Counterpoint strategy. Minority party voices providing opposing views and sometimes essential votes. We're questioning state legislators, Senator Republican Bill Dix and Democratic Representative Mark Smith on this edition of Iowa Press.

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For decades Iowa Press has brought you politicians and newsmakers from across Iowa and beyond. Now celebrating more than 40 years of broadcast excellence on statewide Iowa Public Television, this is the Friday, February 19 edition of Iowa Press. Here is Dean Borg.

Borg: In the legislative process it is under stably more enjoyable to be on the winning side. Even so, minority viewpoints are useful in voicing counterpoints, refining legislation that might otherwise sail through on a majority wave. On the other hand, without compromise, split control, such as in Iowa's legislature, tempts gridlock. In the state Senate with democrats holding 26 seats, Shell Rock Republican Bill Dix leads the 24 minority republicans. And across that rotunda, with republicans holding 57 of the 100-seat House of Representatives, Marshalltown's Mark Smith leads the 43 minority democrats. Gentlemen, welcome back to Iowa Press.

Dix: Good afternoon.

Smith: Thank you. Nice to be here.

Borg: Across the table, two people that you work with daily up at the Statehouse, James Lynch who writes for the Gazette published in Cedar Rapids and Radio Iowa's News Director Kay Henderson.

Henderson: Gentlemen, speaking of gridlock, on January 11th the legislature began and leaders of both parties were saying, we're going to make this decision about school funding early in the session. It seems more likely that it will happen on June 30th than on February 29th this year. Senator Dix, what can you tell Iowa schools who are trying to plan?

Dix: I think the expectation should remain, we should get this resolved as quick as possible. I don't see any reason why it cannot. And just make sure that we put a number in place that schools can count on and know that the dollars will be there, not like some previous legislatures have done and set a number too high that couldn't be sustained, but a number that can be sustained and one that fits within our budget and doesn't overspend.

Henderson: The republicans in the House have proposed a 2% general increase. The Governor has proposed a general increase of 2.45%. Which would you favor?

Dix: The democrats try to have it both ways in the Iowa Senate. They have proposed $160 million of new dollars going into K-12. They also plan on $100 million of savings from Medicaid, which puts them way over the $150 million of increased revenue coming to the state. So we really need to keep in mind the taxpayers of Iowa have limitations and they expect us to put a number in place that doesn't overspend, that the schools can count on.

Henderson: So what number would you favor?

Dix: Well we've supported so far the number that has come out of the House.  That is a number that clearly can fit but we can continue to have conversations about how we fit that together as we work through the process with the Senate and the Governor.

Borg: Just before we move on, Kay, help viewers -- how does what the House favors them compare with what the Governor recommends and what the Senate wants?

Dix: I believe that we're very close to the same page. You need to look at the bottom line, which there's about $150 million of increased revenue coming into the state. The House proposal builds in about $140 million additional revenue going to K-12 schools. That is well over 90% of the growth and anticipated revenues and leaves that additional dollars for the rest of state government.

Henderson: Representative Smith, what is the view of House democrats on this unfolding drama that seems to be sort of a sequel to what we've seen the past several years?

Smith: Kay, let's go back to your original question, which was about January 11th there was talk about doing this early in the session. Let's keep in mind that that's one year late, that the law is that this be set for the subsequent year in the first 30 days of the session. That was not done by the House republicans in 2014 and again they have passed the deadline, excuse me in '15 they did not follow the deadline, nor have they in the last six years. And so that deadline this year for FY18 was on the 11th of February, again it was not followed. So this is an issue that should have been resolved last year for FY17, wasn't resolved, still isn't resolved for '18.

Henderson: So what is your advice to school officials who are trying to negotiate contracts with teachers and are trying to have a budget certified in a couple of weeks?

Smith: Put the heat on the legislature to follow the law that has been established for completion of that.

Henderson: That's a moot point at this point. What is your advice to them in regards to how much new money they may get for the budgeting year that starts on July 1st?

Smith: Well, unfortunately we have put them in a horrible position. We have Davenport schools looking at breaking the law so that they can go into reserves. We have 76% of the school districts in Iowa raising property taxes, which is a regressive tax and one that the legislature is forcing them to rely on. So these are the options that they are exercising.

Dix: Let's keep in mind that the House has already approved $140 million of increased revenue going to the schools. Clearly they can build their budgets on that and if the legislature, in its work to bring bipartisan agreement on this is a higher number, then they can put that in later on.

Lynch: Let's move on but stick with the budget. School funding is just one slice of what you sometimes refer to as the budget pie. And you don't even agree on how big that pie is. Yesterday Pat Grassley, the Chairman of the House Appropriations Committee said there's $7.4 billion available total revenue. Is that the number democrats are using? Are you comfortable with that and working off that number?

Smith: No.

Lynch: Why not?

Smith: Well, again, what was established in the early '90s was the 99% spending limitation and the outline for that. What we've seen when the republicans took over the House in 2011, they started putting forth these proposals for budgeting principles that are different from the 99% spending limitation and in 2015 added a new one which relates to the ending balance. So there is this disagreement then between the House and the Senate and it is a new disagreement on the available revenue based on the carry forward monies and whether those are counted or not.

Lynch: So how much money is available?

Smith: The money that is available is about $7.1 billion.

Lynch: Okay, so you're looking at a smaller number than what he threw out yesterday?

Smith: I'm sorry, I don't know what number he threw out yesterday.

Lynch: He threw out I think it was $7.4 billion total revenue.

Smith: Okay. That's the number then. Sorry.

Lynch: Senator Dix, how do you respond to that, that you're changing the rules of the game? You’re going back tom 99% down to I think spending around 95% or 93% of available revenue. Why change the rules?

Dix: I think it's important for Iowans to understand that the rules that you're referring to would allow for one-time money, the overpayment of tax that has occurred in the previous year, to be used for ongoing expenses. And that is something that history has told us that you get into trouble and you're not able to meet your obligations and keep the promises that we have made. So it really makes sense to just look at the amount of new dollars that are coming into the state on an ongoing basis to budget from. Look, the Senate democrats, the other thing that I have come to realize is that they always are going to propose overspending. It is what they have done in the past and they have an insatiable appetite for Iowa taxpayer money. It's part of their ongoing policies that they have had.

Lynch: Representative Smith?

Smith: Both political parties in Iowa have to balance a budget. The Senate republicans have always, or Senate democrats have always balanced the budget here in Iowa and will continue to do so with their projections.

Borg: Jim, from what you're hearing, is there still a difference? Because nobody agrees how much money is available.

Lynch: There doesn't seem to be agreement on how much money there is to spend and how much should be spent. That is where the big disagreement is. The democrats are comfortable with 99% and republicans have kind of walked that back every year to spend a smaller percentage of the budget, of the available revenue.

Dix: Let's just remember though it's the ongoing revenue. To use one-time dollars for ongoing programs is like using your credit card to pay for food every week. And people just know that that doesn't make good sense.

Henderson: So why did the Governor then side with Senate democrats?

Smith: Has the highest number of the three budgets, the Governor's budget number is the highest number.

Henderson: Speaking of Terry Branstad, he sort of made waves, if you will, in December before the legislature started by proposing that a tax that already exists, a tax that raises money for school infrastructure, it's a one cent sales tax that is collected throughout the state of Iowa, be continued. It was set to expire in 2029. And the inflationary growth in that tax collection would be used for water quality. Senator Dix, as a republican, are you comfortable, number one, with extending a tax that was set to expire?

Dix: Well, Kay, I'm a farmer and I think a lot of this whole discussion on water quality is stemmed from the Des Moines Water Works and the suit that they have brought against three counties here in Iowa. And as a farmer who recognizes how important it is that we have clean water and also to keep those nutrients where they can do the most good makes all the business sense for me. I'm investing voluntarily in cover crops and a lot of initiatives to hopefully keep that in place. And over the last several years, we in state government have done, we put several proposals forward to try to support and enhance those voluntary efforts of farmers. We need to continue that. But this is also a proposal that I think deserves merit of discussion in the legislature. The Governor has put forward a framework for us to look at to provide long-term funding for those efforts and we should look at what the process brings forward and give consideration to that.

Henderson: Do you have alternative ideas?

Dix: There's always alternatives and we have found those resources in the past, RIF dollars have been used --

Henderson: Which would be dollars that are collected from gambling taxes.

Dix: Exactly.

Henderson: Representative Smith, is this the appropriate source of money for water quality?

Smith: No. First of all, let's take a look at this, that these saved dollars for our schools were put into place by votes in local districts with the intent that they would be used for school infrastructure and for technology. After these monies were put in at the local level then we made them statewide and with the intent that they would be used for those purposes.

Borg: What is being asked is, what the Governor is asking, and as Kay has enunciated correctly, that it's the inflationary part that would be used for water quality.

Smith: Correct. However, that inflationary part, all of the parts of these monies were put forth, and the legislation when we made this statewide included intent language that they would be used for school infrastructure and for technology. So we're going against what the voters want with these monies. Second of all, we need those monies to be continued in our school process here. There are other avenues, existing avenues in state government to fund water quality. It's an important issue. It should be addressed. Senator Dix talked about REAP. There have been monies that have been put in, only two years ago we put about $16 million into water quality that was vetoed by the Governor. So there are mechanisms, there also can be expansion of programs we have in Iowa so that we can draw down monies from the USDA and address this issue without having it against our schools.

Henderson: For viewers who aren't up to all the acronyms, REAP stands for Resource Enhancement and Protection and that is just general tax money, it's not a special fund that exists. So do you both think that you need to have a two-thirds vote in both the Senate and the House to make a change here?

Smith: I believe so.

Henderson: Do you believe that, Senator Dix?

Dix: I'm not certain. I think that's something we need to continue to research. But let's just remember I think the Governor has put forward a proposal that really highlights that this is an Iowa problem and we need to look at it as such. Let's not point fingers at who is responsible and who is the cause. Let's figure it out because we all benefit by having clean water.

Lynch: Another potential problem is that the legislature again this year is not planning a salary bill to cover raises for state employees that have been negotiated between the state and the employee's union. Are we looking at furloughs down the road, employees being laid off temporarily, temporary disruption of services in Iowa? Are we facing that again, Representative Smith?

Smith: Well, clearly it's difficult when the salary bills do not occur and they have not occurred, I believe if this happens this legislature again, for six years that we have not done that. And so the budgets that the agencies have to operate on have to eat that and so invariably that has resulted over the last five years of fewer employees in a lot of key areas.

Lynch: Senator Dix, should there be a salary bill? Does this make any sense not to cover those raises that are negotiated in good faith?

Dix: Well, bottom line those raises are going to be compensated within the budgets that we approve every year. What I think is important is that we recognize in state government that we can't continue to do business the way that we have. We have to continue to challenge ourselves to provide the services that Iowans expect without continuing to put more dollars in. That is what we have to do in our family budgets every year and state government should be no different.

Lynch: Are you sort of passing the buck though not making a decision to downsize government, you're passing that onto department heads who have to make those decisions about whether they fill vacancies, whether they lay people off?

Dix: All of us in our families, in our small businesses, we have to make choices on how to make things work. And I believe that that is what our department heads are put in place there, when the legislature established what those budgets are, they have those dollars to deal with and who better to decide how to best utilize them.

Borg: Senator Dix, I'm going to ask both of you, is James' question then that there may be some downsizing within the state departments, and there could be some furloughs or layoffs?

Dix: I think, again, those are decisions that the departments can decide.

Borg: Yes, but do you expect that?

Dix: I don't know that there necessarily has to be an expectation of that. You can find a way to provide an increase into efficiencies, just because a small business has less revenue to deal with doesn't mean that they're going to lay off people, it means they're going to find a better way to get the services out to the people.

Borg: Representative Smith?

Smith: I think it's possible that that indeed can occur. What we have seen so far is that departments have attempted to not fill positions, leaving those unfilled and service needs unmet in Iowa and whether they can continue to address the issue, the shortfall that way is a question.

Borg: Senator Dix, just personal, that is not personal me, but personal taxpayers, they're wondering, some of these people who are working especially in minimum wage or low wage jobs, whether or not there's going to be an increase in the overall state minimum wage.

Dix: Well, I think we can have that discussion about the state's minimum wage. But let's be honest, it is a topic and discussion and that we've had for literally decades. And how has it actually improved the standard of living of Iowans? Where we'd like to go really is in policies that hold the promise of increasing growth in our state and new careers that pay Iowans well.

Borg: I'm not advocating for it, I'm just saying that you look in the eastern side of the state, Johnson County in the county has already passed an increase in the minimum wage, Linn County is looking at it. Are you going to let piecemeal across the state happen like that rather than consider a statewide minimum wage?

Dix: I think that that policy long-term has some very troubling impacts. We should definitely take a look at that. But long-term let's not take our eye off growth. We need to put forward the policies that we have seen in other states. The states that are growing the fastest are the states that are reducing taxes in order to bring new career opportunities to the states, the people in their states and that is happening. Let's learn from some of those lessons, some of these new ideas that really hold the promise of creating high paying career opportunities.

Borg: Representative Smith, increase in the minimum wage is not going to happen. But Governor Branstad did say if that bill is sent to me, I will consider signing it.

Smith: And he signed the last, when he was Governor before he signed an increase in the minimum wage, an $8.75 increase, or to $8.75 bill, was passed in the Iowa Senate, sent to the House. We attempted to bring that bill up last year and we did not get the votes to bring that bill forward. I do not anticipate any further action this session on increasing Iowa's minimum wage.

Henderson: Viewers of this program last week got a bit of a tutorial on the effort to change the state's Medicaid program and have private companies manage care. I'm just wondering, you two are the people that are sort of in charge of the political arm of getting people elected to the Senate and to the House. Senator Dix, do you think this is going to be a campaign issue among legislative races in 2016?

Dix: I guess at the onset of your question there I don't know that I necessarily see that being the focal point of the campaigns. And what is important for Iowans to really remember is that I believe Iowa has been an innovator in managed care, in trying to modernize our Medicaid delivery system. We have been a leader in that for a number of years. And what is being proposed here and what we're frankly moving forward on is really learning from those lessons and trying to incorporate some of the policies that exist today for those of us who have private care, we had advocates who are working to actually get things accomplished with our health to actually improve them for the people who are getting services, taxpayer funded health care in our state.

Henderson: 560,000 Iowans who receive Medicaid services of some sort, this change immediately would not affect nursing home residents. Do you think this will have an impact on legislative races in 2016?

Smith: Absolutely.

Henderson: Why?

Smith: I think that as I talk with Iowans across the state they're very concerned about this. You talk about 560,000 Iowans who are directly affected by this, add to that the providers, and last I knew we were still lagging behind with the number of providers who have signed up with one or more companies --

Henderson: In other words, doctors, hospitals, language therapists, anyone who would treat --

Smith: -- who has the ability to bill through the Medicaid program is affected by this as well. Then you add to that a third group, which are the families of the people who are participating in this program. There is a great deal of concern out there about whether this is the right direction the state should be going as evidenced by the vote in the Senate to recall this. All 26 democrats in the Senate plus 3 members of Representative Dix's caucus voted to recall and not to go privatization with this. Add to that the fact that we have not gotten any firm numbers that Iowa will save any money with this direction and the belief by the Center for Medicaid Services that Iowa is not ready to go in this direction. All of these are concerns for us.

Lynch: Another issue in the legislature this session is medical cannabis. And two years ago the state approved a very narrow medical marijuana bill and there is an attempt to expand on that. The Senate version is much broader than the House version that would allow the use of cannabis oil for epilepsy, MS and cancer at the end of life. Will either of these bills get to the Governor's desk, Representative Smith? And should Iowa follow the lead of 23 other states in allowing broader use of medical marijuana?

Smith: Your last question, the answer is yes, that we should be joining other states and we should be leaders in this area for people who have a great deal of difficulty managing the illnesses that they have. I have training as a substance abuse counselor and THC is a factor in marijuana that people get addicted to and causes the problems. These oils have a controlled amount of that substance within them. The bill that appears to have come through the House or is going through the House has some concerns with it. It is an improvement. There are two growers included in it so that we help address that issue and also it affects three illnesses, so two more than what was in the original bill. The difficulty will be the fee part of it and the fact that Representative Sands voted no in committee on the bill and whether it will be able to go through the Ways and Means Committee.

Lynch: Senator Dix?

Dix: I think it's an issue that we definitely should be talking about and we should explore all opportunities. I did support the legislation a couple of  years ago that decriminalized it for this group of people to get oil, the epileptic illnesses that exist today and try to provide some quality of life there. But let's not forget what the real issue here is as far as this becoming available to Iowans and people all across the country. We've had a longstanding view that the FDA is the person or the body that approves these medicines and by our talking about it hopefully we get their attention. But they really need to restructure this and put this, categorize it so that the studies can be done, the control measures can be put in place, so that people needing this medicine can get it in a dosage and a quality that is appropriate and assured.

Henderson: This Friday, DuPont and Dow announced that they would be housing the corporate headquarters of the world's largest seed company in Wilmington, Delaware, not in Johnston, Iowa or in Indiana. The state is still set to provide DuPont Pioneer $14 million for keeping about 500 research jobs here. Senator Dix, is that a wise use of -- $14 million to not have the corporate headquarters here? What are your thoughts?

Dix: What I think this really highlights in Iowa is it shines a beacon, all the discussion we've had about tax credits and incentives like that, it really shines a beacon on the fact that we are a very high tax state, one of the highest taxing states in the country. So we tend to have had a policy of looking at what we can do to pick winners and losers and bring certain industries to our state and to some degree that has been successful. But if you look at what I'm looking at across our country today, the states that are growing the fastest are the states that recognize that an income tax is a tax on productivity, hard work, investment and that is what we really want to attract is how can we bring more of those investments to our state that have the result of new career opportunities.

Henderson: Is this a wise use of taxpayer dollars?

Smith: Well, first of all, we're very glad that we have continued the jobs that you mentioned here in Iowa. But I think it's unfortunate that the company chose to have their headquarters in Delaware rather than in Iowa and I think we could have had more leadership from Governor Branstad in encouraging them and doing the efforts necessary to maintain that here in Iowa.

Borg: Are both of you saying, and we've only got 15 seconds left, are you saying it's not worth the $14 million to keep 500 jobs here?

Dix: I think we should be focusing on broader policies that attract and keep jobs, careers here in our state.

Smith: I think that we have to look at the cost benefit of that, like everything else that we do here in the state, but keeping a quality company like that and their headquarters in Iowa is very important.

Borg: Thank you for spending time with us today. Governor Terry Branstad will be with us at the Iowa Press table next week and you'll see that edition with Governor Branstad at 7:30 Friday night and noon on Sunday. I'm Dean Borg. Thanks for joining us today.


Funding for Iowa Press was provided by Friends, the Iowa Public Television Foundation. I'm a veteran. I am a builder. I'm a volunteer. I am a teacher. I'm a banker. I'm an Iowa banker. No matter who you are there is an Iowa banker who is ready to help you get where you want to go. Iowa Bankers, allowing you to discover the genuine difference of Iowa banks. Iowa Communications Network. ICN's Broadband Matters campaign advocates for access to high speed broadband in all corners of Iowa for education, public safety, health care, government and economic development. Information is available at broadbandmatters.com. Iowa Community Foundations, an initiative of the Iowa Council of Foundations, connecting donors to the causes and communities they care about for good, for Iowa, for ever. Details at iowacommunityfoundations.org. The Associated General Contractors of Iowa, the public's partner in building Iowa's highway, bridge and municipal utility infrastructure. The Arlene McKeever Endowment Fund at the Iowa Public Television Foundation, a fund established to support local programming on Iowa Public Television.

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