Changing expectations. Republicans, newly controlling Iowa's House of Representatives, are moving legislation dramatically changing both fiscal and social issues. We're getting a legislative progress report from Iowa House Speaker Kraig Paulsen on this edition of Iowa Press.
Borg: Iowa's General Assembly is about a month into the new session, there's been a bit of getting acquainted because republicans took control of the House with a 20 vote advantage after last November's election. With a similar switch in the governor's office from Governor Chet Culver, democrat, to republican Terry Branstad there is understandably a new political philosophy at the Statehouse. Democrats still control the Senate, but by only two votes. The political philosophical changes still emerging are most evident in money matters and social issues. As legislation moves to maturity we're expecting increasing republican-democratic clashes and those probably will come on the Governor's request for a two-year state budget rather than one and on the austerity of that budget, also on labor contracting and hot button social issues such as same-sex marriage, stem cell research and abortion. As republicans and democrats are adjusting to their new power structures, republican Kraig Paulsen is adjusting to his party's lead role as Speaker of the Iowa House of Representatives. Speaker Paulsen, welcome back to Iowa Press.
Paulsen: Thanks for having me.
Borg: And across the table reporters from the Statehouse, the AP's Mike Glover and Radio Iowa's Kay Henderson.
Glover: Speaker Paulsen, just this past week you released some spending targets, House republicans did and included in those spending targets you said that there's about $383 million that are available for various kinds of tax relief programs. You have identified about $47 million of that, that will be used to replace some property taxes because of the school formula. What are your other options?
Paulsen: Well, the other options we have, especially at this point in the session, if you can think of it I guess it is an option, we're going to look at income taxes, we're going to look at property taxes. I don't think there's any question that the House republican caucus is particularly interested in property taxes right now.
Glover: And what form could that take?
Paulsen: Well, for starters the first piece is going to be making sure we fund those things and fulfill those commitments we promised Iowans, in particular, through the K-12 foundation formula and make sure that we don’t under fund the state's commitment so that that ends up getting passed onto the property tax payer. That is a couple hundred million dollars right there. I think you're also seeing, I know the Ways and Means Committee is already beginning work on some sort of property tax reform, relief type of bill.
Glover: Do you have any idea how that's going to end up?
Paulsen: Not yet. That is an extremely complicated subject but I think, for the first time in my legislature, we may have it set up with the right combination to get something consequential done there. We've nibbled at the edges but we've never really done anything big. I think we might have a shot at doing something big.
Borg: Both commercial and residential property tax?
Paulsen: I think we're going to look at all classes.
Henderson: You did not mention the 20% across-the-board cut in individual income taxes which cleared committee earlier this month.
Paulsen: I think income taxes are definitely a part of the discussion.
Henderson: What about the casino tax increase that Governor Branstad proposed at the end of January which would raise the taxes on all state licensed casinos to 36%? That was coupled with a decrease in the state's corporate income tax. Will you do both of those things?
Paulsen: I'm not ready to commit to that today nor am I ready to say we won't do it. I will say that House republicans did not campaign on raising taxes. He proposed that in his budget, we don't actually have the bill yet so when we get that then we'll have a talk about it.
Glover: Is that included in your budget, your spending targets?
Paulsen: No, that is a ways and means issue, the spending targets came out of the appropriations committee and the budget works with it or without it.
Henderson: But what about the complaints that casinos are now raising that that would put them out of business, some of them out of business?
Paulsen: Well, that is one of the things we have to look at. We've had some conversations on that and obviously that would be a concern.
Henderson: Democrats in the Senate this past week advanced their own proposal that would target tax relief to low income Iowans. Where is this going to end up? If they propose things over in the Senate as democrats and republicans over in the House propose a series of tax reductions, is that just headed for stalemate or are democrats and republicans actually working together on these things?
Paulsen: You know, I think the truth is we don't know the answer to that just yet. The Senate has sent over two bills, we have sent over I think about 10 or 12 bills, they are going to pick up House File 45 next week, I don't remember the Senate File number but we're looking at those senate files and so we're starting that dialogue. I know Senator Gronstal and I talk a couple of times a week and I also know that both of us are encouraging our committee chairs to dialogue back and forth. So, we have to work through what does that dialogue look like and how do we work through that?
Henderson: Well, you mentioned House File 45, that is the first bill you passed which dealt with reserving money and using that money for property tax relief and other tax relief.
Paulsen: Correct. That was the Taxpayers First Act, it addressed the state budget and it also addressed some tax relief and we're looking forward to seeing what they send back. I haven't heard the details yet.
Borg: Kay mentioned low income Iowans. With the possibility, maybe it is already a foregone conclusion that state funded preschool is going away, what are you doing to protect those low income people that was promised in the way of vouchers or allowing them to continue with preschool with some sort of state support?
Paulsen: Well, I think that's another dialogue that is continuing to take place and the House is in one position and the Senate is in another and the Governor is in another. We're working and having those conversations. My expectation is that we'll see a proposal, a more detailed proposal from the Governor's office maybe as soon as next week and then we'll sit down and start working through that bill.
Borg: You mentioned that there are three different positions, can you state them out, the Governor's, the democrat's and the House?
Paulsen: Well, I mean, I think from the House perspective, first of all we didn't support it when it came up because there's many things that the state government is responsible for where we haven't adequately funded. We already talked about the property tax credits. We've got to figure out how to fund 47 troopers, Department of Corrections, in particular corrections officers is an issue, the list goes on and on, mental health. There's a host of different issues there. We don't understand why when we can't afford those fundamental, core responsibilities we're paying for preschool for families who can afford it on their own. So, we're kind of in that position. To the extent we do something we think it ought to be an organization that is focused and already designed to help families at a very core level, empowerment, for example. The Governor's office is obviously proposing some sort of voucher, modified voucher, I don't know exactly what that looks like yet, system and, of course, the Senate wants to defend the status quo. It's February 11th, we need to have the dialogue.
Glover: Well, we're having a dialogue on a couple of education issues, one of them the House has already dealt with and that would be basic state aid to elementary and secondary schools. You approved a measure that would allow zero percent allowable growth, Senate leaders say they are going to push through and pass a measure that will allow a two percent allowable growth, about an extra $65 million. How do you resolve that? Is one percent the solution there?
Paulsen: Again, we're working through on how we do resolve those disputes. We're actually pretty pleased and confident that we're going to be able to fund zero percent allowable growth and it is also one of the line items in the budget that we protected at status quo because most line items aren't going to be protected at status quo. We think one of the messages out of the election was that the electorate expects us to look at state government and find opportunities to do things differently, more efficiently, more transparently, so on and so forth and we don't think the education systems are an exception to that directive.
Glover: And the proposed budget for Iowa's Regents universities would see them get a cut. Do you expect students and parents to pay more tuition because of that?
Paulsen: No, I think the Regents have an unending list right now from where I can tell to be more efficient in their operations. Look, the last number I saw there are, for every two and a half students, there is an employee in the Regents institutions. I don't understand that at all, that is a remarkable ratio.
Glover: So, it's cuts?
Paulsen: I think they need to find more opportunities to run their operations in a more efficient fashion.
Borg: This last week, Kay, I think you mentioned too the Regents were saying you're protecting K-12 with no cuts, zero percent allowable growth, no increases but you are cutting the Regents and they say K-12 is getting a better deal.
Paulsen: K-12 is, if you look at the percentage, they're getting a better deal.
Henderson: A policy decision that is also a spending decision looms for legislators in that the Governor and his Department of Economic Development director have come up with a new mechanism for pursuing economic development at the state level, an authority that will go out and seek money from businesses to finance part of its operations. How do you get rid of the appearance of a conflict of interest if like the Road Runner's ACME Incorporated gives $20 million to this entity and then gets $20 million in a state grant?
Paulsen: That is -- we're going to have to work through. I think an open and transparent operation and making sure Iowans know what is going on there, making sure Iowans know what is going on with, in particular, the state dollars. Again, I think that just needs to be open. And the Road Runner ACME Corporation entertains me.
Glover: Isn't that a problem, though, because there is inherently, when you begin to put private money into a state program like economic development or a partnership for economic progress, whatever you call it, businesses are going to want to assume some anonymity. So, you're going to have money going in for government programs that we're not going to know much about.
Paulsen: We're going to have to figure out that balance, there's no question about that. And on this point what House republicans are, in particular, interested in, I have said this quite a bit and had this conversation, in particular, with the Governor, we're very interested in doing broad-based general business climate issues that make it a better climate for everyone rather than going out and simply picking winners and losers.
Glover: So, you don't want to do the details, you're willing to do the broad production and let them figure out details?
Paulsen: No, what I'm saying is that there's a whole lot of employers in Iowa, we appreciate them being here just as much and taking their resources to give to somebody else who may very well be a competitor, we think we're better off making sure that the general business climate and those employers in Iowa -- if we can get every small business in a position to hire just one employee in the next year we've taken care of half of our unemployment problem.
Borg: Speaker Paulsen, with the new census data just out in the last couple of days, does that make a stronger case for urban areas showing the population shift away from rural to urban areas, to revising distribution such as road use tax funds from rural areas into urban areas?
Paulsen: Well, that debate has been out there for years.
Borg: Yes, it has, but doesn't this add credence to the fact that urban areas should be getting more because that is where the people are?
Paulsen: We addressed that, what was it, three or four years ago, and we did make a change with regard to, and I won't remember the dollar amount, but once the road use tax fund hits a certain number then some of those ratios do change and it is based more on population and road use.
Glover: And in addition to all of the economic issues that we have talked about up until now you face some pretty important and volatile social issues. One of those social issues is same-sex marriage. The House has passed a resolution which would call for a statewide vote on amending the Constitution. You have yet another same-sex marriage bill which is now percolating through the House. Are we going to be debating same-sex marriage all session?
Paulsen: We sent over the resolution just like we said we would do so that Iowans can decide whether they want the law the way it was the day before the Varnum decision or the day after the Varnum decision. That is what we said we'd do and that is what we've done. I'm not sure what other bills you're talking about.
Glover: Well, the gay marriage is still being discussed at the Statehouse. Is it inevitable that that will be discussed this year and next heading into the election? What is the political fallout?
Paulsen: Well, the Senate is going to have to make a decision on that and my guess is that if they choose to keep kicking the can down the road they're going to be talking about it for the entire general assembly.
Glover: What is the fallout?
Paulsen: What is the fallout? You know, I don't know. Does some of the energy that was there in 2010 that was driven from this, does that remain or does it dissipate? That -- how does it impact all of those other pieces? I don't think we know the answer to that.
Glover: The effort to impeach four justices was a big news story at the beginning of the session, I haven't heard much about it lately, the effort to impeach the remaining four justices. Where does that stand?
Paulsen: Well, first of all, there was a lot of messages one could take out of the election. I don't think that one of the messages, at least I haven't heart this, is we fired these three, you go fire these four. And, you're right, I have not heard near as much dialogue on that. I have not read the articles, I haven't seen them. So, we'll see what happens but that is where I'm at right now.
Henderson: Another important social issue pending at the Statehouse is a bill dealing with late-term abortions. The four Catholic bishops from Iowa were at the Statehouse this week urging legislators to pass it saying it was a baby step but a step nonetheless. However, you have some key legislators who are among your fellow House republicans who don't want to do that, they want to ban all abortions. How are you being the moderator of this internal discussion?
Paulsen: Right now we're letting is percolate. Caucuses need to go through things sometimes.
Glover: Are you having fun, Speaker Paulsen?
Paulsen: I am having fun.
Henderson: Well, is this going to be resolved or is there going to be a stalemate?
Paulsen: I would expect us to address that before the first funnel. We're going to have to make a decision but right now let's let it percolate and let's have the discussion and the committee will make a decision and the caucus will make a decision.
Henderson: If that bill were not to move forward what would be your message to the pro-life community in Iowa?
Paulsen: My expectation is that we'll make a decision and something will move.
Glover: Some kind of abortion restriction bill will move however you don't know which ...
Paulsen: Yeah, I mean, having a doctor move into Iowa from Nebraska so that he can perform late-term, some would even say partial-birth abortions, I don't know exactly what his procedure is, is something we're going to address.
Borg: Another thing that came up this past week that has a lot of emotion is red light cameras in certain Iowa cities, Davenport, in fact, you're from Hiawatha but your neighboring city of Cedar Rapids has them. That was, do you think that red light cameras and banning is dead? But what about a cap on the fines?
Paulsen: In the House the discussion that is going on right now and it is taking place in the transportation committee is primarily focused on what sort of due process do people have? Are the fines reasonable? Is the method with which placement and notice to the citizens of Iowa, are all those things appropriate? That is the discussion. We had a discussion about banning them two years ago and the decision was made to let them occur. Now, we're kind of going back and seeing, okay, these communities have done it, does this serve Iowans correctly?
Borg: Would you support some action?
Paulsen: I'd support putting some boundaries around it.
Borg: Boundaries where?
Paulsen: I mean boundaries as far as making sure that when a citizen receives one of these tickets that it has been verified that it is all accurate and notarized, notarized is not the right word, but signed by an officer, those different types of things, make sure due process, they all have due process. We hear stories about maybe the computer is misreading a license plate and then when it passes in front of somebody's eyes maybe they aren't able to confirm that, we need to make sure people have appropriate due process.
Glover: We're going to switch topics again because there's way too many questions and way too little time -- but a consultant working for Governor Branstad has recommended significant changes in Chapter 20, the state's labor relations laws. Will you significantly overhaul Chapter 20?
Paulsen: Well, we're going to have a discussion about Chapter 20 and I think some of the Governor's proposals, at least my cursory look at them, those were some interesting ideas. I would expect the labor committee to address that. I know that Chair Horbach is looking at that and I'd anticipate you'll see a bill.
Glover: Are there things, just off the top of your head, that aren't going to happen on labor relations?
Paulsen: Well, I mean, obviously we're not going to get rid of Chapter 20, there's boundaries on that.
Henderson: So, you won't give people the right to strike?
Paulsen: There are some that are talking about that. My expectation would be the Senate would have a problem with that so I'm not sure that that's a worthwhile discussion.
Henderson: Why would this year be different from last year? Democrats were in charge and they had a series of labor related bills they wanted to advance and they didn't. Will this year turn out to be any different in that republicans have some bills they wish to advance and nothing will happen?
Paulsen: I'm not sure we've exactly figured out what the Senate, what they are thinking on some things. Obviously the Senate democrats are 26 and according to their rules Senator Gronstal has great power with regard to what comes up. But I'm not sure they're completely in alignment on what the caucus wants to do and how that relates when they line up with republican votes.
Henderson: There is another labor related issue that happens in, again, Cedar Rapids next to you in that Ron Corbett, the Mayor of Cedar Rapids, has signed project labor agreements with projects related to flood recovery in Cedar Rapids. Governor Branstad has signed an executive order which says state spending should not be used in context with projects that have these project labor agreements. How is that going to be resolved? Are you going to play mediator in that dispute?
Paulsen: I have not interjected myself into that yet.
Henderson: Well, go right ahead.
Paulsen: Clearly, I've been very clear, I think project labor agreements add to the cost of a project. History has shown us they also make the projects often times take longer. So, I'm not sure exactly what his motivation is. But I haven't talked to him and so he'll have to ...
Glover: It wouldn't be an official Iowa Press program if we didn't talk just a little bit about politics.
Paulsen: Of course not.
Glover: We've got an Iowa republican caucus campaign that is beginning to shape up. Ordinarily we would expect that that would be a pretty good thing for your party because you have a lot of big name politicians coming in, raising money, organizing on your behalf. It seems to have gotten off to a slow start, however. What is your take on that?
Paulsen: I think it's slower than some years in the past. I think that with, in particular, Mitt Romney and him coming in early and so hard four years ago and then not getting the outcome that he really wanted there's a little bit of tentativeness but there's clearly people coming into the state on a regular basis and so while maybe it is a little bit slower start I think you're going to see a lot of excitement. I agree, I think it is good for the party and quite frankly I think it's good for Iowa, I think it's good for Iowa on both sides.
Glover: How much will you benefit from it? Is it a financial benefit? An organizational benefit? Tell me what this campaign does for republicans.
Paulsen: I think it's hard to quantify until you get on the other end because you never know exactly what the year looks like but I think it benefits in all those ways.
Borg: Do you think the tentativeness and the slowness of candidates wanting to get in is a little bit of uncertainty about where Iowa republicans are right now?
Paulsen: I think there is also a little bit of that but I would actually say it's a little bit of uncertainty of where the national electorate is. They sent a very strong message that we don't want status quo government but I think there's still a little bit of what exactly does that mean and especially at the national level I think some of those folks are working through those things.
Glover: Someone suggested a part of the slow start is because the Republican Party in the state has become so conservative that a presidential candidate with any hint of moderation probably would find an excuse to skip over Iowa. Is there anything to that?
Paulsen: Oh, I think probably that is overstated.
Glover: How so?
Paulsen: I just -- there's no question that I think the electorate in general and the republican party in part have moved to the right as far as the conservative, liberal type spectrum but I think it actually has more to do with looking back in what is the right strategy to get to the victory more so than what, you know, the analysis that you mentioned.
Borg: But you don't think it is spooking potential candidates?
Paulsen: No, I don't.
Henderson: There is a bill percolating, your word, on the House side and a bill that is very much similar on the Senate side that seeks to make changes in Iowa's popular bottle bill. I've been around the Statehouse a while and I have seen legislators try and fail again and again to make changes or even get rid of this legislation. Do you think that now is a time for that discussion?
Paulsen: I do think now is the time for that discussion. We've got a pretty robust recycling system, in particular, curb side recycling that is virtually statewide, not completely statewide. I think the bottle bill has served the state exceedingly well but there is also something to taking what is arguably the most valuable component, aluminum in this case, out of the recycling stream and running it through an alternative stream. So, maybe we can strengthen our recycling system by putting that back into the system.
Henderson: One of the problems that legislators have run into in the past is that there hasn't been recycling available for rural Iowans. Is that the case?
Paulsen: From my conversations with some of the rural legislators that is getting more robust in the rural area so, again, let's have the conversation and see if we can actually strengthen recycling in Iowa by addressing this issue.
Glover: There has been a lot of discussion at the Statehouse in recent weeks and a lot of meetings with republicans about business regulations, the buzz among republicans is that business regulations are overly tight, they are forcing people out of business, they are making it difficult to create jobs. What regulations and specifics do you see causing problems for businesses and how do you deal with it?
Paulsen: Well, I mean, the truth of the matter is we need those ideas from Iowans. We don't know all the specifics. There are some ones in general, I mean, there's no question that I thought, and I've been very public, that I think the previous Department of Natural Resources administration has just flat out run jobs out of the state through some of their regulatory decision-making process. Tell us what those are so we can address those either by maybe they can be addressed purely in the executive branch, maybe they need something through the administrative rules review committee or maybe we need some legislation. But state government, I think, has not had a helpful focus when it comes to job creation and I think that has changed dramatically in the last month.
Glover: What do you say to people like Mike Gronstal who say I'm all for eliminating regulations that don't make sense but let's not tamper with regulations that actually protect people? How do you draw that line?
Paulsen: I think the first step in that process is hearing from Iowans which is exactly what we're doing. The administrative rules review committee is doing a 10 city tour across the state. That is an idea they came up with, I think it is a fabulous idea and they're going to go out and they're going to hear from Iowans and hear where is the state of Iowa getting in your way in a manner that really doesn't benefit anybody? Tell us what those are so we can address them.
Henderson: At the beginning of the program Dean mentioned an issue that we haven't yet raised, stem cell research. Is that going to be addressed by House republicans?
Paulsen: Actually I don't even know if a bill is filed right now. We have not had that discussion. What we're talking about is those things we said we'd do and right now we're focused obviously on the budget, we released our targets, we passed House File 45, we're trying to figure out what the state can do to reinforce the economy. That is where the bulk of our time is being spent right now.
Borg: Just about ten seconds left. Are you satisfied with the progress of this session so far?
Borg: And you're going to adjourn in mid-April?
Paulsen: You know, that would be the plan. We'll see how it goes.
Borg: We'll have you back before then. Thanks so much for spending time with us today. We'll be back with another Iowa Press edition next weekend at the usual times, 7:30 Friday night and 11:30 Sunday morning. I'm Dean Borg. Thanks for joining us today.