personal, business and commercial needs Iowa banks help Iowans reach their financial goals. And by the Associated General Contractors of Iowa ... the public's partner in building Iowa's highway, bridge and municipal utility infrastructure. By Iowa's Private Colleges and Universities ... enrolling 25% of the total Iowa higher education enrollment and conferring 44% of the baccalaureate and 40% of the graduate degrees in the state. More information is available at The Iowa Hospital Association ... supporting the missions and visions of Iowa's 117 community hospitals. The Iowa Hospital Association ... we care about Iowa's health.

On statewide Iowa Public Television this is the Friday, March 27th edition of Iowa Press. Here is Dean Borg.

Borg: It's getting to be a familiar routine during this legislative session ... budget cuts followed by more cuts. And there's no end in sight. Legislators may be feeling as though they're on quicksand because state revenue projections are a moving target these days and sliding downward. It's been a week now since Iowa's revenue estimating conference issued the latest bad news projecting $130 million less revenue than is in the already trimmed current year budget and $270 million less revenue than previously expected for next year. The front line jobs dealing with that dilemma are in the appropriations committees and that's where it is first decided what and how much gets funded. Majority democrats control those committees. Coralville's Bob Dvorsky chairs the senate appropriations committee and Des Moines Representative Jo Oldson heads the committee in the house. Welcome to Iowa Press.

Borg: Difficult days for you.

Oldson: Yes, they are for all of us.

Borg: And we're going to be talking about that with Des Moines Register Political Columnist David Yepsen and Associated Press Senior Political Writer Mike Glover.

Glover: Senator Dvorsky, let's start with you. Dean has set the stage for you, you've been around the statehouse for a few years. How bad is it? How does this compare to other downturns we've gone through?

Dvorsky: Well, I think it's the biggest downturn since I've been in the legislature twenty plus years and the latest REC clearly is a big slap in the face. So, I think it's just as bad as I've seen certainly.

Glover: Representative Oldson, same question to you. Give us some sense of how this fits in. We've had two or three of these downturns where we've had to go in and cut state budgets. How does this compare?

Oldson: Well, certainly in my tenure by far the worst and as long as I've been around the statehouse in many capacities over the years the worst I've seen and I have heard from many veterans that it's the worst they've seen in three to four decades.

Glover: Let's take it down to the average Iowan. How will they notice what you're going to do to them over the next few weeks?

Oldson: I think they'll notice it much like the way they're struggling with their own budgets. They are having to trim and there are services that are pretty important that they have to do without and as we develop the budgets over the next coming weeks we'll get a better sense of what those services are going to be. Iowans are certainly going to feel it in many capacities in their life.

Glover: Senator Dvorsky, same question to you. How will the typical Coralville resident feel what you're going to do over the next few weeks?

Dvorsky: Well, I think there will probably be some lines in places that normally aren't lines. Maybe if they go to the Iowa Workforce Development, for example, I know there's lines already in the one in Linn County unfortunately because of the situation there. So, there will probably be some longer lines there, that sort of situation. It may also stream down to the county and some of the things they do. So, I think you'll see -- any sort of state employment you'll probably see some sort of effect.

Glover: Isn't that kind of a mild impact, you've got to wait in line a few minutes longer?

Dvorsky: Well, or if you talk about actual jobs I don't know what exactly is going to happen in our area but obviously the biggest employer in our area is the University of Iowa and I'm sure you'll see an impact there with people and their jobs.

Yepsen: Senator Dvorsky, as you start fashioning the budget what is off the table? Is there anything off the table that you and your caucuses have indicated you just don't want to touch?

Dvorsky: I don't think anything is off the table but I think some things certainly are going to be priorities that they won't be cut as much or they won't -- obviously education has always been the number one priority since I've been in the legislature. The education, healthcare and public safety I think are three top priorities so those will be given a little more look at and maybe not as deep cuts.

Yepsen: We want to get into those in a minute but Representative Oldson, same question to you. Anything you can tell us right now that's off the table here?

Oldson: I think we've been pretty clear all along from the first of this that nothing is off the table at this point and everything needs a close look at it. But I agree with Bob, we've long said education, healthcare and public safety are a little bit off.

Yepsen: The question Mike was raising earlier about the effect -- if you do this right people don't notice the effect, a longer line, the phone rings a little longer when you try to call a state office. Are people really going to feel this?

Oldson: Yes, I think they're really going to feel that. I think the decline in revenues is serious enough that it's hard to imagine that people are not, over the next couple of years, going to feel this impact.

Borg: Senator Dvorsky, you can argue that in the current budget and in the projection for next year you had things already in balance as to priorities. You said just a moment ago some won't be cut as much. Why not just across-the-board cuts?

Dvorsky: Well, then you're not establishing priorities. I think if education we believe is our number one priority then we have to do the best we can to fund education and I think you'll see a lot done with K-12, community colleges, regents and others that that is indeed our number one priority and I think it is that we would try and spare them as much as possible from cuts.

Borg: Representative Oldson, that's saying to some you're not as important.

Oldson: In times of tough that's what every family does out there is set priorities and make determinations and it doesn't mean nothing is important it just means you really have to take a close look and make some tough decisions and that's what we're going to do.

Glover: Senator Dvorsky, there's been talk around the statehouse for the past week or two about wrapping this session up in the next couple, three weeks. You've got a big job ahead of you. How quickly can you accomplish all this?

Dvorsky: I think it's at least two weeks and it may be longer than that. We're starting to move forward and the appropriations subcommittees are doing a great job, they're going to have all their bills out I think by maybe Monday or Tuesday of next week so we can go from there. We're starting to have meetings with the governor's office to make sure that we're sort of on the same page with the governor and I think the process is cranking along.

Glover: Representative Oldson, you're in a house which is a little bit more bulky, a little bit slower than the senate, how quickly can you wrap this whole thing up?

Oldson: I would like to think in two weeks but I think just in terms of turning paper and we've got a rule in the house that the bill has to sit on the calendar for a certain length of time which the senate doesn't deal with so I think Bob is probably right, we're probably closer to a three week turnaround time but it's doable.

Yepsen: Representative Oldson, I want to ask you a question about tax policy. I realize the two of you head the spending committees in the legislature. But last week democratic leaders announced that you folks are going to try to repeal federal deductibility, change Iowa's income tax system and they promised that this will be what they call revenue neutral, that the state of Iowa will take no more from taxpayers than they have been doing. First of all, do you think that will be approved?

Oldson: I think it's got a good chance of being approved. I think Iowans are behind it and, yes, I think it's got a very good chance of being approved.

Yepsen: Senator, do you agree?

Dvorsky: I think it has as good a chance as I've seen in years.

Yepsen: Alright, why not get some money? Why go through the motions of something that is revenue neutral at a time when you're crying for dollars. Other states are raising taxes. Representative Oldson, why not dial up that a little bit to get some extra money?

Oldson: We came into this session saying we were not going to raise taxes on Iowans. We realize Iowans are struggling out there to make ends meet and it was not the time to put further burden on them. So, going into this we've decided to make it neutral.

Yepsen: Senator?

Dvorsky: At the risk of offending some of my friends in Johnson County I think that as Representative Oldson said, we said we weren't going to be raising general revenues this year and we tend to abide by that.

Yepsen: The republican argument -- the republicans are saying it will happen in time. So, you're going to set up a new income tax structure and then a couple of years down the road you'll make your friends in Johnson County happy because you will in fact raise taxes on Iowans. What do you say to that?

Dvorsky: I don't think that's the intent. As you said, if we wanted to go in I think the easiest way would be to go in now and take some money from it and not wait until later. So, I think our intent isn't to do that.

Glover: Representative Oldson, let's get you to offend some of your friends in Polk County and talk about the stimulus package that's coming in from Congress. You're going to get a bunch of money from Congress to help jump start the economy. How much are you going to get? What are you going to use it for?

Oldson: The stimulus package has been kind of an interesting piece of this process because it really has become like a third arm of juggling a budget through the process. Iowa is in line to get about $1.9 billion and a good chunk of that is funneled toward education and healthcare. So, for the most part, most of that money is going to come into Iowa through existing streams of programs.

Glover: A lot of people would say $1.9 billion, what are you crying about? You've got a bunch of money on your hands.

Oldson: It sounds like a lot, doesn't it? But when you talk about programs out there that we put money into education and healthcare it takes a lot of money to run those programs.

Glover: Senator Dvorsky, the same question to you. How much money are you going to get in the stimulus package and what is it going to go for?

Dvorsky: I'm not sure it's $1.9 billion, that was a number that was out there but that's sort of the number they start with and I think they get down to actually what's coming in it's probably not going to be that large. But regardless the other thing is a lot of it goes through the executive branch and through the governor's office. So, they determine how that's set up and how it deals with us. But a lot of it is for specific things and can only be spent for certain programs and things so we're in the process of sorting all that out and seeing what we can use and what flexibility we do have with that.

Glover: Doesn't that add a burden? You're talking two or three weeks, you've got a lot of work to do.

Dvorsky: We do, we're trying to do the best we can with the information we have right now and we may have to go back later and change that. And unfortunately some of the federal rules aren't even written yet.

Borg: Senator Dvorsky, there's FEMA money in there too, is there not, in addition to the stimulus package?

Dvorsky: That is separately but yes, FEMA hopefully is going to be coming up with more funds.

Borg: But you're from Coralville so you know firsthand the flood in Linn County and in Johnson County -- is that also complicating your problems in appropriations?

Dvorsky: I think it is. I serve on the Rebuild Iowa Committee and we've been trying to do things there. We were able to get $56 million out for flood relief and that is out of our cash reserve fund. But the needs in Cedar Rapids alone are like $10 billion and then you add Coralville, Iowa City and all sorts of other places and there is a tremendous need across the state. I think eventually FEMA is going to really have a big presence here but it's going to take three or four years.

Glover: And a lot of people, Representative Oldson, talk about the stimulus money as if it's going to be in one big pot of money. Isn't that stretched out over a few years?

Oldson: It is stretched out over a federal fiscal year of two years so for us at least a year and a half of fiscal year if not a little longer, yes. So, it doesn't just come in one fiscal year.

Glover: It doesn't solve your problems?

Oldson: Not every problem we've got, no.

Yepsen: Representative Oldson, I want to back up a second here and get your assessment of why did this happen to Iowa? Why are we in this budget fix that we're in, in our state?

Oldson: We're not unique certainly and in some respects we are in relatively better shape than a lot of states but every state out there is facing it because we're in a significant national economic downturn and revenues across the nation, if not across the world, are taking significant dives.

Yepsen: What about the republican argument that you've spent too much, that in the last two years democrats in controlling the legislature and the governorship you spent more than your revenues, you have not withstood the revenue limitations in the code and some of this blame really rests on your shoulders?

Oldson: Well, I obviously don't agree. I do think it is a revenue issue and not a spending issue. We have really focused our spending on those issues that Iowans sent us here to take care of and educating their kids and providing healthcare and public safety and we will continue to do that and, in fact, I think the actions coming out of D.C. would indicate those are also places they want to make sure that we protect as we move forward.

Yepsen: Senator Dvorsky, same question. Did the democrats running state government bear any blame at all for this spending mess that we're in?

Dvorsky: Well, if we're in charge we would obviously be accountable for what we've done.

Yepsen: Did you spend too much in the last two years as you look back?

Dvorsky: I don't think we spent too much, I think we spent more than some previous people spent because we needed to do that to put programs in place. We talk about education being our number one priority, we've done a lot more for education than people have done in the past and I was taken by you were talking about you're spending way too much, you're spending off budget and that sort of thing, it sounds like the complaints from when Governor Branstad was governor and they talked about that too. So, it's been a tradition in Iowa for several years to do that sort of thing that they say we're spending too much.

Glover: Representative Oldson, there's been an issue that's been tossed around over the last couple of years and that is the gas tax. The governor has taken that off the table this year, I presume that means it's not going to happen this year?

Oldson: That would be my presumption too.

Glover: And at what point does it come back on the table? There are those who argue it's not really a tax, it's a user fee that people pay largely from out-of-state to fix Iowa's highways. At what point should that be back on the table for discussion?

Oldson: It will always be on the table for discussion. Every session that I have come up here it has been an issue for discussion. At what point it has any ability to actually move forward I honestly don't have a crystal ball to know that.

Glover: Senator Dvorsky, same question to you. At what point should there be a discussion about increasing the gasoline tax?

Dvorsky: I think as Representative Oldson said it's probably every year. Recently there was discussion about that and I think there will continue to be so. We did the Time 21 situation so that is going to give us some more revenue dealing with roads but they're still looking at that and there's going to be some federal money in the stimulus also dealing with bridges and roads.

Glover: Why is that such a tough issue?

Dvorsky: I think part of it frankly is the three co-equal branches of government. The governor has a different agenda and different concerns than the legislators do on this situation.

Yepsen: Senator, you mentioned the Branstad era a moment ago and I want to back up again and ask what lessons are you and other legislators learning? Because of prior budget crises in the state of Iowa you all did some things differently. You used to argue about revenue estimates, for example, and then you created a revenue estimating conference. That doesn't seem to be an argument any more. My question to you is, what are you going to do differently to keep this from happening in the future? Your ancestors in the legislature did some things differently that mitigated your problem today. What will you do differently going forward to keep this from happening again?

Dvorsky: Well, I think in 1992 they created a lot of reforms that were put in place, the 99% spending limitation, those sort of things and those have served us pretty well I think over the last several years and I think that's something we need to look at. I don't have specific ones we can do now. I know that this budget is going to be a very, very lean budget and we need to look at that and maybe go from there and see what have we learned from these budgeting techniques we're doing right now and how that will carry forward.

Yepsen: Senator, I've got to push you on this. You talk about the 99% spending limitation -- both republican and democratic legislatures have routinely said we're going to spend more than that limitation and it's called notwithstanding. So, how is that doing us any good?

Dvorsky: I think it is still there and we still use that. I don't think -- there's been some notwithstandings but I think it has served us pretty well.

Yepsen: Same question to you, Representative Oldson, what lessons do you learn here? What are you going to do differently in the future to keep this from happening again?

Oldson: I'm not certain by keep what from happening again.

Yepsen: Budget crises.

Oldson: Budget crises are really driven, quite frankly, by revenues and what kind of revenues are coming in or not. It gets tough for a state to control a national budget crisis. So, I'm not certain how much control we can have over a national economy. I do think we are doing quite a bit of reform and looking at ways to make the budget more transparent for Iowans so that they truly know and can get well educated on where the money is going. I think a lot of it is not so much that Iowans are upset about what the spending is, it's they just don't understand it all.

Glover: And something that is working its way through the system would deal with that and it strikes me as kind of an interesting little proposition. Iowa for Tax Relief proposed a transparency act to create a searchable database of state spending and that appears to be moving. Is that going to happen?

Oldson: Well, we passed it in the house and it's over in the senate, it was a first step, I don't know what the end product will look like.

Glover: Will that be this year's step to reforming the state's budget to make it ...

Oldson: It will be one step at least trying to make it more transparent.

Glover: Senator Dvorsky, same question to you. Is that the reform this year?

Dvorsky: Yes, that is one of the reforms. I noticed the subcommittee was meeting the other day, the whole lounge was full of people looking there so we're moving forward in that area. And I think we're following President Obama on that situation. I think he has talked about more transparency and I think that's important.

Yepsen: Representative Oldson, some good things come out of budget crises. I can look back over covering state government for 30 years and seeing where previous legislatures and governors reorganized state government. Iowa Public Radio was forced into a giant merger that is really producing a much better quality product. As you look at this crises what good will come out of it? What will you say in ten years is something that you were forced to do now that really turned out to be a pretty good thing?

Oldson: I think what it really forces you to do is focus on what your core missions are as a state. I know as we worked with our budget subcommittee chairs we asked them to really focus down on what is the core mission of the area in which they are charged with bringing a budget together and I think that's one of the positives it does is make you focus on what's really the important programs and what aren't so needed now.

Yepsen: Senator, what good can come from this?

Dvorsky: I think that's true. I think really working with the budget subcommittee chairs helps a lot. Just a small example, administration regulation you have all these Department of Commerce things such as banking that are regulated and they pay fees to be regulated and obviously banking needs to be regulated right now, that's important. But that sort of inflates the budget and doesn't really show what's going on so we're trying to set up there more of wall that off and show that the revenue just comes in there and goes back out again to provide for regulation in that area. So, we used to have it as a trust fund but this is sort of a separate way of doing it so people are able to do that and see that the bankers pay their fees and then they are regulated by those fees.

Glover: Representative Oldson, you said earlier that one of your priorities that you want to protect is education. In K-12 education one of the big steps the legislature has taken over the past few years is a multi-year program to increase teacher pay. Is that off limits as far as cuts go?

Oldson: Certainly teacher pay has been an important piece to us and to Iowans. Quite frankly we sunk tremendously low over the last decade in our pay to teachers and so we have worked pretty hard to try to get us at least back up to the middle of the pack. The money coming in from the feds has been pretty clear that we are to keep our level of commitment to education so yes, I'm willing to be we will come out of here doing our best to protect education spending.

Glover: Senator Dvorsky, specifically the teacher pay increase you put in place, that's off limits as far as cuts?

Dvorsky: Well, it had the 1.5% cut, I believe, because that's across-the-board but I think yes, we're going to try and maintain that. That has been our commitment to get up to the national average. I think Iowa's teachers are great teachers, we ought to at least pay them at the national average.

Glover: So, that remains in place.

Dvorsky: Yes.

Borg: Representative Oldson, you mentioned some core values in the budget, education being one of them. It strikes me that community colleges are sometimes thought of as economic engines. How about the funding of community colleges and what sort of a priority are you going to put on that and other areas of economic development?

Oldson: Community colleges, just like all of our branches of education, are pretty core to us and we have been pretty committed to those over the years that we have been in charge and certainly community colleges are not just educating bodies but they are also part of our economic growth. So, we will continue to be pretty committed to our community college system, not just in educating our kids but making sure people get the training they need to get back out into the workforce.

Borg: And Senator Dvorsky, if you're not going to do tax increases then if you're going to get more revenue in the future economic development has to be a priority. Where are you going to put money?

Dvorsky: Well, I think we want to continue some of the programs that have been successful in the economic development department as well as community colleges. They really are providing a lot of good job training and helping bring jobs to Iowa. The one in our area, Kirkwood, is one of the best community colleges in the nation, not just in Iowa, and I think that is one of the areas that we're going to continue to support those type of programs.

Yepsen: Representative Oldson, democrats like to think of themselves as environmentalists, are you going to be able to protect environmental programs and specifically the Power Fund that the governor started when he took office? Are you going to be able to continue to fund that?

Oldson: Certainly I'm not sure that program like every other program out there won't take some sort of cut in it in the analysis but we see it as an important piece of our economic growth as well as our environmental movement to try to clean the waterways and so we will continue to try to keep focus on that.

Yepsen: Senator, the environment?

Dvorsky: It's the Office of Energy Independence that works with the Power Fund and one of the things they're going to be able to receive in the next few years is some federal money dealing with the energy efficiency and we may end up, in sort of an ironic thing here, they may end up with more staff there to administer that program.

Yepsen: We've only got a minute, who's going to howl when you're done? You're being very diplomatic here today, frankly, where everybody's going to take a cut. But who's really going to get stuck here in this, Senator?

Dvorsky: I think if we try and spread it out as much as possible I think hopefully a lot of agencies will take a moderate amount of cuts.

Yepsen: Same question to you, what agency or program do you think is really going to howl when this is all over?

Oldson: I'm not certain -- I think you're going to hear a tremendous groan in the end, not a howl, just a groan.

Glover: Senator Dvorsky, let me get you to offend your friends in Johnson County once again. Isn't, in fact, the regents a good place to go to do some budget cutting because they have got a built in source of money to replace any cuts they get in state funding, it's called student tuition?

Dvorsky: They do but then, of course, we want to make sure that everyone is eligible to attend a regents university. That is one of our core missions in education.

Glover: And where do we stand on that? Tuition has gone up fairly significantly.

Dvorsky: Not the last few years, we were able to put additional funding into the regents and it's probably the smallest rate of increase over the last two or three years. We've got a pretty good handle on that.

Glover: Representative Oldson, he won't offend his constituents, I'll give you a chance to do that. Isn't the regents a pretty inviting target?

Oldson: I'm not certain they're any more inviting than any other pot of money out there. But they are an important piece of our education system and we're going to try our best not to raise tuitions on people that want to get an education.

Yepsen: Won't you force tuition increases at community colleges and at state universities by this budget?

Oldson: That's an unknown at this point, quite frankly, David.

Dvorsky: It's possible.

Oldson: Anything's possible at this point but we're going to try our darndest not to.

Dvorsky: I welcome in the leadership of President Miles, the regents presidents have talked about taking either a pay freeze or a pay cut.

Borg: I have to interrupt, I don't know what you've done to relieve any anxiety but thanks so much for being with us. Today is Iowa Press' David Yepsen's final program. Friday was his last day at The Des Moines Register as he leaves for Carbondale, Illinois. He's going to be heading Southern Illinois University's prestigious Paul Simon Public Affairs Institute. For me, and I know I speak for Mike Glover and others here on our production staff, it's like a farewell to a family member. We've been a team, both here in the studio and elsewhere around the state, since the mid-1970s. David has been an integral part of our public affairs programming providing perspective and, as he did today, insightful questions. David, our thanks and best wishes go with you.

Yepsen: Thank you, Dean. We've had some good family feuds over the last 30 years. I want to thank you for that and I also want to thank the crew and the staff here at Iowa Public Television. They do a pretty good job of at least making us look good and I appreciate that from them.

Borg: Come back and see us.

Yepsen: I will.

Borg: That's Iowa Press for this final weekend in March. Back at the usual times next week, 7:30 Friday night and 11:30 Sunday morning, without David Yepsen. Thanks for joining us today.

Funding for Iowa Press was provided by Friends, the Iowa Public Television Foundation. The Iowa Bankers Association ... for personal, business and commercial needs Iowa banks help Iowans reach their financial goals. And by the Associated General Contractors of Iowa ... the public's partner in building Iowa's highway, bridge and municipal utility infrastructure. By Iowa's Private Colleges and Universities ... enrolling 25% of the total Iowa higher education enrollment and conferring 44% of the baccalaureate and 40% of the graduate degrees in the state. More information is available at The Iowa Hospital Association ... supporting the missions and visions of Iowa's 117 community hospitals. The Iowa Hospital Association ... we care about Iowa's health.

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