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The votes are in and the 2018 race for Iowa Governor has taken shape. We sit down with Democratic Party nominee Fred Hubbell on this edition of Iowa Press.

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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.               

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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, June 8 edition of Iowa Press. Here is David Yepsen.   

Yepsen: When all the votes were tallied in Tuesday's Democratic Primary, Des Moines businessman Fred Hubbell claimed more than 55 percent of the vote in a crowded field. He won 96 of Iowa's 99 counties and now pivots towards a general election battle with republican Governor Kim Reynolds. Mr. Hubbell joins us this week at our Iowa Press table. Thank you for being with us.

Hubbell: My pleasure.

Yepsen: Congratulations on winning the primary.

Hubbell: Thank you. Thank you.

Yepsen: Also joining the conversation are James Lynch, Political Writer for the Gazette and Kay Henderson, News Director at Radio Iowa.

Henderson: Mr. Hubbell, first decision, choosing a running mate. Who is she?

Hubbell: Well, we have a process which has been underway for a little while. But of course our focus has been on the primary. We had to win the primary before we had an opportunity to choose a lieutenant governor. And we will choose a very talented, capable person to be our lieutenant governor.

Henderson: Would it be a female or a male? If you chose a male you would be the first nominee from a major party since 1990 to do so.

Hubbell: I think the most important thing is to pick a person who is very talented, very experienced and if something were happen to me as governor could step in and do a great job as our governor.

Lynch: As David mentioned, you won 55 percent of the vote in the primary, in the democratic primary. What about that other 45 percent? Are they united behind you? Are you reaching out to those campaigns to make sure they're involved and supporting the democratic ticket?

Hubbell: Well, James, you know we had many very talented candidates in our campaign and we all worked very hard for the last year or so. We all have a lot of strong supporters. But at the same time we agreed on many of the issues, which was very clear in the debates and discussions we had all across Iowa. And I'm confident that over time our party will be extremely united because we need to change the direction of this state and we all agree that we need to have a new Governor and we need more democrats in that state legislature so we can take this state back in a better direction.

Lynch: You weren't the first choice for a lot of labor unions when they endorsed. Are you labor's friend now? And are they going to be enthusiastic supporters of your campaign?

Hubbell: Well, I think that there were, as you said there were 45% that didn't support our campaign initially, but at the end of the day we've been talking to a lot of people all across the state, including some labor officials, and I think our party will be very united and I think labor will be part of that united approach.

Yepsen: Mr. Hubbell, a lot of Iowans are taking a look at you for the first time with a new lens. You're the democratic nominee for Governor, they may not have supported you, they may not be democrats, they may be independents. What is your message coming out of your victory? What is your message to the Iowa voter?

Hubbell: Well, I've never been a candidate before, I've never been a politician or run for office before so I am new to this endeavor and to the people of Iowa in terms of votes and offices like this. But what I bring is a very long record in both public and private service delivering results for Iowans and putting budgets behind priorities and I think that is what Iowans want. They want somebody who cares about them, who cares about our state and is going to actually help people to realize their potential across Iowa and their communities to realize their potential because it's not happening today. And they trust me to be able to put the budget behind the priorities of education and health care and getting people's incomes up because that's what I'm hearing all across the state and that's what people want. They want to see progress in those areas and they're not getting it.

Yepsen: Who is Fred Hubbell?

Hubbell: Well, I'm not a, I should be better known than maybe you're suggesting because my family has been here for a long, long time. I've been an Iowan, fifth generation Iowan and I've worked all across the state. We had Younkers stores, 19 different stores across Iowa, we have Equitable Life Insurance agencies all across the state. One of our best agencies was down in Red Oak, Iowa, Mildred Parker was one of our best insurance agents all across the country right in Red Oak, Iowa. She did a great job. And I've worked with the Power Fund all across the state, I've worked with state economic development department, I have three kids, three grandchildren and I love Iowa and I've been here for a long time and I've worked in  all kinds of non-profit activities people know whether it's health care or education or environment. So this is no different. I'm just continuing to pursue the effort to make Iowa a better state.

Henderson: Your opponent, Kim Reynolds, on primary night said essentially you are so rich that you've never known that it's like to be not rich and that you have never had to balance the family checkbook because of the Hubbell name. How are you going to respond to her constant I guess message to voters that she comes from the working class and you come from the upper class and shouldn't be elected?

Hubbell: Well, first of all, she can attack me all she wants. My wife and I have had a lot tougher experiences than that. And so that doesn't bother me a bit. And we're going to continue to talk about where we want to take this state. She has done a terrible job of balancing the state's checkbook, that's the most important thing, look at her record. Her record of balancing the state's checkbook is dismal. The last two years in a row we've had to have midterm, mid-session significant changes to the funding for all the activities across our state whether it's health care or education, judiciary, Department of Health and Human Services. At the same time she has had to borrow $144 million from the reserve fund and it hasn't been paid back yet. That is a terrible job of managing the state's checkbook and that's what is important. Who can manage the state's budget and put the state's money behind the right priorities and deliver results for Iowans? That's what we're going to talk about.

Yepsen: You mentioned you and your wife have been through a lot worse. I think you're making reference to when you were taken hostage in an airplane hijacking. Tell us about what happened and what that means to you.

Hubbell: Well, we happened to get on an airplane that got hijacked and three people took over the airplane and they had grenades and pistols and a couple of days later all of a sudden they had automatic weapons and they found out who was on the plane, they asked us all to give our passports, and they wanted some political prisoners released. Of course I think there were five Americans to start to we were the target. And they said they were going to either blow up the plane or shoot the Americans first. Two days after he hijacking occurred, about this far away a gentleman was shot right in front of us. It was 13 days for me and 6 days for my wife where they were threatening to blow up the plane and/or kill the Americans every day. You have no idea what was going to happen, what might happen, so you've got a lot of time to sit there and try to figure out, look, am I going to get out of this? Am I not going to get out? And if I do what am I going to do with my second change? And for me sitting there for 7 days without my wife and really nobody else I knew or many of whom I couldn't even talk to because they didn't speak English, you spend a lot of time thinking about what you might want to do differently. And I remember how much my parents said, look, to whom much is given much is expected and I took that to heart and said, look, if I'm going to, to myself, I need to work harder in our community and to help all the people around me, not just have a good life myself, but help the community have a better life. And that's what I've done for the last 30 years ever since.

Yepsen: James.

Lynch: The Republican Party of Iowa has taken to calling you Prince Frederick or Sir Frederick, suggesting that you come from some royalty. Is this going to be about class warfare, as Kay was asking, that the rich Sir Frederick can't relate to regular Iowans?

Hubbell: Well, as David said earlier, we won 96 out of 99 counties. So I think most Iowans are focused on and concerned about what do you want to do for our state and are you listening to me? Do you understand my needs and my concerns all across Iowa? It doesn't matter what class you're in, it doesn't matter whether you're urban or rural, I think Iowans want to know, do you care about them, are you listening to them and what are you going to do to improve their lives and that's what we're going to talk about, her record of not helping Iowans and my commitment to put people first in our state and deliver on the budget and the priorities, helping everybody get better education, better job training and better health care.

Lynch: You have made no secret of the fact that you're wealthy and I think Iowans who have followed you in this campaign know that. Do you think they care that you're wealthy? And do you think they care that you’re willing to spend millions of your own money for $130,000 a year job? Does that seem like a good investment?

Hubbell: Well, I think it's a good investment in the people of our state. My wife and I have been committing our time, our abilities and our resources for education, for health care and for the environment, for Planned Parenthood and many other groups all across the state for years. This is no different. We're putting our time and our energy, our talent and our resources behind electing somebody who can do a good job for people in our state, and I mean all the people. There are a lot of people getting left behind in our state these days. This Governor and this legislature and their extreme agenda clearly don't represent all Iowans and I want to be the Governor for all Iowans and unite our state to bring people together and get results.

Lynch: So far you've spent about $3 million of your own money on winning the primary. Should I be concerned that while you say you're not beholden to special interests, that you are the special interest? Should I be concerned as a voter, as an Iowan, that someone who is willing to spend that much for this job may have a special interest?

Hubbell: Well, let's look at actually what has happened. We said from the very beginning that we were going to run a campaign in all 99 counties, we were the first campaign to have a supporter in all 99 counties. We have more people who are Iowans contributing to our campaign contributions than any other candidate. And we raised a lot more money from other people that we put in ourselves. So we have a very broad base of support all across our state and we will continue to work hard to get as many people supporting our campaign as possible.

Henderson: Governor Reynolds signed a tax bill in the past month. You have said that you would like to redo parts of it. If you are Governor in January, what will you ask the legislature to do in regards to tax policy?

Hubbell: Well, it's looking pretty grim at this point. The tariff wars are getting worse, right? The tariffs on livestock instead of being $400 million are now $560 million and now we have threats against steel, aluminum again as well as corn and maybe ethanol. So it could get a lot worse. So I think if you sat here today and today's world is what you're going to have in January we're going to have to peel back all those tax cuts because our state is not going to be able to afford that. If we have a billion dollars of hits to our farm economy that's going to be hundreds of millions of dollars hits to our state revenue and our state isn't going to be able to afford that. How are we going to pay back the $144 million that has already been borrowed from the rainy day funds if we already have a shortage next year of several hundred million dollars? How are we going to continue to even at a minute level fund education and health care and infrastructure in our state?

Henderson: So you would undo the individual income tax cuts. What about the corporate tax cuts?

Hubbell: I'm talking about all of the tax cuts. At this point in time, I said very clearly, I would have vetoed the law if I had a chance to veto it because it's fiscally irresponsible. Now that, if I'm Governor in January, we're going to have to take a look at what the situation is. There are some things in that tax law, like getting rid of federal deductibility and leveling the playing field for Main Street businesses with Internet, which I think are good, we'd like to try to keep those. But I don't see how we could have a tax law that reduces the revenue for our state government and I don't see how we can have a tax law that puts, if we do have any reductions in revenue, that gives most of it to big companies or big wealthy individuals instead of spreading it out in a more balanced way.

Yepsen: What about tax credits? You referenced them there. We hear politicians talk about oh we've got too many tax credits. Well, which ones do you want to get rid of? Earned income tax credit? I don't hear democrats talking about that.

Hubbell: No, I think our earned income tax credit is actually a very good tax credit.

Yepsen: But have you got some specifically in mind?

Hubbell: Well, I participated, as you know, on a tax credit review panel in 2009 and 2010. We looked at all the individual and corporate credits, exemptions and deductions, the annual ones, and we identified right there the ones that, where the state is putting out a dollar and we're getting back 50 cents or less than a dollar. And those should be cut back or they should be eliminated. The ones that you're getting back $1.50, as an example, for that dollar, you should keep those or maybe even enhance those. So we identified each one that fits into that category. But let me just give you an example. The Research Activities Tax Credit, which is the biggest tax credit we have in state government, originally it was for small businesses who wanted to hire people who were doing research, Ph.D. type folks and they didn't have enough money to pay those people because they're expensive so that's why it was a refundable tax credit. The state would actually write them a check because they usually didn't make any money, that way they could pay the researchers. Great idea to get businesses up and started and running. But these days over time it has morphed into a place where the large majority of all the tax credit money goes to a very few companies who don't even pay income taxes in our state and we write them checks for somewhere north of $40 million a year now. Why would we write checks to companies, which are very good businesses, I don't have any concern about the quality of the businesses, they’re good employers, they're good companies in our state, but if they're not paying income taxes then why do we write them a check, particularly when we can't balance our own state budget, or we wouldn't be borrowing money from reserve funds, and we're underfunding education and health care. What I'm going to say to those businesses is look, rather than give you a short-sided annual check, I'm going to give you a tax deduction, if you paid income taxes you get the value of the deduction, but I'm going to take those checks and invest in the future of your business, the future of our state, the future of our people by taking that money and improving our education and our job training and health care so they have better quality employees to hire in the future.

Yepsen: James.

Lynch: One potential source of new revenue for the state would be sports betting, which the Supreme Court has ruled states can regulate that. There has been some discussion in the Iowa legislature but no action taken. Where do you come down on this? Would you be supportive of sports betting? And if so should it be run through the licensed casinos? Run by the Iowa Lottery? Or is there another alternative for overseeing sports betting?

Hubbell: Well, I think you raised a lot of good questions there and my suggestion is now that the Supreme Court has made that available I don't see why Iowa needs to feel we have to rush into all of a sudden starting sports betting because some states are going to do it and they're going to do it well, others are going to do it and make some mistakes. Any why don't we just wait, there's an old adage about IBM was a smart second. Why don't we wait and just see what states are doing it right, which states aren't and then we can come in a year or two afterwards and do it the right way? But let's do it based upon experience rather than just a knee jerk reaction we have to rush out and do something.

Lynch: There is also a discussion about expanded gambling, more casinos, especially over in Eastern Iowa. There are people who want more licenses. Should there be more licenses and an unlimited number of licenses? Or are you concerned about cannibalization of the existing facilities?

Hubbell: I think the thing to do there is to ask the Racing and Gaming Commission to actually sit down and try to analyze what is the best way to manage --

Lynch: Haven't they done that already?

Hubbell: -- to manage our casino industry. They seem to have a clear bias towards protecting those that are already there, which makes some sense, but there are also other parts of our state that make good arguments for wanting to have some casinos in their neighborhoods, if you will. And I think the point is we need to really think about how we want to manage that industry and we want to keep protecting those that are there to make sure they stay successful? Is it really going to be harmful if we have more? Where should they be? And what is the motivation for the Racing and Gaming Commission? What is the best way to manage that industry in our state?

Yepsen: Mr. Hubbell, you're a businessman, why should the state be in the business of picking winners and losers? If somebody wants to open a casino and risk their capital, let them. Why not?

Hubbell: Well, that's the argument that you hear in other parts of the state. That's why I suggest let's, there are arguments on both sides of that and my point is let's ask the Racing and Gaming Commission, that's what they're there for, to actually review both sides of that discussion rather than looking at a particular casino location or decision and then making a decision. Let's step back and let's look at the whole idea and find out whether your approach is the right one or to protect the success of the ones that are there.

Yepsen: Mr. Hubbell, are you dodging the question here?

Hubbell: No, I'm just saying that I think our state has never really though about, now that we've been in the industry for a period of time, it's like the Research Activities Credit, it started for small businesses, now it's basically for large businesses. I'm suggesting we step back and change how we go back to more towards the original idea. So let's take the casino business, step back and figure out what's the right way to go forward.

Henderson: I want to circle back to your business background and the idea of tax credits, etcetera. Is there something in your corporate background that will come back to bite you during a campaign? For instance, closure of Younkers stores during your tenure at the helm?

Hubbell: Well, you can look at the record, while I was at Younkers we did close a few small, very small stores. Most of them were actually what we call clearance stores in Council Bluffs and one in the Eastgate Shopping Center here. But the reality is we also bought the business and we added a lot of new stores to Younkers and we hired a lot more people. When we had the Farm Crisis in the 1980s, which is when I was the Chairman of Younkers, it was a tough time for this entire state. I can remember driving to stores and in those days we didn't have a lot of highways so we went on two-lane roads, and I can remember driving by farm foreclosure sales from one store to another and a lot of those people were our customers, a lot of those people were our employees. And so we had to take tough steps to make sure we kept our business open and we employed as many people as possible. We started Farm Aid concerts, we brought Willie Nelson concert series to Omaha to do several concerts, they're still doing them in the Midwest now. We gave out Farm Aid scholarships to help kids go to school. That was a tough time. But our commitment was always to make sure our business was stable and could grow and could employ as many Iowans as possible. So sometimes you have to make these kind of decisions.

Henderson: One issue that is boiling, if you will, in rural and urban Iowa is the quality of Iowa's water. As Governor, as you take a drink of water, as Governor what sort of policy changes would you pursue?

Hubbell: Well, look, we all need clean water and we all need our farms to be successful in Iowa, that's very important. So we need to work together. Branstad and Reynolds have not done a good job of trying to bring people together to address this issue, rather they tried to make it a fight between urban Iowa and rural Iowa. Rural Iowa needs clean water just like urban Iowa does. Urban Iowa needs farms to be successful just like rural Iowa does. I want to bring people together and put together long-term, permanent solutions that can help protect and preserve our top soil at the same time we protect our water. The Nutrient Reduction Strategy is a good strategy going forward. But come on, it's a $4.5 billion problem so we need to put some serious muscle behind it, not just $20 million a year that is taken out of education and health care.

Henderson: So would you support raising the sales tax to finance that project?

Hubbell: I support fully funding the Natural Outdoor Resources Trust Fund and I support that because that would take the increase in the sales tax by three-eighths of a cent, could be done in one year, could be done over three years. I don't think that really makes a difference. But what is important is that if we do that, like many other states in our country have including Minnesota and Missouri have already done it years ago, and they're seeing the benefits from it and we're not. So if we do that it's constitutionally protected. We voters approved a constitutional amendment with more votes than Governor Branstad got in 2010. People want this because they know that it's going to improve their parks, their recreation, their ability to hunt and fish and recreate across the state as well as protect the top soil and improve the water quality.

Yepsen: Mr. Hubbell, this leads to a larger question about the rural/urban divide in our state. It's real politically, it's real you can see it. I remember Bob Ray used to say he was Governor of all the people. How do you go about handling the governorship so that you can protect production agriculture for farmers and still at the same time give people in the cities clean drinking water. How do you rise above this current situation and bring people together?

Hubbell: Well, if you heard my speech on Tuesday night at our election event you would have heard me say the very same thing. I want to be the Governor for Iowans and that means all Iowans, not just urban or rural, not just democrats, but all Iowans because we don't have enough people in our state to begin with. We need to work together if we're going to improve the quality of life and the success for people in our state. All three million of us need to come together, work together, build a better community, build a better quality of life for everybody and that’s my approach. That's why I spend so much traveling around the state, all 99 counties, because I want to understand their issues, I want them to know that I'm interested in what they need, what they think is wrong, what can be improved and share my ideas and try to figure out how we can help everybody in this state do better. And there's enough resources in our state to make a lot of improvement. We just need to stop the wasteful, short-sided corporate giveaways, that $160 million we've all talked about, and instead use that to invest in our state for education and health care and infrastructure so the entire state can benefit.

Yepsen: James.

Lynch: You've been very vocal in your support of Planned Parenthood and I'm wondering, as Governor what can you do to restore funding for Planned Parenthood services and to undo the abortion restrictions that this legislature has enacted? What can the Governor do? And given that you may have split control of the legislature?

Hubbell: Well, the first thing I'm going to try to do is meet with all the elected officials, republicans and democrats, in November. I'm not going to wait until January to do it because we're going to know who they are in November and let's sit down and talk about what can we do to improve health care for people? If we improve the access to health care for people that saves the state a lot of money, it saves our taxpayers a lot of money, then we can use that for other things. What can we do to improve our education? We used to be number one in the country. We all know that, we remember that. We're not now. What are the things that we agree on, that unite us, whether we're democrats or republicans, it's not going to be everything but let's try to focus on those things first.

Henderson: One minute left. You and your democratic colleagues have been critical of the Governor awarding tax credits to Apple. Will you call Apple's Tim Cook if you're Governor and rescind those?

Hubbell: The way the tax credits work is there is a contract there and if Apple lives up to the terms of that contract you can't recall them. I learned that when I worked at Economic Development. I'm going to make sure that Tim Cook and everybody else lives up to the requirements of their tax credits, delivers the jobs, delivers the payroll that they promised, otherwise we will call it back. But if they do their job, their part of the contract then we need to support that.

Yepsen: We only have about 15 seconds left. Why doesn't the Governor stand up to these corporations that want these tax breaks and say, don't let the door touch your fanny?

Hubbell: Well, I'm more than willing to stand up, I did that in economic development. We said no to quite a few projects. If it's not good value for our state we should not put that money out. And giving $20 million in tax credits for 50 jobs with no supply chain associated, no extra benefits, we should not have done that.

Yepsen: Mr. Hubbell, we're out of time. Thank you for being our guest. We look forward to having you back.

Hubbell: I hope so. We didn't get to cover everything we need to cover.

Yepsen: Plenty of time between now and November. Thanks.

Hubbell: Thank you.

Yepsen: And thank you for joining us. We'll be back with another edition of Iowa Press next week. Join us for Iowa Press 7:30 Friday nights and Noon on Sundays on IPTV's main channel with a rebroadcast Saturday morning on our .3 World channel. 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.