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2018 is off to a fast and furious start for lawmakers in Washington and here in Iowa. We check in with top Statehouse reporters and political reporters on this edition of Iowa Press.

Funding for Iowa Press was provided by Friends, the Iowa Public Television Foundation. The Associated General Contractors of Iowa, the public's partner in building Iowa's highway, bridge and municipal utility infrastructure. I'm a dad. I am a mom. I'm a kid. I'm a kid at heart. 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. 

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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 2 edition of Iowa Press. Here is David Yepsen.

Yepsen: Just one month into 2018 political reporters have set a busy pace for the remaining year. Legislative developments at the Statehouse in Des Moines and political maneuvering ahead of decisive primary elections in June and midterm elections in November. We've gathered a group of Iowa reporters to dig into it all. Joining us today, Erin Murphy is Des Moines Bureau Chief for Lee Enterprises. Kathie Obradovich is Political Columnist for the Des Moines Register. Jason Noble is Chief Political Writer for the Des Moines Register. And Kay Henderson is News Director at Radio Iowa.

Yepsen: Lots to get to, gang. Kay, let's go around the table and I'd like each of you to give me your impressions of the session so far.

Henderson: A little activity and it seems as if legislators don't want to be there because they're having to make weighty decisions on budget matters and they cannot decide, among the republicans, the path forward on tax cuts.

Obradovich: This is about, more about money than red meat this year. The budget is the big issue, tax cuts will be the big issue. The red meat that you normally might see getting into an election I think a lot of that is going to fall by the wayside. Lawmakers want to get out and get on the campaign trail early.

Murphy: It has been interesting for me to watch Governor Kim Reynolds in her first session as Governor, and we're going to touch on some of those things later, but she got one of her big achievements done right off the bat, getting a water quality bill to her desk and signed. So the session is off to a good start for her.

Noble: Yeah, along the same lines I think what you're seeing from Governor Reynolds is her putting her stamp on some of the big issues coming up in the campaign. Like Erin said, water quality was the first bill that hit her desk, her first executive order was on workforce development, workforce training, which is something that she really wants to be talking about into the election in November.

Yepsen: Kay, let's go through some of these issues. The big item up there is the budget. Are they going to make any cuts to the current year?

Henderson: Yes. They just don't know how deeply they will be cutting yet. And there is a difference of opinion still among democrats from the House compared to Senate, I mean republicans in the House compared to Senate republicans. In quizzing House Speaker Linda Upmeyer this week, it's clear that House republicans want to make a different kind of cut to the state's Regents institution, just letting the Regents decide among themselves how to manage those cuts whereas republicans in the Senate want to designate which institution gets cut by how much. And it is clear that republicans in the House don't care to cut community colleges by $5.4 million as Senate republicans have proposed.

Yepsen: So any thoughts from anybody on how this shakes out?

Obradovich: Well, however they do it, the Regents are going to be the big losers here. They are taking just percentage wise the biggest share of any other area of state government and I think that's part of a trend where we're seeing the republican controlled legislature starting to erode more and more support from state universities, taking that money and using it to either bolster up K-12 or especially community colleges, which are going to benefit from the Governor's workforce development plan as well. I think some of that is philosophical, they think that the state universities are just factories for churning our liberals, but also I think it is strategic in the sense that they figure Iowa needs people to get out into the workforce with job skills and not piles of debt.

Yepsen: Workforce, they can't find enough workers. Erin, what are they doing about that?

Murphy: That, as Jason talked about, that is one of the Governor's priorities and she is going to put in her budget some new funding for her Future Ready Iowa program, which is designed to create grants and help apprenticeships and things like that to try and boost not necessarily the number in the workforce, because unemployment is very low in Iowa, we're under 3% if I remember right, but it's more about boosting some of the skills of the low skilled workers.

Yepsen: Why don't they just, if employers need workers, why don't they just raise pay? This is the law of supply and demand.

Noble: Well, they're talking about a skills gap. There is a need for more trained welders, for more trained computer programmers and that is what this big thrust from Governor Reynolds but also you hear a lot of democrats talking about this too that there needs to be this investment in education, community college degrees that people can do jobs that take a little bit more skills than what you get in high school.

Obradovich: And a related problem, David, is that you have to convince, if you're going ot try to raise pay and bring people into the state you have to convince them to move into some pretty small towns in rural Iowa where these small manufacturing companies can't get the skilled people to keep their manufacturing plants open. There has been a school of thought that I've seen start bubbling up that well, ultimately these small businesses are going to have to move closer to the cities if they really want to get skilled labor.

Henderson: Because if you move into a small town you may have to do it in an RV. There's nowhere to live in many of these communities that are trying to have their local manufacturers expand and hire new people to be welders.

Yepsen: Well, Jason, what comes first, the chicken or the egg? What comes first, the houses in small towns, or the jobs?

Noble: Well, I think the policy discussion, the political discussion right now is all about the jobs right now and they'll figure out the housing piece once they get there.

Yepsen: Erin, this cut, everybody says, well it's a small cut. It is true that this current budget, they're already halfway through, more than halfway through the current budget year. So when they talk about cutting half a percent it's really a full percent. How are agencies managing dealing with these cuts?

Murphy: Well, they were warned going into the fiscal year and even again this past December when they were starting to put together their budgets for the next year. This isn't new on the radar, they knew revenues haven't been coming in as much as they were projected, that money was going to run out and these adjustments were going to have to be made. So agencies have been on alert to be really towing the line on spending. So it's not like they're suddenly having this dumped on their plate and having to deal with it. Now, that said, it's still a painful process, it's still difficult for these, especially since this is the second consecutive year they've had to do this. We went through this last year as well and now they're having to do it again.

Yepsen: Right, and K-12 schools are supposedly being held harmless, but they certainly don't feel like they're getting a big appropriation.

Murphy: No and that's also the challenge, they declared K-12 schools and Medicaid off limits for these cuts, which most people think is a good idea and agree with, but that also leaves, that takes up a huge chunk of the budget.

Noble: And to Kathie's point on higher ed, that's another reason why we're looking at cuts to higher ed, because that’s where the money is if you're not going to touch health care and you're not going to touch K-12 education.

Yepsen: Do you agree with Kathie's point about the politics of that, that really higher educated people aren't really the constituency anymore of the Republican Party, so it becomes easier for them to cut higher ed than it is to cut community college?

Noble: Well sure, there's definitely polling that supports that, certainly on a national level, that republicans have become deeply skeptical of higher ed and the value of a college education. And if you look at the demographics within the state of Iowa, the people's republic of Johnson County, the liberal enclave is where the University of Iowa is.

Yepsen: Right.

Henderson: And the other thing is that they're economic engines, they're just bursting with jobs and economic opportunity and so if you're living in a small town in an incredibly small county you resent that.

Yepsen: So yeah, resentment, the politics of resentment. Kathie, the tax bill. They've talked about tax legislation. Where do those issues stand?

Obradovich: Well, it's going to stand mostly at the end of the legislative session. Republicans want to wait until they get their revenue estimate in March before they really put the final touches on their tax bill. But we just spend the last five minutes talking about budget cuts, right, so now here they come with their idea to cut taxes in the context of this discussion about all of the budget cuts that they're doing. You start off with a sort of a political optics problem there, especially if you're going to be arguing over how much state revenue you're going to take off the table. Secondly, a lot of the discussion about tax reform and also about the reason why we're in this budget problem is about all the exemptions and credits that businesses and other people are getting that sort of drain away state revenue, even though the economy is growing. Governor Reynolds took that discussion and took it off the table for this year. She says, we're just going to study that and we're going to come back next year and talk about exemptions and credits. So we're not talking about probably a revenue neutral tax bill here, we're talking about taking revenue off the table.

Yepsen: Jason, wasn't that a good political move by the Governor to take the tax credit debate off the table? Because when politicians get into tax credits they're going to offend a lot of important interest groups. So she doesn't need to do that in an election year does she?

Noble: Well, that's true and that's definitely part of the calculation there. The flip side of that is that this is a huge talking point for democrats, that this is the reason the state's budget situation is what it is and they want to be pushing that conversation about credits through to the election and so that's still going to be part of the conversation.

Yepsen: Erin, do you think we'll have the legislature, 42 of these credits I'm told, we'll just have 42 amendments up saying are you for or against this tax credit? How about that?

Murphy: I don't foresee that coming, having to put the legislators on the record for each one of those tax credits.

Henderson: The other part of this is coming up with tax policy changes is hard. Why do you think the legislature hasn't done this before? It's really hard to thread the needle on this.

Yepsen: But it is true that everybody is in agreement, they're likely to eliminate federal deductibility --

Noble: That is the needle that you can thread here I think because because of the federal tax reform, federal deductibility in Iowa is going to lead to a windfall in state income tax collections and that is an area where they could cut taxes to offset that gain and that might be something that they can get done and is relatively revenue neutral.

Yepsen: And the Governor this year wants to capture that revenue to take care of her budget --

Noble: For the current year and then going forward.

Yepsen: Erin, let's move onto water quality. Passed a water quality bill, the democrats say it doesn't do much, the Governor wanted to sign it. Where does that debate now stand?

Murphy: So as we said at the top the first bill that the Governor was able to sign, called for it in her Condition of the State and had it on her desk a couple of weeks later, it creates some new funding streams and it's going to produce about $270 million over the next 11 years and then it becomes about perspective. That's a lot of money, $270 million going to, over the next decade or so, funding projects that will help with conservation efforts and water cleanup efforts. On the other side, the nutrient reduction strategy, pardon me, produced by Iowa State University, calls for a $4 billion investment to fix this problem. So it's a lot of money but it's still a drop in the bucket.

Yepsen: I hear in some of the stories that some members are talking about additional water quality legislation this session. Does anybody think that's going to happen?

Obradovich: The republicans, especially in the House, started talking immediately this legislative session about this being a generational issue and one that the legislature can't stop working on. And part of the reason I think is to offset this argument that this particular bill doesn't do enough. This is a political issue, especially in suburban districts, where some republicans may be facing tough races in November. So they do want to keep the pressure on this. I don't think that what the Senate wants to do yet this legislative session is going to amount to too much. I think that they're talking about opening up the nutrient reduction money to more people like industries and drinking water treatment plants and those kinds of things. But I do think that they do want to maintain the impression that that one bill that they did, they don't think that just solved the problem, that they want to keep working on it.

Yepsen: Jason, Medicaid, what is the politics of that debate all about?

Noble: Well, we haven't seen any action yet in the legislature or from the Governor to acknowledge the problems that have come to light over the last year and a half. What I think we have seen so far this year though is an acknowledgment that this is a salient political issue, this is something that potentially voters could be making decisions in November on and that republicans, as well as democrats who have been talking about this for a long time, need to do something. We just haven't seen that something yet.

Murphy: And where the only line is being drawn really right now is democrats, many democrats are saying we need to revert much of the population, if not all of them, back to a fee for service under the state umbrella and you haven't heard as many republicans say that. Most of them will say no, the private management is the right way to go, we just need to make some tweaks to ensure people aren't falling through the cracks.

Obradovich: We were kind of struck in the Condition of the State Address by Kim Reynolds saying mistakes were made on Medicaid. I think that was a real strong signal that they are realizing that there's more political pressure there than perhaps they otherwise thought there would be. And republicans in the legislature also saying, this has got to be fixed or we're going to have to step in.

Yepsen: Kay, is this where Governor Reynolds starts to distance herself a little bit from Terry Branstad?

Henderson: Indeed, and part of that is because not only are you having patients complaining about the system, you're having providers complain about the system, hospitals not getting paid on time, clinics not getting paid on time, doctors not getting paid on time by this system for providing care to Medicaid patients and this is a huge chunk of Iowa, this is not a small number of people who are in the Medicaid system, it's a huge chunk of the state.

Murphy: And as with a lot of issues the rural areas are getting hit the hardest.

Yepsen: Well, Erin, speaking of rural area, the Chief Justice is saying these budget cuts could result in the closing of 30 county courthouses. 30, that's almost a third of the courthouses in the state. How does that play?

Murphy: That has got some people concerned. And we should clarify when they say closing courthouses, some courthouses also have local -- courts looking at the courts -- but there is a lot of concern about that and you're talking about the delay of justice and justice delayed is justice denied. I've talked to attorneys and advocacy groups that are all very concerned about trials being strung out and people having to wait longer and longer for their day in court, having to travel one or two counties over for a trial if their courthouse is one that gets closed. So there's a lot of people very concerned about the possibility of those cuts having that kind of impact.

Henderson: Let me insert Joe Biden's favorite word, hyperbole, that is what republicans in the legislature think this talk of closing that much of the court operations is in terms of this cut to the current year. That is what Linda Upmeyer signaled this week.

Obradovich: Yeah, firemen first is a scare tactic. But, how interesting would it be if this budget discussion pushed a talk about how many courthouses we really need in Iowa? We've stopped talking, we stopped talking a long time ago I think about whether Iowa really needs to have 99 counties. We are spending a lot of money keeping a lot of different county governments afloat. If courts started a push and actually did start pulling out of some of those courthouses I think what follows is a discussion about how many county governments we actually need.

Yepsen: Yeah, and a lot of rural voters understand that. Kay, talk about the ICN, Iowa Communications Network, big brouha there, some misspending issues. Where does that stand? What is the legislature going to do with that?

Henderson: Well, this past week there was a 90 minute hearing in the House government oversight committee about an audit that was done that showed the previous director, who was fired in January, had misspent $380,000. There are so many layers to this and it's what happens when there are kind of these investigations by legislators. Number one, hiring of crony’s and able to sort of escape notice and giving exorbitant raises to the crony that was hired to be the executive director's secretary. Legislators are going to consider hiring practice changes in state government because how did these people get state paychecks from the HR agency in state government, number one? Number two, this is going to be an issue in the state auditor's race because the state auditor sat on the board that oversaw this Iowa Communications Network and didn't know this stuff was happening. The candidate that democrats have that will be going up against her, Rob Sand's was in the room during the whole 90 minute session taking notes on what she was saying. So expect this to play out in that race. It's about the management of state government, it's going to percolate up to Kim Reynolds' race as well.

Noble: It also goes to what is the future of the ICN?

Yepsen: What is the future of the ICN?

Noble: Well I think that's pretty uncertain at this point. There has been talk forever, the ICN has been around for 30 some years now, as of five years ago there was a discussion about can we privatize this, can we sell this to a private company? At that time in 2013 they put it out for bid and got two bids from a single company and Governor Branstad decided that neither one was a good deal for the state. That issue is still out there.

Henderson: And we heard on this show last week Jack Whitver, the Senate President, suggesting we might just shut it down because it's a loser.

Obradovich: Yeah, five years later the idea isn't trying to get some money out of it for the state, the idea is sell it for scrap, get something out of it. There's no talk about the state recouping it's millions and millions of dollars of investment anymore.

Yepsen: Kathie, social issues are you call them red meat issues, hot button issues, social issues are always part of the legislative session and we've got a number of them that are facing this legislature. The death penalty, abortion related legislation, transgender use of bathrooms, Bible in civics lessons, calling a constitutional convention, sanctuary cities. We can get to a few of these but where do these issues stand?

Obradovich: Most of them stand on the cusp of extinction already. We have about two weeks until a lot of these policy bills have to make it through committee in one chamber or the next and a lot of them are not going to make it. We saw the House version of the death penalty bill already die this week. Senate has a live round. But I just don't really see them wanting to get a really emotional debate going that will change how people feel about the whole rest of the legislative session. They want to get the money issues done and get out. A lot of these other big social issues are going to be the same way. They acted on a big abortion bill last year. Are they going to have another debate this year? I kind of doubt it. The Bible thing, I think having Bible classes in public schools, I think that was an issue that somebody's constituent wanted and they put it up.

Yepsen: Jason, doesn't the republican majority in the legislature have to do some of these to keep their core base voters happy? These also represent a lot of influential interest groups inside the Republican Party that are asking for these.

Noble: Sure and I think that having the conversations that they're having sort of at the subcommittee committee level checks some of those boxes and you can also look back to last year, as Kathie mentioned, a 20 week abortion ban was passed in the legislature last year, you had big changes to worker's comp, to public sector unions, those are things that republican primary voters are going to want to see and they were done last year.

Yepsen: I've always thought that legislative leaders take issues like that, throw them out there for members to deal with and reporters to write about while they leaders are in the back room working on the important stuff like budget cuts and tax bills.

Obradovich: Time killers.

Henderson: But I think among these the one that has the best chance of becoming law is the bill that would crack down on so-called sanctuary cities. Legislators say of course there is no sanctuary city now in Iowa but they want to prevent one from happening. And the Governor actually sent out a fundraising memo in regards to this issue. It's something that republicans nationally are going to be pushing if indeed it looks like Congress does not resolve the DACA related issue. And so I think that among all of these social issues is the one to keep an eye on.

Yepsen: Speaking of politics, we've got just a couple of minutes left, Kay mentioned the Governor and fundraising. Jason, what is your sense of the race for Governor?

Noble: Well, we've got a very competitive race on the democratic side. I think that it has started to clarify a little bit. There was a fundraising deadline earlier in January for the entire calendar year of 2017, we saw how much the candidates have raised and with that very important milestone we can see that Fred Hubbell, Cathy Glasson, Nate Boulton are the leading candidates in this thing. Andy McGuire, John Norris still have the resources to run campaigns, they'll be in it, it looks like end of June, but it looks like a three-way race at this point and a very competitive one.

Yepsen: Erin, what is your take on that?

Murphy: Yeah I'd agreed and it was interesting to kind of see where the financial support came from those candidates and especially Cathy Glasson had a very interesting year. She basically had one labor group that supported her and propped up her campaign and put, what was it, $1.8 million into her efforts, she was able to get on TV earlier this year and it also kind of made up for a little divide in the labor community because Nate Boulton has gotten a lot of labor support. So it has created a little interesting dynamic there.

Henderson: Well the other dynamic is the Service Employee's International Union, which is the union which made the donation to Cathy Glasson, is trying to plant a flag. They want to argue that they are the only union among all of the constellation of unions that is growing and they want to be a player in Iowa politics in 2018 and beyond.

Yepsen: Erin, we've got about less than a minute left, the race for Congress. Who up there in Northeast Iowa looks to be a leading contender?

Murphy: Yeah, Abby Finkenauer had a real good fundraising effort and she is someone who has been involved in politics for a long time, is a state legislator now, she is in a primary with Mr. Heckroft, I forget his first name, Thomas Heckroft. So that is still going to be an interesting primary. But Abby had a good fundraising year and it will be interesting to see how much she can challenge Rod Blum in that vulnerable seat.

Yepsen: We've got to come back to this subject at another roundtable because we're out of time right now. Thanks to each of you for being with us today. And thank you for joining us. We'll be back with another edition of Iowa Press next week at our regular times, Friday night at 7:30 and Sunday at Noon on our main IPTV channel with a rebroadcast on our .3 World channel Saturday morning at 8:30. For all of us here at Iowa Public Television, I'm David Yepsen. Thanks for joining us today.

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Funding for Iowa Press was provided by Friends, the Iowa Public Television Foundation. The Associated General Contractors of Iowa, the public's partner in building Iowa's highway, bridge and municipal utility infrastructure. I'm a dad. I am a mom. I'm a kid. I'm a kid at heart. 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.