Mighty majority. Iowa Senate democrats digging in their heels as Iowa Statehouse republicans, flexing new power, begin moving their priorities. Council Bluffs Senator Mike Gronstal leads the Senate's democratic majority and we're questioning him on this edition of Iowa Press.
Borg: Governor Terry Branstad delivered his budget address this past Thursday promising to clean up what he called a budgetary mess chiding the past democratic administration without mentioning names or political party. But democrats hearing the message loud and clear didn't have much, if anything, good to say about that austere budget. The Iowa Senate's democratic majority is also wary of a number of controversial social issues moving in the republican controlled House of Representatives. Some observers are saying political gridlock is taking shape. We're exploring the issues with the leader of the Senate's democratic majority, Council Bluffs' Mike Gronstal. Senator Gronstal, welcome back to Iowa Press.
Gronstal: Happy to be here.
Borg: And across the Iowa Press table, Associated Press Senior Political Writer Mike Glover and Radio Iowa News Director Kay Henderson.
Glover: Senator Gronstal, the judicial nominating commission has just sent the Governor a list of nine names potentially to fill the three vacancies on the Iowa Supreme Court. Is that judicial selection system working?
Gronstal: I think it's working just fine. I think it has worked very well in Iowa. If you look at independent measures, people like the U.S. Chamber of Commerce says Iowa has an excellent court system and they laud the competence of judges in Iowa and say it is a very fair process in this state. So, they rate Iowa, from a business perspective, as third or fourth best in the country in terms of the qualifications of our judges.
Glover: And moving forward, will that system continue as it is? Or was there a fundamental sort of shift, geological shift in the last election?
Gronstal: I've been around a long time, as you know, and I remember when democrats complained about the process back in the 80s and said, gee, we're not sure there aren't too many republicans on those judicial nominating commissions. We weathered through that in the 80s. I think we will weather through this in the 2000s. So, I don't see changes coming in that area.
Henderson: One reason there are three vacancies on the Iowa Supreme Court is that voters, many of whom were reacting to the court's 2009 ruling on same-sex marriage, voted three members off the court. This past week there was a scuffle over rules in the Iowa Senate but at the heart of that was the gay marriage issue. You've been accused of being a dictator and running the Senate like monarchy. Are you guilty as charged?
Gronstal: My wife says if I'm a dictator she's going to get a heck of a lot more shoes. Listen, I was elected, I've been elected I can't even count the number of times from my district. Is this my sixth or seventh -- this is my seventh term in the Iowa Senate and I had one term in the House, that is not exactly a dictator that gets elected by the people in this district. So, I've campaigned repeatedly in my district, I get elected and then I get elected by my fellow members to be the majority leader.
Glover: But gay marriage opponents are going to find some way to bring this up every week and every time you have to fight it, block it, you spend a little political capital. How much political capital are you willing to spend? And how much political capital are you willing to ask your members to spend?
Gronstal: I don't give up what I believe in.
Glover: But what if it means you don't get elected or you go into a minority?
Gronstal: I accept that. I accept every vote I take up in that chamber can result in my defeat in the next election. It can result in a defeat by my fellow members to be their leader. I accept that reality. I think you've got to stand for something in politics and putting discrimination -- if I can vote to take away your rights by majority vote of the people of Iowa then I can vote to take away anybody's rights and maybe today one group feels like, well, we're the majority. Well, tomorrow they very well may be the minority. So, you know, what I tell people is, yeah, I worry about politics, I campaign hard to win my seat in Council Bluffs, I worry about that but I also shave every morning and I have to be able to look myself in the eye.
Glover: So, you're willing to accept the possibility of going to the minority?
Gronstal: Of course, I'm willing to accept the possibility of me losing and everybody else, these are 50 senate districts, everybody else has got to make their calculation as to how they win their races, how they campaign, everybody else has got to make that measure. This particular election, across the country, this was a nationalized election and it was more about Washington, D.C. than it was about Iowa. So, we're going to go through these campaigns and a year from now we're going to start the campaigns, I'm not interested in campaigning right now. I'm interested in governing and governing well and we're going to work with the new Governor and with the republican House and try to govern well.
Henderson: How intense is the pressure on Senate democrats? This past week you accused opponents of what you're trying to do in the Senate of lying which seemed an extraordinary step to take, to accuse your political opponents of lying.
Gronstal: No, I did not make any comment about any senator.
Henderson: I said your political opponents.
Gronstal: I said there will be people that will characterize a vote on the rules as a vote on something else and it was not a vote on something else, it was a vote on the rules, it was a vote on the traditions, the written rules and unwritten rules of the Senate that goes back for decades. That is what the vote was yesterday.
Henderson: Dean mentioned social issues at the beginning of the program. There is a Nebraska doctor who has talked about opening a clinic in Council Bluffs in order to perform so-called late-term abortions. There is a bill sort of moving in the House but not really. If such a bill were to pass that is similar to the law in Nebraska would you bring it up for debate?
Gronstal: I think it will get a fair hearing in the Iowa Senate committee that it goes to. I don't know whether it will come out or not. I don't determine that, the committee chairs do. So, we'll see what happens if the House actually moves something.
Glover: You wouldn't take the same position you do in same-sex marriage where you'll prevent it from being debated?
Gronstal: I don't take that position very often except on very, very important issues.
Borg: Another of the major issues coming before the legislature this week was Governor Terry Branstad's much anticipated budget message and it was stern.
2011 Budget Address - Governor Terry Branstad: Today I stand before you to present the state's budget for the next two years. But at the risk of sounding a bit like the grandfather that I am now I think we need to start with a stern talking to.
2011 Budget Address -- Governor Terry Branstad: With this budget we have a choice. Do we take the bold and difficult steps, make the painful decisions and honestly align our spending with our revenue? Or do we kick the problem down the road yet again. Fellow Iowans, I didn't come here to avoid the tough decisions. No more games, no more gimmicks, no more bailouts.
Borg: All of us around the table here were there in the chamber for that speech. Mike, does it raise some questions?
Glover: It raised the question to me, Senator Gronstal, what gimmicks and bailouts is he talking about?
Gronstal: Well, first of all, I don't know what the bailout is we did other than perhaps helping some flood ravaged communities deal with stunning challenges in the fifth worst, fourth worst natural disaster in our state's history and in the country's history. So, I don't -- bailout -- he needed three things, you know, so he had to say no gimmicks and so they threw in bailouts because I'm sure it polls well relative to Washington, D.C. but I can't think of any bailouts we did in the last couple of years. So, this was a very political speech and it is governor Branstad's job, politically speaking, to describe things as horrible. That way if the reality is less than horrible, if the reality, just the fair, honest reality is less than horrible he can take credit for making it less than horrible. So, he's describing this, he's describing our economic circumstance -- we've got more money in the bank than he ever had when he was governor before, ever in the history of the state. We're going to have over $900 million on July 1st. He can't say that about any of the sixteen years he was governor. So, his jobs is set the stage, describe it as incredibly bad, I'm sure he'll take credit for the unemployment rate dropping from 6.6% to 6.3% even though he had nothing to do with it. And I get that, half of politics is taking credit for things you had nothing to do with.
Glover: And he said there is, in the current budget, which you approved last year, he says there is $770 million in one-time money, mainly federal stimulus money that is being spent to pay for ongoing programs. Is there anything to that?
Gronstal: Of course there's something to that. That's what the federal government said. They said, we want to give you some money but here's what we want you to do, we want you to make sure you're not going to lay off thousands of teachers in your state, we want you to make sure that you're not going to add to the unemployment lines with state government workers, they said, spend this money, it is one-time money, spend it to keep unemployment from going higher in your state. That was the condition under which the federal government gave us those resources. So, yes, we have some one-time -- I can quibble with his numbers, I think his numbers are exaggerated -- but we do have significant one-times monies in this budget. But, look, we also have significant, dramatic new revenues that weren't there a year ago. We have, will have $900 million in the bank on July 1st. That is pretty significant and it's bigger than he ever had while he was governor.
Henderson: Also included ...
Gronstal: I'm sorry.
Borg: Go ahead, Senator.
Gronstal: Well, I've also got to tell you, in that speech he talked about, he talked about zero assistance to local schools. He talked about, for the first time in the history of this state's school finance formula, of zero new dollars for schools. That means we're going to be laying teachers off across this state and I don't think Iowans wanted to elect a governor that was going to abandon Iowa's traditional -- since 1974 we have never had zero, we have always had something, a few times it has been as low as 1% but we have never had zero allowable growth before.
Henderson: The Governor also recommended spending a bit more in the current year's budget. On his way out, Governor Chet Culver ordered about $84 million in cuts to the current year's budget and there was talk of layoffs and those sorts of things. Will legislators easily spend more money for the current year?
Gronstal: Well, I think we'll have some discussions about which of those expenditures need to be made. I think we'll have some very serious discussions on that and be very, very frugal about what we give departments. For instance, we don't want to endanger prison guards or security in our prisons so we don't want bad people to be escaping from our prisons or bad people in our prisons taking some of our workers hostage, those kinds of things. So, we're going to make sure there's still security were we need to have security.
Borg: Do you envision state worker layoffs, is that something that you are taking as a given?
Gronstal: It depends on where we end up with on this budget. But, yeah, I think there will be some and I think the Governor is right that it makes some sense not to hire back as many people as we could under the current scenario. And we anticipated that last year. Remember, when we passed the government reorganization bill last year we knew we'd have to come in and make some adjustments this year. We said that out loud, we didn't kind of hide that. We also had this set of funds like centralized purchasing, reduction of middle-level management, we had this set of things and we asked our Department of Management to figure out how to spread that across the various departments in state government. That is what Governor Culver did as he exited, he spread those savings, and we instructed him to do that. But, at the same time, we said to people, we said out loud to people, we'll have to make some adjustments next year because all of those savings may or may not materialize. So, we're open to making, to looking at a supplemental appropriation.
Glover: Another thing that was included in Governor Branstad's budget was no money for pay increases for state workers. A contract that the unions negotiated with outgoing Governor Culver call for about $103 million in additional pay and benefits and so forth for the first year. Can he, in essence, void a contract that has been negotiated with those unions?
Gronstal: It doesn't void the contract, we went through this with the Governor when he attempted to set aside a contract back in 1991 and lost 9-0 in the Supreme Court. It doesn't void the contract. The contract goes forward. Nothing in the contract requires him to keep all of the employees that are in state government. So, he can adjust, through layoffs, the cost of this. I think that is, in essence, what he proposes to do, not have a salary bill, not a bill that funds salaries and tell departments to absorb the increased costs inside their budget.
Glover: So, he is, in essence, telling state agencies, this is the amount of money you're going to have, if that means that you can give some workers a pay increase and lay off some that is up to you?
Gronstal: No, I think he has to -- they have to give people the bargained pay increases. They don't have to keep all of those people employed.
Henderson: Over the past few years democrats have advanced ideas for changing Iowa's labor law. For instance, allowing people to select the doctor they go to after they are injured on the job. Now republicans propose a series of changes in Iowa labor laws. Will those happen?
Gronstal: We're certainly open to having some discussions on what it is they want to talk about in that world but I think it is unlikely we're going to be thrilled with the idea of effectively repealing collective bargaining law and if you actually have a mechanism where the governor or the legislature can say, I know you went through binding arbitration but we're going to ignore that. I don't think -- I think that effectively means you don't have a collective bargaining law and that's certainly what some people would advocate in this state but probably not us.
Henderson: And so you would go back to days when public workers had the right to strike?
Gronstal: That is not implicit in anything I've seen them put together. I've read through the Governor's consultant's report on this and it does not give them the right to strike. But he says instead of the right to strike we'll continue to have binding arbitration, it's just if the Governor wants to he can say we can't afford that, it doesn't count. So, how does that work, I mean, it's really repeal of collective bargaining.
Glover: But Senator, let's get back to the basic, fundamental deal that was struck when the collective bargaining law was approved by a republican legislature.
Gronstal: It was a republican legislature and a republican governor that signed it.
Glover: And the basic deal that was struck was we will give up our right to strike and we'll agree to abide by binding arbitration. If that goes away the law is gone.
Gronstal: It's not gone, the law is still on the books. They don't propose to repeal Chapter 20. The republicans do not -- at least I haven't seen that yet, maybe they'll get to that point. But they propose to change it, change what the arbitrator can consider and make binding arbitration able to be set aside by the executive branch or by the legislature.
Glover: Binding arbitration becomes advisory arbitration.
Gronstal: Effectively, but they don't propose -- but this language doesn't say, oh and by the way, we will now let you strike. So, they're still prohibited from striking.
Borg: Senator Gronstal, you mentioned earlier school districts. What would you advise school districts right now going into negotiations with teachers, facing the prospect of two years if Governor Branstad's budget is adopted no allowable growth in the next two years, no new money and the fact that they may be losing some preschool funding that they are having now? What would you advise school districts in this very crucial months if the legislature is meeting?
Gronstal: I would advise school districts, school personnel, parents, school board members, school superintendents to work with the legislature and help us do more than zero for K-12 education. This is unprecedented. Iowa has had a long commitment to education, K-12 education across this state and this is absolutely unprecedented. Since 1974 they have never been zero.
Borg: But it may happen.
Gronstal: It is incredibly, I think it is incredibly misguided and I think it squanders the opportunity for a half million kids' future in the state of Iowa.
Glover: And the only other alternative, if he's successful in getting zero allowable growth for the next two years and you can't push it through, you're going to have difficulty pushing it through a republican House ...
Gronstal: With all due respect from what planet do you have to be from to think, I'm going to go along with zero for two years? I know he can veto anything we get through the legislature for one year but he also can't make us pass something for two years.
Glover: Well, if that happens, if he does the veto or however it plays out, isn't the only other option for local school districts increasing the local property taxes?
Gronstal: There's certainly a significant property tax impact by the Governor making the choice to provide zero allowable growth.
Borg: A state budget contains not only proposals for how tax money is spent but it is balanced with proposals for collecting that revenue. We have a couple of video clips with Governor Branstad addressing that subject. The first is when he first took office 28 years ago and then when he spoke this past week.
1983 Budget Address - Governor Terry Branstad: This message comes in the midst of the most difficult economic time in our country since the Great Depression. This administration will squarely meet the needs of Iowa's people. So, I ask you, democrats and republicans to stand with me and support a one cent increase in Iowa's sales and use tax.
2011 Budget Address - Governor Terry Branstad: The small business income tax rate will be cut in half to a flat six percent, commercial property taxes reduced by 40% over the next five years. New investments will immediately be taxed at only 60% of their valuation and existing property will be rolled back 8% a year over five years. My plan includes funding for these tax cuts through the use of new revenue coming into the state due to economic growth, the additional revenue generated by the extension of the Bush tax credit, of the Bush tax cuts and by a restoration of the gaming tax to the level at which it was originally agreed to years ago.
Borg: Okay, there are the revenue adjustments.
Henderson: The Governor is calling for raising the tax on casinos to 36%. Will that happen?
Gronstal: Well, think about the differential impact of that. It takes $65 million out of Council Bluffs, $65 million, one-third of those revenues come from our community and uses it to spread tax benefits to a whole bunch of businesses in eastern Iowa. Does that make a lot of sense? It doesn't make a lot of sense to me. So, I think -- I would also say not one of us ran on raising taxes, not one of us ran on raising taxes. I'm actually pretty surprised the Governor -- we all remember that from 1983 when I was there at his speech, he came into the governorship and I came into the House and he proposed a sales tax increased that worked out to about $300 million and yesterday he proposed about $200 million in taxes.
Borg: But it's not a tax on you and me, it is a tax on casinos.
Gronstal: Well, he didn't buy that when Culver said that about the I-jobs bonds, he rejected that argument when Culver said, hey, it's not a tax that any Iowans have to pay, he rejected that, he said it is too a tax when Culver was talking about the mechanism to pay the I-jobs bonds. I mean, he's also got a somewhat faulty memory. The tracks agreed to a 36% tax and the riverboats were at 20%. So, it's not what was agreed to in the original legislation but they have got faulty memory about lots of things from back then. His people have been alleging that they had bi-annual budgets when they started but there haven't been bi-annual budgets since early in the Ray administration.
Glover: It strikes me as politically he's got you in something of a box. It's about $190 million and if you don't pass that you're going to have to come up with $190 million somewhere else. But there are a couple of other proposals he's got. One, he wants to cut the corporate income tax in half. And two, he wants to do significant improvement in commercial property taxes. How do you --
Gronstal: Let me say on the commercial property taxes we're going to work together, we're going to find common ground, commercial property taxes are too high in this state. But a mechanism that doesn't replace the lost revenue to local governments means it is a tax shift, not a tax cut. Move the taxes away from the corporations and to homeowners and agriculture. We're not going down the road of a tax shift so we're going to work with him and try to come up with a mechanism that significantly relieves commercial property taxes. We will work on that. Think about his corporate income tax proposal -- his corporate income tax proposal says, hey, if you're a small business, tough, you're already at 6%, he is only cutting taxes for big corporations in Iowa. I think democrats -- I think the public at large is tired if taking care of Wall Street companies and we're more interested in Main Street companies and most Main Street companies wouldn't get a nickel out of his corporate income tax cut.
Glover: But he made the case in the last campaign and apparently convinced voters. Have you made your case?
Gronstal: He didn't say, he did not say I'm going to cut taxes for the big guys and leave all the little guys on the hook. I don't think Iowans voted for that.
Henderson: Another tax proposal that is percolating through the House, republicans intend to try to cut the individual income tax by 20%. If that gets to the Senate will senators vote for it?
Gronstal: Obviously we all have to work together to come up with a balanced budget and if people want to pass symbols, we can pass some symbols too. We can increased the earned income tax -- there is a host of things we can do. We need to take into account our revenues, our expenditures, the things we think are important to Iowa, we think preschool is important, we think access to healthcare is important, we think our job creation efforts are important. And so we're not interested in cutting those things and so we've got to be responsible, fiscally responsible, look at both sides of the ledger and figure out what we can afford.
Borg: Thank you, Senator Gronstal, we're out of time. On our next edition of Iowa Press we're focusing on federal issues with Iowa Senator Tom Harkin. He chairs the Senate's health, education, labor and pensions committee and staunchly defending also the nation's new health reform law against efforts to repeal or chip away at its provisions. You'll see Senator Harkin at the usual Iowa Press times, 7:30 Friday night and 11:30 Sunday morning next week. And a reminder that the Internet is your connection to our Iowa Press staff. The address is listed below, it is firstname.lastname@example.org. We'd really like to hear your comments. I'm Dean Borg. Thanks for joining us today.