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IOWA PRESS #2730 - REP. DAVE MILLAGE AND SEN. TOM FLYNN
April 2, 2000

Yepsen: ONLY TWO WEEKS REMAIN UNTIL THE SCHEDULED ADJOURNMENT OF THE 78TH IOWA GENERAL ASSEMBLY, AND THERE'S NO BUDGET DEAL. WE'LL GET STATEHOUSE ASSESSMENTS FROM REPUBLICAN REPRESENTATIVE DAVE MILLAGE, CHAIRMAN OF THE APPROPRIATIONS COMMITTEE IN THE IOWA HOUSE, AND SENATOR TOM FLYNN, THE RANKING DEMOCRAT ON THE APPROPRIATIONS COMMITTEE IN THE IOWA SENATE ON THIS EDITION OF IOWA PRESS.

FUNDING FOR IOWA PRESS WAS PROVIDED BY FRIENDS OF IOWA PUBLIC TELEVISION. AND BY THE IOWA BANKERS ASSOCIATION... FOR PERSONAL, BUSINESS, AND COMMERCIAL NEEDS, IOWA BANKS HELP IOWANS REACH THEIR FINANCIAL GOALS. AND BY THE ASSOCIATED GENERAL CONTRACTORS OF IOWA, THE PUBLIC'S PARTNER IN BUILDING IOWA'S HIGHWAY, BRIDGE, AND MUNICIPAL UTILITY INFRASTRUCTURE.

THIS IS THE SUNDAY, APRIL 2nd EDITION OF IOWA PRESS. HERE IS DAVID YEPSEN.

Yepsen: APRIL 18th IS THE SCHEDULED ADJOURNMENT DATE FOR THE LEGISLATIVE SESSION OF 2000. WHETHER OR NOT THE DEMOCRATIC GOVERNOR AND THE REPUBLICAN LEGISLATURE CAN COME TOGETHER ON A BUDGET DEAL IN THE NEXT TWO WEEKS ISN'T CLEAR. WHAT IS KNOWN IS THIS: THE STICKING POINTS ARE BOTH PHILOSOPHICAL AND POLITICAL, AND APPARENTLY, NUMEROUS. SOME POLITICAL OBSERVERS SAY THE STANDOFF IS NOW A SHOWDOWN AND THAT A SPECIAL LEGISLATIVE SESSION MIGHT BE CALLED TO IRON-OUT THE DIFFERENCES. STILL, SOME STATEHOUSE LEADERS ON BOTH SIDES OF THE FENCE SAY THERE ARE ENOUGH AREAS OF AGREEMENT TO COME UP WITH A BUDGET IN TWO WEEKS. WELL, HERE TO HELP US BETTER UNDERSTAND IT ALL ARE TWO STATEHOUSE VETERANS WHO ARE CLOSE TO THE PROCESS. REPRESENTATIVE DAVE MILLAGE IS A REPUBLICAN FROM BETTENDORF, AND HE'S THE CHAIRMAN OF THE APPROPRIATIONS COMMITTEE IN THE IOWA HOUSE. SENATOR TOM FLYNN IS A DEMOCRAT FROM EPWORTH, AND HE SERVES AS THE RANKING MINORITY MEMBER ON THE APPROPRIATIONS COMMITTEE IN THE IOWA SENATE. GENTLEMAN, WELCOME TO IOWA PRESS. GLAD TO HAVE YOU BACK. ALSO WITH US HERE AT THE IOWA PRESS TABLE ARE IOWA STATEHOUSE REPORTERS MARY RAE BRAGG OF THE DUBUQUE TELEGRAPH HERALD AND MIKE GLOVER OF THE ASSOCIATED PRESS.

Glover: REPRESENTATIVE MILLAGE, MUCH HAS BEEN MADE OF THE BUDGET DIFFERENCES AT THE HILL. THE BUZZ IS THAT THE LAST WEEKS OF THE LEGISLATIVE SESSION YOU DOMINATED BY THIS BUDGET FIGHT. WHAT ARE THE DIFFERENCES THAT YOU SEE IN THIS BUDGET FIGHT RIGHT NOW? WITHOUT GOING THROUGH THE WHOLE BUDGET, WHAT ARE THE DIFFERENCES?

Millage: WELL, THE DIFFERENCE IS THE GOVERNOR, WE BELIEVE, BREAKS THE SPENDING LIMITATIONS LAW. HE SPENDS MORE THAN 99 PERCENT OF THE AVAILABLE RESOURCES; HE MOVES SOME THINGS OFF BUDGET THAT WE DON'T BELIEVE SHOULD HAVE BEEN MOVED OFF BUDGET; HE DIPS INTO THE RAINY DAY FUND; AND HE USES REVERSIONS IN ORDER TO BALANCE HIS BUDGET WHEN THE LAW CLEARLY SAYS THAT HE'S NOT TO USE REVERSIONS BECAUSE IT'S AN ARBITRARY FIGURE TO DO SO. REVERSIONS ARE THE MONEYS THAT COME BACK AFTER THE END OF THE BUDGET YEAR THAT AREN'T SPENT.

Glover: TO MAKE A LONG STORY SHORT, HE WANTS TO SPEND MORE THAN YOU WANT TO SPEND.

Millage: I THINK THAT'S A FAIR ASSESSMENT.

Glover: SENATOR FLYNN, WHAT DIFFERENCES DO YOU SEE? DO YOU SEE PHILOSOPHICAL DIFFERENCES OR IS IT, AS REPRESENTATIVE MILLAGE SAYS, JUST THE DEMOCRATS WANT TO SPEND MORE?

Flynn: I THINK THERE ARE SOME PHILOSOPHICAL DIFFERENCES IN THESE TWO DIFFERENT BUDGET APPROACHES. THE DEMOCRATS WITH THE GOVERNOR... WE WANT TO TALK ABOUT SOME OF THE ISSUES THAT WE'VE HEARD ABOUT IN THE CAMPAIGNS, SOME OF THE ISSUES THAT GOVERNOR'S OFFICE HEARD ABOUT WHEN THEY WERE GOING AROUND THE STATE DEVELOPING A BUDGET PLAN FOR THE STATE OF IOWA. THERE ARE SOME KEY DISTINCTIONS HERE. EDUCATION IS GOING TO BE A SIGNIFICANT ISSUE. THAT IS A MAJOR PRIORITY FOR THE DEMOCRATIC CAUCUS IN THE IOWA LEGISLATURE. THE JUSTICE BUDGET, ANOTHER KEY CONSIDERATION. PHILOSOPHICALLY WE HAVE SOME STARK DIFFERENCES.

Bragg: REPRESENTATIVE MILLAGE, WHAT CAN YOU DO IN THE LEGISLATURE TO PREVENT THESE KIND OF LOG JAMS FROM HAPPENING IN THE FUTURE?

Millage: WELL, YOU KNOW, THIS IS NOT REALLY A LOG JAM; IT'S A SOLVABLE BUDGET PROBLEM. I THINK THAT THE GOVERNOR HAS TO REALIZE THAT WE'RE NOT ABOUT TO SPEND AS MUCH AS HE WANTS TO. WE RECOGNIZE THAT THE GOVERNOR HAS SOME PRIORITIES, THAT HE WOULD WANT TO SEE MAYBE MORE MONEY PUT INTO THOSE PRIORITY AREAS, BUT HE'S GOING TO HAVE TO REPRIORITIZE HIS OWN BUDGET. HE'S GOING TO HAVE TO RECOGNIZE THAT THE REPUBLICANS ARE ELECTED ON A MANTLE OF FISCAL RESPONSIBILITY AND THAT WE ARE GOING TO ABIDE BY THE SPENDING LIMITATIONS LAW. TO PREVENT A LOG JAM FROM OCCURRING IN THE FUTURE, I THINK MAYBE THE GOVERNOR NEEDS TO INCLUDE MEMBERS OF THE LEGISLATURE IN HIS BUDGET DEVELOPMENT PROCESS.

Yepsen: SENATOR FLYNN?

Flynn: WELL, YOU KNOW, THERE ARE SOME DIFFERENCES IN OPINION ON THIS. FIRST OF ALL, WITH REGARD TO THE LEGALITY OF THE BUDGET, THE ATTORNEY GENERAL OF IOWA, THE CHIEF LEGAL OFFICER IN THIS STATE, HAS SAID THAT THE GOVERNOR'S BUDGET IS LEGAL. LET'S FIRST START WITH THAT.

Yepsen: EXCUSE ME, SENATOR. HE'S A DEMOCRAT, TOM MILLER. THE REPUBLICAN AUDITOR OF THE STATE, DICK JOHNSON, HAS SAID THE BUDGET IS ILLEGAL.

Flynn: THERE MAY BE SOME DIFFERENCES OF OPINION WITH REGARD TO SOME PARTISANSHIP. BUT IT REMAINS THE SAME THAT THIS BUDGET IS LEGAL; THAT THIS BUDGET HAS BEEN AFFIRMED BY THE ATTORNEY GENERAL AS A LEGAL BUDGET; AND THE LEGISLATURE IS GOING TO APPROACH IT IN THAT FASHION.

Glover: REPRESENTATIVE MILLAGE, YOU SAID THAT THIS IS A SOLVABLE BUDGET PROBLEM. HOW DO YOU SOLVE IT? YOU HAVE A GOVERNOR WHO HAS THREATENED TO VETO HUGE PORTIONS OF THIS BUDGET AND MAKE YOU START OVER AGAIN. HOW DO YOU WALK YOUR WAY OUT OF THIS? HOW IS THIS PROBLEM SOLVABLE?

Millage: WELL, I THINK BOTH SIDES HAVE TO COME TO THE TABLE, RECOGNIZE EACH OTHER'S -- WHERE THE FRAMEWORK IS OF AGREEMENT, AND BUILD UPON THE AGREEMENTS THAT HAVE BEEN MADE. FOR THE MOST PART, 95 PERCENT OF THE BUDGET IS AGREED TO BETWEEN THE REPUBLICANS AND THE DEMOCRATS AND THE GOVERNOR. IT'S JUST THAT 5-PERCENT STICKING POINT. I THINK YOU BUILD UPON WHAT'S BEEN AGREED UPON. IF YOU LOOK AT THE TOBACCO SETTLEMENT BILL AS AN EXAMPLE -- THIS IS A BILL THAT'S BEEN NEGOTIATED BETWEEN THE GOVERNOR AND THE LEGISLATURE ALL YEAR -- WE'RE DOWN TO THE LAST COUPLE WEEKS OF THE SESSION; WE JUST PUT IT OUT OF COMMITTEE TODAY. AND OF THE 55 MILLION THAT'S APPROPRIATED IN THAT BUDGET, PROBABLY 50 MILLION OF IT'S AGREED.

Glover: WELL, THEN YOU'VE SAID EARLIER THAT THE SORTS OF THINGS THAT THE GOVERNOR HAS TO UNDERSTAND THAT YOU'RE GOING TO DO. WHAT DO YOU HAVE TO UNDERSTAND THE GOVERNOR HAS TO GET OUT OF THIS?

Millage: WELL, THE GOVERNOR NEEDS TO TELL US WHAT HIS PRIORITIES ARE. HERE'S OUR BUDGET. NOW THAT WE'VE PRESENTED YOU OUR BUDGET, WHAT PRIORITIES DO YOU HAVE THAT YOU SEE LACKING IN THESE BUDGETS?

Yepsen: MR. MILLAGE, I WANT TO GO BACK TO MARY'S QUESTION A MOMENT AGO, AND THAT IS, WHAT HAS TO BE DONE IN THIS STATE TO AVOID THESE LOG JAMS AND SNAFUS THAT FEATURE EVERY YEAR UP THERE ON THE SESSION? SPECIFICALLY, WHY HAS SPENDING INCREASED SO MUCH? SINCE FISCAL 1990, IOWA'S GENERAL FUND BUDGET HAS RISEN 66 PERCENT. THE STATE'S POPULATION HAS GROWN ONLY 3.3 PERCENT. NOW, MR. MILLAGE, YOU'VE BEEN CHAIRMAN OF THE APPROPRIATIONS COMMITTEE A FEW YEARS DURING THAT TIME. WHY, AS A GOOD CONSERVATIVE REPUBLICAN, CAN'T YOU GET A HANDLE ON THIS SPENDING?

Millage: I THINK WE DO HAVE A HANDLE ON SPENDING, AND I THINK ONE OF THE THINGS THAT WE'VE DONE IN THE PAST FEW YEARS THAT'S ENABLED US TO GET A BETTER HANDLE ON SPENDING ARE THE INCOME TAX REDUCTIONS THAT WE'VE DONE THAT HAVE SLOWED THE MONEY THAT COMES INTO THE TREASURY DOWN. WE HAVE THREE BASIC AREAS OF GROWTH IN THE STATE GOVERNMENT BUDGET... EDUCATION. EDUCATION IS A PRIORITY OF IOWA, IT'S A PRIORITY OF REPUBLICANS, IT'S A PRIORITY OF DEMOCRATS. EDUCATION IS GOING TO GROW FOR THE K-THROUGH SYSTEM, FOR THE COMMUNITY COLLEGES, AND FOR THE THREE UNIVERSITIES. EDUCATION IS A FAST-GROWING COMPONENT OF THE STATE'S BUDGET; CORRECTIONS... IOWANS WANT TO FEEL SAFE. IOWANS WANT CRIMINALS OFF THE STREETS AND PAYING PENALTIES FOR THE CRIMES THAT THEY DO. WE HAVE BUILT A LOT OF PRISONS, THREE NEW PRISONS IN THE LAST COUPLE OF YEARS. IT COST TENS OF MILLIONS OF DOLLARS TO OPERATE THOSE PRISONS EACH YEAR; AND PROPERTY TAX RELIEF... ONE YEAR ALONE WE PUT $85 MILLION INTO THE SCHOOL FOUNDATION FORMULA, RAISING IT UP SO THAT IOWANS COULD SEE REAL REDUCTIONS ON THEIR PROPERTY TAX BILL. IN THE LAST FOUR YEARS SINCE I'VE BEEN APPROPRIATIONS CHAIRMAN, WE'VE SENT 300 AND SOME MILLION DOLLARS IN PROPERTY TAX RELIEF OUT TO IOWA'S TAXPAYERS. AND THAT COSTS MONEY AND, UNFORTUNATELY, THAT'S PART OF THE BUDGET.

Yepsen: THAT'S ALL FINE AND MOST IOWANS WOULD AGREE WITH THAT. THE PROBLEM IS WHY AREN'T YOU CUTTING SOMETHING ON THE OTHER END? YOU'RE JUST ADDING SPENDING ON. WHY CAN'T YOU GET RID OF PROGRAMS? WHY CAN'T YOU CUT THINGS?

Millage: WE TRIED TO DO THAT LAST YEAR, DAVID. AS I REMEMBER, WE CUT WELL OVER A HUNDRED POSITIONS IN STATE GOVERNMENT THAT WERE NEVER FUNDED. THEY WERE CALLED "VACANT BUT FUNDED, FULL-TIME EMPLOYEES." THOSE THAT HAVE BEEN VACANT FOR MORE THAN A YEAR, HADN'T BEEN FILLED, WE CUT THEM OUT OF THE BUDGET. WE ELIMINATED THAT FUNDING. WE SAVED THOSE DOLLARS. THE GOVERNOR VETOED THAT. SO IF HE'S REALLY SERIOUS ABOUT DOING AWAY WITH PROGRAMS, ABOUT DOING AWAY WITH SOME OF THE UNNECESSARY WASTE IN GOVERNMENT, HE SHOULD GO ALONG WITH GETTING RID OF POSITIONS THAT HAVEN'T BEEN FILLED BUT ARE FUNDED AND ARE USED BY THE DEPARTMENTS FOR OTHER PROGRAMS.

Glover: SENATOR FLYNN, THIS IS A PRETTY INTENSE BATTLE AT THE HILL. THERE'S A LOT OF BACK AND FORTH THAT GOES ON, A LOT OF INTENSITY, EMOTIONAL ARGUMENTS. DO YOU THINK PEOPLE OUTSIDE THE STATEHOUSE CARE ABOUT THESE NUMBERS GAMES?

Flynn: OH, ABSOLUTELY THEY CARE. THIS IS AN IMPORTANT ISSUE TO IOWANS. WE'RE TALKING ABOUT PUBLIC POLICY THAT'S GOING TO AFFECT QUALITY OF LIFE HERE IN THIS STATE. LET'S JUST USE ONE EXAMPLE, THE EDUCATION BUDGET. REPRESENTATIVE MILLAGE TALKS ABOUT THEIR COMMITMENT TO EDUCATION. WHY IS THE REGENTS BUDGET BEING CUT $10 MILLION? WHY ARE THE PRESIDENTS AT THE REGENTS INSTITUTIONS UPSET OVER THE FACT THAT THEY'RE GOING TO HAVE TO RAISE TUITION 12 PERCENT? 12-PERCENT TUITION INCREASES. THAT'S NOT WHAT IOWANS WANT. THEY'RE SENDING THEIR CHILDREN TO THESE INSTITUTIONS, AND THEY EXPECT THE STATE TO BE RESPONSIBLE IN TERMS OF FUNDING THESE INSTITUTIONS IN AN ADEQUATE MANNER.

Glover: REPRESENTATIVE MILLAGE, I THINK YOU WOULD LIKE TO ANSWER THAT.

Millage: I DISAGREE WITH THAT. WE ARE NOT CUTTING THE THREE UNIVERSITIES; WE ARE INCREASING THEIR SPENDING. WHEN YOU LOOK AT THEIR SPENDING LAST YEAR, THEIR SPENDING INCLUDED SALARIES. WHEN YOU INCLUDE SALARIES UNDER THE BUDGET BILL THAT THE HOUSE PASSED TWO DAYS AGO, OR LAST WEEK, WE INCREASED THEIR BUDGET BY OVER $11 MILLION. NOW, IF YOU BUY THE REGENTS ARGUMENT THAT THEIR PROGRAMS WERE CUT BY $9 MILLION AND EACH PERCENT OF TUITION IS ABOUT $2.5 MILLION, THAT MEANS IT TAKES LESS THAN A 4-PERCENT RISE IN TUITION TO MAKE UP FOR THOSE PROGRAMS. LAST YEAR, IN NOVEMBER OF 1999 BEFORE THE EDUCATION BUDGET WAS EVEN DEVELOPED, THE REGENTS RAISED THEIR TUITION 7 PERCENT FOR NEXT YEAR. THEY'RE GOING TO BLAME IT ON THE LEGISLATURE, BUT THEY DID IT BEFORE THE LEGISLATURE EVEN CONVENED. AND WHAT ALSO HAS TO BE SAID THAT IN THE LAST FOUR YEARS, WE HAVE FULLY FUNDED THE REGENTSâ SALARY REQUEST, WE HAVE GIVEN THEM MOST OF THE PROGRAMS THAT THEY'VE ASKED FOR, AND THE LAST FOUR YEARS THEY CONTINUE TO RAISE THEIR TUITION DOUBLE THE COST OF INFLATION. SO I DON'T THINK THAT YOU CAN SAY THAT WHAT THE LEGISLATURE DOES IS GOING TO HAVE AN IMPACT ON THE REGENTS RAISING TUITION. AND I WOULD LIKE TO ADD ONE MORE POINT, AND THAT IS THAT IF YOU BUY THE REGENTSâ ARGUMENT THAT THERE'S $9 MILLION LESS IN THEIR BUDGET, THEN THE REGENTS ARE $4-BILLION INSTITUTION, AND THAT'S LESS THAN 1/4 OF 1 PERCENT OF THEIR TOTAL BUDGET.

Yepsen: SENATOR FLYNN, WHAT ABOUT ALL THAT?

Flynn: WELL, IF YOU BUY INTO THE ARGUMENT THAT WE'RE MOVING MONEY AROUND TO SUGGEST THAT THERE'S AN INCREASE IN EDUCATION SPENDING, THAT'S A SHELL GAME. YES, WE ARE MOVING THE SALARY BILL, A PORTION OF THE SALARY BILL, OVER INTO THE REGENTS' FUNDING, BUT THAT'S JUST SHIFTING DOLLARS; THAT'S NOT REALLY PROVIDING ADDITIONAL DOLLARS TO OFFSET THIS COST OF EDUCATION.

Yepsen: SENATOR, WHAT'S WRONG WITH THE TUITION INCREASE? STUDENTS AT IOWA'S THREE STATE UNIVERSITIES PAY A RATE OF TUITION BELOW THE NATIONAL AVERAGE FOR COMPARABLE INSTITUTIONS. WHY SHOULDN'T THEY PAY MORE?

Flynn: SHOULD THEY HAVE TO PAY 12 PERCENT MORE? THAT'S NOT THE RATE OF INFLATION. THAT'S CERTAINLY NOT THE RATE THAT THE INCREASE IN SPENDING IN ANY AREA IS GOING. WHY SHOULD THE BUDGET PROBLEMS OF THE STATE IOWA BE BORN ON THE BACKS OF COLLEGE-EDUCATED STUDENTS? I DON'T THINK THAT'S FAIR.

Yepsen: MARY?

Bragg: THE DISCUSSIONS ABOUT THE BUDGET AND THE GOOD GUYS AND THE BAD GUYS AND WHO WANTS TO CUT THIS AND THAT, IT ISN'T JUST A MATTER OF A POLITICAL GAME GETTING READY FOR THE FALL, SENATOR FLYNN?

Flynn: WELL, I THINK IT IS PART OF THE POLITICAL GAME. I THINK THAT WHAT WE'RE SEEING HERE IS A LITTLE BIT OF A SHELL GAME. WE'RE MOVING MONIES AROUND IN THE INTEREST OF TRYING TO BE ABLE TO SUGGEST TO THE VOTERS AT CAMPAIGN TIME THAT WE ARE INCREASING BUDGETS. IF YOU LOOK AT THE DIFFERENCES -- THE OVERALL SPENDING BETWEEN THE GOVERNOR'S BUDGET AND THE REPUBLICAN BUDGET THAT WE HAVE CURRENTLY IN THE LEGISLATURE, THERE'S NOT A LOT OF DIFFERENCE IN TERMS OF THE TOTAL SPENDING DOLLARS. THERE IS A SIGNIFICANT DIFFERENCE IN TERMS OF WHERE THAT MONEY IS GOING. THERE IS NOT THE KIND OF RESOURCES BEING DEVOTED TO EDUCATION OR THE CRIMINAL JUSTICE SYSTEM THAT DEMOCRATS THINK ARE IMPORTANT IN TERMS OF THIS CAMPAIGN. AND WE'RE GOING TO SEE -- MY PREDICTION IS THAT BECAUSE OF THE DEFICIENCIES THAT WE'RE SEEING IN THE DEVELOPMENT OF THIS BUDGET PROCESS HERE TODAY IN THIS SESSION, WE'RE GOING TO SEE SUPPLEMENTAL APPROPRIATIONS BILLS THAT ARE GOING TO HAVE TO BE DONE AT THE BEGINNING OF NEXT SESSION, BECAUSE WHAT WE DO IS WE'RE TAKING BILLS THAT WE ARE INCURRING IN THIS FISCAL YEAR AND WE'RE PUTTING THEM IN NEXT YEAR'S DRAWER. THAT'S GOING TO HAPPEN.

Yepsen: MR. MILLAGE?

Millage: FIRST OF ALL, THE SHELL GAME IS BEING PLAYED BY THE GOVERNOR WITH HIS BUDGET, NOT BY THE REPUBLICANS. SALARIES FOR THE THREE UNIVERSITIES ARE ALWAYS IN THE THREE UNIVERSITIES' BUDGETS. RATHER THAN WAITING FOR THE SALARY BILL, WE PUT IT IN THE REGENTS' BUDGET THIS YEAR. THAT'S NOT A SHELL GAME. THAT MONEY WAS GOING THERE TO BEGIN WITH. IT'S GOING THERE EARLIER THIS YEAR, BUT IT'S GOING THERE. THE ULTIMATE SHELL GAME WAS PLAYED BY THE GOVERNOR WHO MOVED FEES INTO THE GENERAL FUND THAT HAVE NEVER BEEN MOVED THERE BEFORE. HE MOVED OFF OF THE GENERAL FUND $28 MILLION IN THE COST OF THE BONDS FOR THE BUILDINGS AT THE UNIVERSITIES. THAT'S $28 MILLION HE JUST MOVES OFF BUDGET AND PUTS INTO AN OFF-BUDGET FUND.

Yepsen: WHAT ABOUT THAT, SENATOR? CLEARLY THE GOVERNOR DOES TAKE $28 MILLION THAT USED TO BE PAID OUT OF THE GENERAL FUND AND HE'S MOVING IT INTO A DIFFERENT FUND, WHICH GIVES HIM $28 MILLION MORE TO SPEND IN THE GENERAL FUND? SHELL GAME?

Flynn: WELL, I DON'T NECESSARILY AGREE.

Yepsen: WHAT DO YOU CALL IT?

Flynn: WELL, LOOK AT WHAT THE REPUBLICANS ARE DOING WITH THE TOBACCO MONEY. THEY'RE MOVING TOBACCO MONEY FROM THE TOBACCO FUND INTO THE GENERAL FUND. SHELL GAME?

Yepsen: HOW COME STATE SPENDING HAS TO GROW 3.5 PERCENT WHEN INFLATION IS ONLY 1 PERCENT?

Flynn: WE'VE IDENTIFIED SOME PRIORITIES IN STATE GOVERNMENT THAT ARE IMPORTANT TO THE PEOPLE OF IOWA. THAT'S THE REAL ANSWER.

Glover: REPRESENTATIVE MILLAGE, YOU MENTIONED EARLIER THAT REPUBLICANS ARE PROUD OF SOME TAX CUTS THEY'VE ENACTED OVER THE PAST FEW YEARS, YET POLLS HAVE SHOWN REPEATEDLY THAT WHEN GIVEN THE OPTION, VOTERS WOULD PREFER THAT TAXES GO TO FUND IMPORTANT PROGRAMS RATHER THAN COME BACK IN TAX CUTS. WHY DON'T REPUBLICANS HEAR THAT MESSAGE?

Millage: WELL, WE'VE HEARD THAT MESSAGE. WE BELIEVE YOU CAN MEET THE PRIORITIES OF IOWANS IN A BUDGET, BUT THAT YOU CAN MEET IT IN A FINANCIALLY RESPONSIBLE WAY. IOWA'S TAX BURDEN IS AMONG THE HIGHEST IN THE COUNTRY. WE NEEDED TO DO SOMETHING ABOUT IOWA'S HIGH INCOME TAX RATE, AND THAT'S WHAT LEAD TO THE 10-PERCENT, ACROSS-THE-BOARD INCOME TAX CUT. RETIRED PEOPLE WERE TELLING US THEY WERE MOVING OUT IOWA TO MOVE TO STATES THAT DON'T TAX PENSIONS, SO WE CREATED A PENSION EXCLUSION SO THAT THE FIRST $5,000 OF PENSIONS, OR $10,000 FOR A MARRIED COUPLE, AREN'T TAXED. WE HEAR LOUD AND CLEAR FROM OUR CONSTITUENTS THAT TAXES ARE TOO HIGH, BUT THEY WANT THEIR PRIORITY PROGRAMS FUNDED, THEY WANT A GOOD EDUCATION SYSTEM, THEY WANT TO BE SAFE IN THEIR COMMUNITY, BUT THEY ALSO WANT A FAIR AND LESS INTRUSIVE TAX BURDEN. WE THINK WE'VE ACCOMPLISHED THAT.

Glover: SENATOR, THERE ARE STUDIES WHICH SHOW THAT IF YOU TAKE STATE AND LOCAL TAXES AND COMBINE THEM, IOWANS PAY A RELATIVELY HEAVY TAX BURDEN. WHAT'S WRONG WITH REDUCING THAT?

Flynn: WELL, I'VE SEEN SOME STATISTICS THAT HAVE COME FROM THE TAXPAYERS ASSOCIATION THAT SUGGEST IF YOU DO COMBINE ALL OF THOSE TAXES: EXCISE TAXES, SALES TAXES, INCOME TAXES, THE WHOLE BASKET OF PROPERTY TAXES, THE WHOLE BASKET OF TAXES THAT WE ALL PAY, THAT WE ARE RIGHT IN THE MIDDLE, THAT WE ARE, BY SOME ESTIMATES, 23RD, 24TH, OR 25TH. WE'VE ADDRESSED THAT ISSUE, $2.1 BILLION IN TAX CUTS THAT HAVE COME THROUGH THE PIPE SINCE I'VE BEEN IN THE LEGISLATURE IN 1995 TO THIS YEAR. $2.1 BILLION, THAT'S A SIGNIFICANT POOL OF RESOURCES FOR THE STATE OF IOWA.

Bragg: SENATOR, ARE THERE DIFFERENCES WITHIN THE DEMOCRATIC CAUCUS ON THE ISSUE OF TAX CUTS THUS FAR, AND WITH HOW THE GOVERNOR STANDS ON THE ISSUE?

Flynn: WELL, WE'RE NOT SURE WHAT WE'RE GOING TO SEE IN TERMS OF TAX CUTS YET BECAUSE WE ARE IN THE MINORITY. WE'RE WAITING FOR A TAX CUT PROPOSAL FROM THE REPUBLICAN LEADERSHIP. I DON'T KNOW, MAYBE REPRESENTATIVE MILLAGE WOULD CARE TO ADDRESS THAT. I'D BE INTERESTED TO SEE WHAT MIGHT BE COMING DOWN THE PIPE. BUT CERTAINLY THE WAY THAT THE BUDGET IS BEING CRAFTED, IT APPEARS AS THOUGH THEY'RE SETTING ASIDE A POOL OF FUNDS FOR A TAX CUT.

Glover: REPRESENTATIVE MILLAGE, YOU'VE BEEN GIVEN AN INVITATION. WHAT'S COMING DOWN THE PIPE?

Millage: WELL, WE'VE ALREADY PASSED ONE TAX CUT, AND THAT WAS THE SALES TAX HOLIDAY FOR CLOTHING IN AUGUST. THAT CARRIES A PRICE TAG OF SEVERAL MILLION DOLLARS. THAT'S AWAITING ACTION IN THE SENATE. WE FULLY EXPECT THAT THERE WILL BE FURTHER IDEAS FOR TAX CUTS AS THE SESSION WINDS DOWN. WE BELIEVE THAT THERE ARE FUNDS AVAILABLE, PERHAPS FURTHER PENSION TAX CUT, PERHAPS SOME TARGETED TAX CREDITS. CERTAINLY WE'RE GOING TO PASS A BILL THAT GIVES TAX CREDITS FOR THE "ACE" PROGRAM, THE ACCELERATED CAREER EDUCATION PROGRAM.

Glover: YOU DON'T HAVE TO GO VERY FAR AROUND THE STATEHOUSE THESE DAYS TO HEAR A LOT OF TALK ABOUT A SPECIAL SESSION. DO YOU THINK THERE'S GOING TO BE A SPECIAL SESSION, REPRESENTATIVE MILLAGE? DO YOU THINK YOU'RE GOING TO BE ABLE TO RESOLVE THESE PROBLEMS BEFORE YOU ADJOURN?

Millage: I THINK IT'S TOO EARLY TO TELL. I THINK THE PROBLEMS ARE SOLVABLE. I THINK THE GOVERNOR HAS TO RECOGNIZE THAT WE HAVE NO INTENTIONS OF BACKING AWAY FROM A 99-CENT SPENDING LIMITATION; WE ABSOLUTELY WILL NOT RAID THE RAINY DAY FUNDS; WE'RE GOING TO PLAY THE GAME OF MOVING TUITION REPLACEMENT OFF-BUDGET. IF HE RECOGNIZES THOSE THREE PRINCIPLES, THOSE THREE CORE PRINCIPLES OF OUR BUDGET, THEN I THINK, YES, IT'S SOLVABLE.

Glover: SENATOR FLYNN, WHAT'S YOUR VIEW? DO YOU THINK THERE ARE WINNERS OR LOSERS IF THERE'S A SPECIAL SESSION THIS SUMMER?

Flynn: WELL, I DISCUSS BUDGET POLICY WITH THE GOVERNOR AND THE GOVERNOR STAFF REGULARLY. THAT'S PART OF MY ROLE AS THE RANKING DEMOCRAT ON THE APPROPRIATIONS COMMITTEE IN THE SENATE. THEY ARE VERY CONCERNED AND WE'VE TALKED AT GREAT LENGTH ABOUT THE PROBLEMS IN THE EDUCATION BUDGET BILL. WE'VE TALKED AT GREAT LENGTH ABOUT THE PROBLEMS IN THE JUSTICE BUDGET BILL. THERE ARE SOME VERY, VERY SIGNIFICANT CONCERNS OF NOT ONLY THE SENATE DEMOCRATS BUT THE GOVERNOR'S OFFICE AS WELL. A SPECIAL SESSION, I DON'T WANT TO DO A SPECIAL SESSION. DO YOU KNOW WHAT THAT COSTS THE TAXPAYERS? $50,000 A DAY. $50,000 A DAY.

Glover: BUT YOU'RE GOING TO HAVE TO DO A SPECIAL SESSION?

Flynn: I HOPE NOT.

Yepsen: WELL, SENATOR, WHAT ABOUT THE ARGUMENT I HEAR FROM REPUBLICANS UP THERE THAT THE DEMOCRATS, THE GOVERNOR AND DEMOCRATIC LEGISLATORS, ARE SIMPLY TRYING TO SET THESE GUYS UP. THAT IF THE GOVERNOR RECOMMENDS YOU SPEND $10 ON A PROGRAM AND THEY WANT TO SPEND 9, YOU'RE GOING TO CALL CUTS AND FOUL AND CALL THEM INSENSITIVE AND THAT THEY LACK COMPASSION. ISN'T THERE A POLITICAL GAME GOING ON HERE WHEREBY THE DEMOCRATS ARE TRYING TO SET UP THE REPUBLICANS TO TAKE CONTROL OF THE LEGISLATURE IN NOVEMBER?

Flynn: I DON'T THINK SO. I DON'T BELIEVE THAT THAT'S FAIR BECAUSE I DON'T SEE THAT COMING FROM THE PUBLIC AT LARGE.

Yepsen: THERE'S NO POLITICS IN ANY OF THIS?

Flynn: WELL, THERE'S ALWAYS POLITICS IN THE IOWA STATEHOUSE. YOU KNOW THAT AS WELL AS I DO, DAVID. THAT'S PART AND PARCEL OF WHO WE ARE AND WHAT WE ARE. BUT LET'S NOT UNDERESTIMATE THE CONFIDENCE THAT PEOPLE HAVE IN THE GOVERNOR'S OFFICE. THE GOVERNOR IS ENJOYING A VERY, VERY STRONG APPROVAL RATING. THE GOVERNOR TOOK THE INITIATIVE TO TAKE THE BUDGET HEARINGS OUT TO THE PEOPLE. THAT WAS THE FIRST TIME THAT EVER HAPPENED THIS YEAR. HE WENT OUT INTO THE COMMUNITIES AND SAID, WHAT IS IT THAT YOU FOLKS NEED? WHERE ARE THE PRIORITIES THAT YOU HAVE IDENTIFIED? THOSE ARE THE PRIORITIES THAT THE GOVERNOR HAS INCLUDED IN HIS BUDGET PLAN.

Bragg: REPRESENTATIVE MILLAGE, WHAT ARE THE CHANCES OF GETTING MORE EQUITABLE FUNDING FOR THE ALTERNATIVE HIGH SCHOOLS IN THIS STATE THAT TAKE CARE OF THE AT-RISK STUDENTS?

Millage: WE FUNDED THAT IN OUR EDUCATION BUDGET. WE FUNDED THAT AT THE SAME DOLLAR AMOUNT THAT THE GOVERNOR HAD PUT INTO HIS BILL, 9.8 MILLION. IT'S PASSED THE HOUSE; IT'S PASSED -- IT WAS PART OF THE EDUCATION BILL THAT PASSED LAST WEEK -- AND IT'S IN THE SENATE NOW. I THINK THE SENATE WANTS TO DO AN ALTERNATIVE FUNDING BILL. I DON'T KNOW THAT THEY WANT TO DO IT AT THE SAME LEVEL AS THE HOUSE REPUBLICANS AND THE GOVERNOR HAD PEGGED IT, BUT I THINK THEY WANT TO DO A BILL. IT JUST MAY NOT BE AS MUCH, AND THAT WILL BE ONE OF THOSE THINGS WE HAVE TO WORK OUT.

Bragg: SENATOR FLYNN?

Flynn: I'M CONFIDENT THAT WE'RE GOING TO HAVE AN ALTERNATIVE SCHOOL FUNDING BILL. BUT AGAIN, IT'S A CONTRAST OF PRIORITIES. I SERVE ON THE WAYS AND MEANS COMMITTEE, AND THE OTHER DAY WE MOVED A BILL OUT THAT'S GOING TO HAVE A FISCAL IMPACT OF $21 MILLION THAT'S GOING TO PROVIDE THE SALES TAX CREDITS TO UTILITIES COMPANIES TO PUT EQUIPMENT IN HERE. NOW, SHOULD THAT PRIORITY BE HIGHER OR LOWER THAN ALTERNATIVE SCHOOLS?

Glover: REPRESENTATIVE MILLAGE, YOU SAID EARLIER THAT ON A TOBACCO BILL THAT'S NOW MOVING THROUGH, SPENDING THE TOBACCO SETTLEMENT MONEY, THAT ABOUT 50 MILLION OF THE 55 MILLION IN THAT BILL IS PRETTY MUCH AGREED TO. WHAT'S DIFFERENT ABOUT THAT BILL THAN THE REST OF THE BUDGET, OR IS IT JUST A REFLECTION AND THE REST OF THE BUDGET IS LIKE THAT TOO?

Millage: I THINK IT'S A REFLECTION OF WHAT THE REST OF THE BUDGET IS LIKE. YOU AGREE WITH THE GOVERNOR IN 90 - 95 PERCENT OF WHAT YOU WANT TO DO, AND THERE'S A DISAGREEMENT ABOUT THE REMAINDER. I THINK THAT'S A TYPICAL BILL.

Glover: WHAT ARE YOU GOING TO DO WITH THAT TOBACCO SETTLEMENT MONEY? IN GENERAL TERMS, WHAT'S THAT MONEY GOING TO GO FOR?

Millage: WELL, THE GOVERNOR AND THE REPUBLICANS HAVE AGREED THAT 9.5 MILLION WILL GO FOR TOBACCO PREVENTION AND CESSATION PROGRAMS. THAT'S AN AGREED-TO PART OF THE BILL. ANOTHER AGREED-TO PART OF THE BILL IS 22 MILLION FOR PROVIDER REIMBURSEMENTS, WHICH IS AN ACCESS-TO-HEALTH-CARE ISSUE THAT A LOT OF PROVIDERS WON'T EVEN TAKE MEDICAID PATIENTS, SO WE UP THEIR PAYMENTS BECAUSE THEY HAVE NOT BEEN KEEPING UP WITH THE COST OF HEALTH CARE OVER TIME. THAT'S AN AGREED-TO PORTION OF IT. SOME SUBSTANCE ABUSE TREATMENT, MONEY FOR SUBSTANCE ABUSE IS AGREED TO. SOME MONEY TO EXPAND THE CHILDREN'S HEALTH CARE PROGRAM TO 200 PERCENT OF THE POVERTY LEVEL, THAT'S BEEN AGREED TO AND IS IN THE BILL. I THINK SOME OF THE REMAINING ISSUES THAT AREN'T RESOLVED ARE THAT YOU GET TECHNICAL, AND IT'S SOMETHING CALLED CONTINUOUS ELIGIBILITY AS FOR MEDICAID RECIPIENTS THAT THEY FALL OFF AND FALL ON. THEY WANT TO JUST KEEP THEM ON ONCE THEY'RE ON. I THINK THERE'S A DIFFERENCE IN AGREEMENTS THERE, BUT MOST OF IT HAS BEEN AGREED TO.

Glover: SENATOR FLYNN, BEFORE THE SESSION BEGAN, THERE WERE A LOT OF PREDICTIONS THAT SPENDING OF THIS TOBACCO SETTLEMENT MONEY WOULD BE ONE OF THE CONTENTIOUS ISSUES THIS LEGISLATURE FACED. WHAT HAPPENED? WHAT FORCED PEOPLE INTO COMPROMISE ON THIS?

Flynn: WELL, THERE WAS GOOD NEGOTIATION ON THE TOBACCO ISSUE. WHEN WE BROUGHT THE HUMAN SERVICES BUDGET BEFORE THE SENATE, THERE WAS A LOT OF DISCUSSION AMONG DEMOCRATS BECAUSE THE HUMAN SERVICES BUDGET APPEARED TO BE SO DRAMATICALLY UNDERFUNDED, BUT THERE WAS A COMMITMENT ON THE PART OF THE REPUBLICAN LEADERSHIP THAT WE WILL BE MOVING DOLLARS FROM THE TOBACCO SETTLEMENT INTO SOME OF THESE NECESSARY PROGRAMS THAT DEMOCRATS CARE DEEPLY ABOUT BECAUSE THEY IMPACT CONSTITUENCIES THAT WE CARE DEEPLY ABOUT. THESE ARE PEOPLE IN IOWA THAT TRULY NEED THESE FUNDS. AND WE SAW, I THINK AS A RESULT OF WHAT REPRESENTATIVE MILLAGE SUGGESTED, WE DID SEE SOME NEGOTIATIONS AND SOME COMPROMISE, AND THERE ARE SOME FUNDS THAT ARE MOVING THROUGH THE HUMAN SERVICES BUDGET AS A RESULT, AND THAT'S A GOOD THING. I VOTED FOR THAT BUDGET AS A RESULT OF THAT.

Bragg: REPRESENTATIVE MILLAGE, WHAT KIND OF SUPPORT IS THERE IN THE HOUSE FOR EITHER ONE OF THE -- EITHER THE VISION IOWA PROGRAM THAT THE REPUBLICANS HAVE SUGGESTED, OR THE MILLENNIUM FUND THAT THE GOVERNOR HAS SUGGESTED, FOR FUNDING THESE MAJOR ENTERTAINMENT ATTRACTIONS, SUCH AS THE AMERICA'S RIVER PROJECT IN DUBUQUE?

Millage: I'M REALLY NOT ABLE TO GAUGE THE SUPPORT FOR THAT PROGRAM. BUT FIRST OF ALL, THE PROGRAM IS THE SAME. ONE IS CALLED THE MILLENNIUM FUND AND ONE IS CALLED THE VISION IOWA PROGRAM; THEY'RE THE SAME PROGRAM BASICALLY. I THINK IT'S TOO EARLY TO TELL BECAUSE WE HAVEN'T SEEN A BILL YET. THE BILL HASN'T BEEN FILED YET IN EITHER THE HOUSE OR THE SENATE. I THINK THERE'S NEGOTIATIONS GOING ON WITH THE GOVERNOR AS TO WHAT NEEDS TO BE IN THAT BILL. I THINK THE HOUSE MEMBERS ARE CONCERNED -- AT LEAST THE HOUSE MEMBERS I'VE TALKED TO ARE CONCERNED THAT IT NOT BE FOR ONE OR TWO COMMUNITIES; THAT IT NOT BE FOR AN ARENA IN DES MOINES AND A RAIN FOREST IN CEDAR RAPIDS TO THE EXCLUSION OF THE REST OF THE STATE. I THINK THAT'S WHY MORE HOUSE MEMBERS WILL ONLY COME ON BOARD, MYSELF INCLUDED, IF THERE IS A CAP, A HARD CAP, ON THE AMOUNT THAT CAN GO TOWARDS ANY ONE PROJECT SO THAT HOWEVER MUCH MONEY IS IN THE FUND, WHETHER IT'S 250 MILLION OR 275 MILLION, THAT IT GO TO THREE OR FOUR OR FIVE, EVEN SIX COMMUNITIES, AND THAT PLACES LIKE DUBUQUE AND SIOUX CITY HAVE A REAL CHANCE TO COMPETE FOR THAT MONEY WITH DES MOINES AND CEDAR RAPIDS.

Yepsen: SENATOR, ARE YOU GOING TO SEE THAT HAPPENS IN THE SENATE?

Flynn: WELL, I HOPE WE DO HAVE A MILLENNIUM FUND OR AN IOWA VISION FUND OR WHATEVER WE WANT TO CALL IT. I DO THINK THAT THIS CONCEPT IS A GREAT IDEA. IT'S A WONDERFUL OPPORTUNITY FOR IOWA TO PUT TOGETHER SOME ATTRACTIONS AND PUT TOGETHER SOME EDUCATIONAL OPPORTUNITIES. THE DUBUQUE EXAMPLE, MARY RAE, IS A GREAT EXAMPLE, AND WE'VE SEEN WHAT THE POSSIBILITIES ARE FROM THAT KIND OF AN EXHIBIT. I'M HOPEFUL THAT WE'LL BE ABLE TO CRAFT THAT.

Glover: REPRESENTATIVE MILLAGE, THE HOUSE HAS PASSED A WATER-QUALITY BILL, WHICH IS SORT OF SETTING THE SORTS OF PROGRAMS YOU WANT TO FUND TO HELP WATER QUALITY IN THIS STATE, IF NOT FINANCED IT. HOW MUCH MONEY WILL GO TOWARDS WATER QUALITY AND THE ENVIRONMENT?

Millage: A LOT MORE MONEY THAN WENT LAST YEAR. WE HAVE CREATED A NEW FUND WITH THE GAMBLING MONEY, AND THAT'S CALLED THE ENVIRONMENT FIRST FUND. WATER-QUALITY MONEY WILL GO FROM UNDER $4 MILLION LAST YEAR TO $7 MILLION THIS YEAR FOR WATER QUALITY ALONE. THAT WILL BE PART OF THE ENVIRONMENT FIRST FUND. SO A MAJOR COMMITMENT IS BEING MADE TO WATER QUALITY. REPUBLICANS DO NOT WANT TO DRINK DIRTY WATER, CONTRARY TO POPULAR BELIEF. WE WANT CLEAN WATER FOR OURSELVES AND OUR CHILDREN AS WELL.

Glover: SENATOR FLYNN, I'LL LET YOU DO YOUR "REPUBLICANS WANT TO DRINK DIRTY WATER" SPIEL. ARE YOU SATISFIED THIS LEGISLATURE IS DOING ENOUGH TO CLEAN THE ENVIRONMENT AND TO PROTECT THE WATERWAYS OF THIS STATE?

Flynn: THE GOVERNOR STARTED OUT THIS LEGISLATIVE SESSION WITH A CHALLENGE TO US THAT WATER QUALITY WAS GOING TO BE A KEY INITIATIVE IN HIS ENVIRONMENTAL AGENDA. IT HAS FOLLOWED THROUGH THROUGHOUT THE LEGISLATIVE SESSION AS BEING A KEY PRIORITY. THERE ARE ALWAYS THINGS THAT WE NEED TO DO IN TERMS OF IMPROVING IOWA'S ENVIRONMENTAL PROTECTION PRACTICES. SOIL CONSERVATION PRACTICES ARE REALLY AT THE TOP OF THE LIST. WATER QUALITY WILL BE DRAMATICALLY IMPACTED BY THE MONEY THAT WE INVEST IN THESE SOIL CONSERVATION PRACTICES. THE REEP PROGRAM IS AN AREA THAT WE COULD ALSO BE DOING SOME GREAT THINGS WITH. THE REPUBLICAN BUDGET FUNDS REEP AT ABOUT HALF OF WHAT THE LAW SAYS IT SHOULD BE. SHOULD BE $20 MILLION; THEY ALLOW $10.5 MILLION.

Yepsen: MR. MILLAGE, I WANT TO GO BACK TO THE EDUCATION QUESTIONS FOR A MOMENT, AND SPECIFICALLY ABOUT COMMUNITY COLLEGES. NOW, I ASKED SENATOR FLYNN ABOUT SHOULDN'T REGENT STUDENTS BE PAYING MORE SINCE THEY PAY RELATIVELY LOW TUITIONS. HOW ABOUT COMMUNITY COLLEGES? AT COMMUNITY COLLEGES IN IOWA, STUDENTS PAY RELATIVELY HIGH TUITIONS WHEN COMPARED TO OTHER COMPARABLE COMMUNITY COLLEGES IN THE REGION. SHOULDN'T WE BE DOING SOMETHING IN IOWA GIVING THE COMMUNITY COLLEGES MORE MONEY SO THAT THEY CAN LOWER TUITIONS AT COMMUNITY COLLEGES?

Millage: ABSOLUTELY. COMMUNITY COLLEGES -- IF YOU LOOK AT THE PER-PUPIL FUNDING FROM STATE DOLLARS, THE REGENTS ARE AT $11,300 PER PUPIL IN STATE SUPPORT. COMMUNITY COLLEGES ARE, LIKE, $2,900 PER PUPIL IN STATE AND PROPERTY TAX SUPPORT. YES, WE NEED TO INCREASE THE FUNDING FOR COMMUNITY COLLEGES. IT'S A TIGHT BUDGET YEAR, BUT WE ARE FUNDING THE COMMUNITY COLLEGES $6 MILLION HIGHER THIS YEAR THAN LAST YEAR IN OUR EDUCATION BUDGET. THAT'S A 4.25-PERCENT INCREASE. USING YOUR INFLATION FIGURE, THAT'S THREE OR FOUR TIMES THE RATE OF INFLATION. YES, COMMUNITY COLLEGES NEED TO HAVE MORE OF THE EDUCATION PIE SO WE CAN HOLD THAT TUITION DOWN.

Glover: WELL, CAN WE TURN THIS TUITION QUESTION SORT OF ON IT'S EAR. ONE OF THE KEY CHARGES THAT DEMOCRATS MAKE IS THAT REPUBLICANS GAVE SOME SMALL TAX CUTS TO PEOPLE AND THEY'RE NOW GETTING IT BACK WITH BIG TUITION INCREASES. WHAT'S YOUR RESPONSE TO THAT?

Millage: MY RESPONSE TO THAT IS THAT THE TAX CUTS ARE NEEDED TO KEEP PEOPLE IN THIS STATE. IOWA, CONTRARY TO WHAT SENATOR FLYNN SAYS, IOWA HAS A HIGH TAX BURDEN. IOWA HAS A HIGH MARGINAL TAX RATE. ONE OF THE WAYS TO ENTICE BUSINESS INTO THIS STATE IS TO HAVE A COMPETITIVE TAX CLIMATE. WE BELIEVE THAT IOWA HASN'T DONE WELL ON THAT FRONT BECAUSE OF OUR HIGH TAXES. WE NEED TO LOWER TAXES, AND I THINK WE'RE REAPING SOME OF THE BENEFIT FROM THAT NOW. WE'RE SEEING ECONOMIC EXPANSION IN THIS STATE; A LOT OF EXISTING BUSINESSES ARE EXPANDING HERE IN IOWA. I THINK PART OF THAT IS BECAUSE WE ARE MAKING OUR TAX RATE MORE COMPETITIVE.

Bragg: SENATOR FLYNN, ONE LAST PURELY POLITICAL QUESTION. WHAT'S YOUR FUTURE, SPECIFICALLY, 2002?

Flynn: WHAT IS MY FUTURE IN TERMS OF MY POLITICAL LIFE? WELL, I DON'T KNOW AT THIS POINT. YOU KNOW, I'M MID-TERM IN TERMS OF MY LEGISLATIVE OPPORTUNITY. I'M NOT UP FOR REELECTION THIS YEAR. I TRULY LIKE POLITICS.

Yepsen: HOW ABOUT RUNNING FOR CONGRESS?

Flynn: WELL, THAT'S ALWAYS SOMETHING THAT I HAVE SAID I WOULD REALLY LIKE TO DO SOMEDAY. BUT AS YOU KNOW, I HAVE A YOUNG FAMILY; I HAVE A YOUNG SON, AND THAT'S AN IMPORTANT PART OF MY LIFE AS WELL. SO UNTIL HE'S READY, I'M NOT GOING TO BE READY.

Yepsen: SENATOR, I HAVE A TIME PROBLEM. WE'RE OUT OF IT. THANK YOU BOTH FOR BEING WITH US TODAY. I APPRECIATE YOU COMING OUT HERE. WELL, ON OUR NEXT EDITION OF IOWA PRESS, OUR FOCUS REMAINS ON THE CURRENT LEGISLATIVE SESSION. JOINING US IS THE SPEAKER OF THE IOWA HOUSE BRENT SIEGRIST HERE TO DISCUSS THE BUDGET AND OTHER ISSUES. THAT'S NEXT SUNDAY AT NOON AND 7:00. DEAN BORG WILL BE JOINING US AT THAT TIME, AND I HOPE YOU WILL AS WELL. UNTIL THEN, I'M DAVID YEPSEN OF THE DES MOINES REGISTER, AND THANKS FOR JOINING US HERE ON STATEWIDE IOWA PUBLIC TELEVISION.

FUNDING FOR IOWA PRESS WAS PROVIDED BY FRIENDS OF IOWA PUBLIC TELEVISION. AND BY THE IOWA BANKERS ASSOCIATION... FOR PERSONAL, BUSINESS, AND COMMERCIAL NEEDS, IOWA BANKS HELP IOWANS REACH THEIR FINANCIAL GOALS. AND BY THE ASSOCIATED GENERAL CONTRACTORS OF IOWA, THE PUBLIC'S PARTNER IN BUILDING IOWA'S HIGHWAY, BRIDGE, AND MUNICIPAL UTILITY INFRASTRUCTURE.