Iowa Public Television

ANNOUNCER: 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.

STATEWIDE IOWA PUBLIC TELEVISION IS CELEBRATING THE 30TH ANNIVERSARY OF "IOWA PRESS," NOW SERVING THE STATE AS IOWA'S LONGEST RUNNING NEWS INTERVIEW PROGRAM. THIS IS THE FRIDAY, MARCH 8 EDITION OF "IOWA PRESS." HERE IS DEAN BORG.

Borg: IOWA GOVERNOR TOM VILSACK, ON WEDNESDAY OF LAST WEEK, CUT NEXT YEAR'S STATE BUDGET, AND ON THURSDAY HE ADDED ADDITIONAL DETAILS. ACTUALLY THE SPENDING PLAN FOR 2003 WASN'T YET OFFICIAL, BUT THE GOVERNOR REVISED DOWNWARD WHAT HE HAD RECOMMENDED IN MID JANUARY. VILSACK REACTED TO THE REALITY THAT THE STATE DOES NOT HAVE ENOUGH REVENUE TO MEET CURRENT AND PROJECTED BUDGET COMMITMENTS. MEANWHILE, LEGISLATORS ARE WORKING NOW TO CRAFT THE LEGISLATION THAT ACTUALLY APPROPRIATES THE MONEY. REPUBLICAN JEFF LAMBERTI OF ANKENY CHAIRS THE SENATE APPROPRIATIONS COMMITTEE. REPRESENTATIVE PAT MURPHY OF DUBUQUE IS THE RANKING DEMOCRAT ON THE HOUSE APPROPRIATIONS COMMITTEE. GENTLEMEN, WELCOME TO "IOWA PRESS."

Murphy: THANK YOU.

Lamberti: THANK YOU.

Borg: AND ACROSS THE TABLE: "DES MOINES REGISTER" POLITICAL COLUMNIST DAVID YEPSEN AND "ASSOCIATED PRESS" STATEHOUSE REPORTER MIKE GLOVER.

Glover: SENATOR LAMBERTI, AS DEAN MENTIONED, THE GOVERNOR HAS PUT A NEW BUDGET PLAN ON THE TABLE. IT'S $142-MILLION PACKAGE. IT TRANSFERS SOME MONEY FROM VARIOUS FUNDS, DIPS INTO THE CASH RESERVE, AND DOES SOME CUTTING. WHAT'S WRONG WITH THE GOVERNOR'S PLAN?

Lamberti: WELL, I THINK AS I START, I WANT TO PREFACE MY COMMENT A LITTLE BIT. AS WE SPEAK TODAY, I'VE HAD LESS THAN 24 HOURS TO LOOK AT THE GOVERNOR'S NEW BUDGET FOR 2003, AND OUR FISCAL BUREAU HAS NOT HAD AN OPPORTUNITY TO GIVE US ANY DETAILS. SO I'M GOING TO BE A LITTLE BIT CAUTIOUS IN WHAT I SAY. I GUESS AS A LOOK AT THE GOVERNOR'S BUDGET FOR 2003, I'M TROUBLED BUT NOT SURPRISED. I THINK WE'RE SEEING ANOTHER SITUATION WHERE THE PRIMARY EMPHASIS IS TRYING TO SHIFT THE PROBLEM OFF INTO ANOTHER YEAR AND NOT DIRECTLY DEAL WITH THE PROBLEM. WE BELIEVE THAT YOU NEED TO -- WELL, IT'S OKAY TO SAY WE MAY HAVE TO SPEND SOME ONE-TIME MONEY. I BELIEVE THAT THE GOVERNOR RELIES TOO HEAVILY ON BUDGET SHIFTS AND ONE-TIME MONEY AS OPPOSED TO TRYING TO MAKE SOME OF THE DIFFICULT DECISIONS THAT NEED TO BE MADE.

Glover: REPRESENTATIVE MURPHY, ISN'T THIS A LITTLE BIT DISINGENUOUS? WE'VE HEARD THE SAME ARGUMENT ABOUT THIS YEAR'S BUDGET: WE'RE RELYING ON ONE-TIME MONEY; WE CAN'T DO THAT; WE'RE PUSHING THE PROBLEM OUT TO THE FUTURE; AND THEN THE LEGISLATURE DID A VERSION OF THAT. ISN'T THAT WHAT'S GOING TO HAPPEN WITH THE NEXT BUDGET, THE LEGISLATURE IS GOING TO DO SOME VERSION OF WHAT THE GOVERNOR PROPOSED?

Murphy: I THINK WE WILL DO A LOT OF WHAT THE GOVERNOR IS PROPOSING. I THINK YOU HAVE TO TAKE A LOOK AT THE BUDGET SITUATION WE'RE IN THOUGH. FOR THE FIRST TIME IN FIFTY YEARS, WE'VE HAD A THREE-YEAR TURN HERE THAT WE HAVE NOT SEEN SINCE THE KOREAN WAR. SO THAT'S CAUSED SOME DIFFICULTY IN REGARDS TO STATE REVENUES. BECAUSE OF THE THAT, THE GOVERNOR DID HAVE TO LOOK AT GOING INTO THE RAINY DAY FUND, LOOKING AT TRANSFERS FROM OTHER FUNDS. AND THEN ALONG WITH THAT, HE ALSO PROPOSED 20 PERCENT OF THOSE -- OF HIS NEW BUDGET, THE NEW PART OF IT, A 20-PERCENT CUT IN SOME STATE SERVICES. THE POINT, THOUGH, THAT I THINK THE GOVERNOR MAKES IN HIS BUDGET, AND I THINK HE MAKES IT VERY CLEAR, IS HE DOES NOT WANT TO HAVE ANY FURTHER CUTS IN EDUCATION, WHETHER IT BE K-12, WHETHER IT BE COMMUNITY COLLEGES, WHETHER IT'S REGENTS INSTITUTIONS OR FOR PRIVATE COLLEGE. ALONG WITH THAT, HE'S ALSO TALKING ABOUT PUBLIC SAFETY, SERVICES TO SEE SENIORS, AND ALSO TO CORRECTIONS AND THOSE AREAS. SO I DON'T THINK WE'LL BE SEEING ANY -- THE GOVERNOR I THINK IS VERY RESOLVED TO MAKING SURE THAT WE GUARANTY THAT THOSE SERVICES STAY AT THE LEVEL THEY ARE AT RIGHT NOW.

Yepsen: MR. MURPHY, IF ALL THAT'S OFF THE TABLE, HOW WILL THIS AFFECT IOWANS? HOW WILL THE AVERAGE IOWAN, OUR VIEWERS HERE, FEEL THIS, SEE THIS, BE AFFECTED BY THIS BUDGET? ANY THOUGHTS ABOUT THAT?

Murphy: WELL, I THINK IOWANS ARE ALREADY SEEING THAT. I THINK YOU CAN TAKE SPEAKER SIEGRIST, HE WAS QUOTED IN YOUR PAPER JUST LAST WEEK TALKING ABOUT THE STATE BEING -- THAT WE'RE UNDERFUNDING AND UNDERSTAFFING SOME AREAS, AND I THINK THAT IS A CONCERN. I THINK THE GOVERNOR'S CONCERN RIGHT NOW, TO MAKE SURE THAT THOSE SERVICES THAT IOWANS DEPEND ON THE MOST, NAMELY EDUCATING OUR KIDS, AS WELL AS IN REGARDS TO HUMAN SERVICES, MAKING SURE THAT WE GUARANTY SERVICES TO THOSE PEOPLE WHO NEED IT THE MOST AND GUARANTEEING PUBLIC SAFETY ARE HIS TOP PRIORITIES IN THIS BUDGET. AND I THINK THAT'S WHAT HE TRIED TO DO IN REGARDS TO THOSE AREAS. SO THERE ARE NO CUTS IN THOSE AREAS, AND HE'S USING THE TRANSFERS AND OTHER PARTS OF THE BUDGET SO THEY'RE NOT AFFECTED.

Yepsen: SENATOR LAMBERTI, SAME QUESTION. KNOWING WHAT YOU DO KNOW, CAN YOU FIND ANY AREAS THAT IOWANS ARE GOING TO SEE OR BE AFFECTED BY THIS BUDGET?

Lamberti: WELL, I THINK THE BIGGEST IMPACT THAT PEOPLE ARE GOING TO SEE IS THAT WE'RE GOING TO CONTINUE TO HAVE MORE YEARS OF BUDGET DIFFICULTIES. THE GOVERNOR'S BUDGET PURPORTEDLY INCREASES SPENDING BY ABOUT 2 PERCENT. AND, OF COURSE, WE ONLY HAVE 1.8-PERCENT REVENUE GROWTH. BUT HE ACHIEVES THAT BY SHIFTING $60 MILLION IN PUBLIC SAFETY TO OUR ROAD-USE TAX FUND AND ABOUT $100 MILLION OR A LITTLE OVER $100 MILLION FOR THE MEDICAID INCREASE TO ONE-TIME FUNDING OFF BUDGET. IF YOU BRING THOSE ITEMS BACK, THE GOVERNOR IS ACTUALLY INCREASING SPENDING IN THE NEIGHBORHOOD OF 5 PERCENT. IT SEEMS TO ME THAT WE CAN'T BE APPROVING A BUDGET THAT INCREASES SPENDING BY NEARLY 5 PERCENT AT A TIME WHEN WE HAVE 1.8 PERCENT REVENUE. AND WHAT THAT'S GOING TO MEAN IS THAT IF WE DON'T GET A HANDLE ON THIS AND EXERCISE SOME FISCAL DISCIPLINE, WE'RE GOING TO CONTINUE TO STRUGGLE WITH TIGHT BUDGETS FOR NEXT THE SEVERAL YEARS.

Yepsen: WHAT ABOUT THAT, MR. MURPHY? ARE WE PLAYING BUDGET GAMES HERE? SMOKING MIRRORS? YOU'RE SPENDING 5 PERCENT?

Murphy: WELL, FIRST OF ALL, YOU'RE IN A VERY TOUGH BUDGET SITUATION. IT'S THE FIRST TIME THAT -- AS I MENTIONED ALREADY, STATE SPENDING, IT'S THE LOWEST SPENDING IN A THIRTY-YEAR PERIOD. OUR REVENUE IS DOWN FOR THE FIRST TIME THIS LOW IN FIFTY YEARS. AND THIS IS THE LOWEST AMOUNT OF INCOME THAT THE STATE HAS RECEIVED IN THIRTY YEARS. BUT ALONG WITH THAT, I THINK THE OTHER ISSUE THAT YOU HAVE TO TAKE A LOOK AT IS WHEN WE DEALT WITH THE MEDICAID BUDGET, WHEN WE HAD TO DO THE SUPPLEMENTAL HERE ABOUT A MONTH AGO, DEMOCRATS PROPOSED NOT CUTTING ANY SERVICES AT ALL AND PROPOSED $61 MILLION FOR MEDICAID. AND THE MONEY THAT WE USED WAS FROM THE TOBACCO FUNDS AND FROM THE LONG-TERM CARE TRUST FUND AND THE UPPER PAYMENT LIMIT. SO THE BOTTOM LINE THERE WAS, DAVID, WE WERE ACTUALLY TRYING TO GUARANTY SERVICES, AND THOSE WERE ONE-TIME MONEYS AS WELL.

Yepsen: SENATOR LAMBERTI, WILL IOWANS SEE ANY PROGRAMS BE ELIMINATED? THIS IS THE THIRD YEAR YOU GUYS HAVE WRESTLED WITH A TOUGH BUDGET. IT SEEMS TO BE SHRIVELED AND SHRUNK AND SQUEEZED, TIGHTENED EXISTING PROGRAMS. ARE WE AT THE POINT NOW WHERE LAWMAKERS ARE ACTUALLY GOING TO GO IN AND START GETTING RID OF SOME PROGRAMS? ARE THERE ANY THINGS YOU CAN THINK OF THAT WILL JUST GO AWAY IN STATE GOVERNMENT?

Lamberti: WELL, IT'S INTERESTING BECAUSE, AS I LOOK AT HOW WE'RE GOING TO DEAL WITH THIS BUDGET, I THINK ONCE AGAIN WE'RE KIND OF BACK TO WHERE WE'VE BEEN FOR THE LAST COUPLE YEARS, AND THAT IS, ESSENTIALLY ALL THE TOUGH DECISIONS HAVE TO BE MADE BY THE LEGISLATURE. THE GOVERNOR IS NOT TAKING THE LEAD ON TRYING TO SOLVE THIS PROBLEM. ONE OF THE FRUSTRATIONS WE HAVE IS WHEN WE TRY TO ELIMINATE PROGRAMS, WHEN WE GET NO ASSISTANCE FROM THE GUY AT THE TOP, IT'S AWFUL DIFFICULT FOR THE LEGISLATURE ON ITS OWN TO ELIMINATE PROGRAMS. WE HAD THE DIRECTOR OF THE DEPARTMENT OF HUMAN SERVICES IN ASKING TO PRIORITIZE PROGRAMS: WAS THERE A PROGRAM WE COULD LOOK TO ELIMINATE TO HELP EASE THE BUDGET CRUNCH ELSEWHERE? AND THE RESPONSE WAS THAT THERE IS NOTHING IN THAT ENTIRE MASSIVE HUMAN SERVICES BUDGET THAT CAN BE ELIMINATED. AT THE SAME TIME WE HAVE DIRECTED SOME OF OUR BUDGET PEOPLE TO TRY TO FIND SOME THINGS TO ELIMINATE.

Glover: LET'S GO BACK TO SQUARE ONE THOUGH. WILL YOU, IN FACT, IN SOLVING THIS BUDGET PROBLEM, DO SOME COMBINATION OF DIPPING INTO THE RESERVE, SHIFTING MONEY FROM OTHER FUNDS, AND SOME CUTS IN SELECTED STATE AGENCIES? WILL THAT BE -- SOME VERSION OF THE THAT BE YOUR SOLUTION?

Lamberti: I THINK YOU WILL HAVE TO LOOK AT SOME VERSION OF THAT --

Glover: SO YOU'RE GOING TO DO SOMETHING LIKE WHAT THE GOVERNOR WANTS, BUT A LITTLE BIT DIFFERENT NUMBERS?

Lamberti: WELL, I THINK IT'S GOING TO BE SUBSTANTIALLY DIFFERENT BECAUSE, AS I LOOK AT MY INITIAL READ OF THE GOVERNOR'S BUDGET, WE ARE LITERALLY TALKING ABOUT $240 MILLION IN ONE-TIME SHIFTS. WE BELIEVE THOSE KINDS OF THINGS SHOULD BE THE LAST RESORT, NOT THE FIRST OPTION.

Borg: MR. MURPHY, LET'S LOOK AT IT FROM A DIFFERENT ANGLE. THE QUESTION I'M GOING TO ASK IS: HAVE WE CUT TAXES TOO MUCH? I MEAN THIS BASICALLY IS A REVENUE PROBLEM, AND YOU'VE SAID WE GO ON YEAR AFTER YEAR REACTING TO THIS. AND ARE OUR NEEDS ACTUALLY THE LOWEST IN THIRTY YEARS? IS IT TIME TO RAISE TAXES?

Murphy: WELL, FIRST OF ALL, TO ANSWER YOUR QUESTION, NO, WE DO NOT NEED TO RAISE TAXES. WE HAVE $233 MILLION IN THE CASH RESERVE FUND. WE HAVE $90 MILLION IN THE ECONOMIC EMERGENCY FUND IF WE DO THE GOVERNOR'S BUDGET. SO WE HAVE FUNDS THAT ARE AVAILABLE THERE THAT WERE BUILT FOR THIS PURPOSE, SO I DON'T THINK -- I THINK THAT'S DEFINITELY OFF THE TABLE DURING THIS SESSION. WE WILL NOT BE RAISING TAXES, PERIOD. ON THE OTHER POINT THOUGH, TOO, IN REGARDS TO WHAT SENATOR LAMBERTI DISCUSSED ON THE LAST QUESTION THERE, I WOULD LIKE TO POINT OUT THAT LAST YEAR, WHEN THE GOVERNOR SUBMITTED HIS BUDGET, HE DID HAVE PROPOSALS THAT CAME FORWARD, TALKING ABOUT ELIMINATIONS OF SOME PROGRAMS. THE LEGISLATURE FAILED TO REACT TO ANY OF THOSE AND, INSTEAD, CONTINUED TO RATCHET DOWN STATE GOVERNMENT. A GOOD EXAMPLE IS TAKING THE DEPARTMENT OF HUMAN SERVICES WHERE, INSTEAD OF GIVING THEM $7 MILLION FOR THE CENTRAL AGENCY, WE GAVE THEM $5 MILLION. SO INSTEAD OF HAVING 360 EMPLOYEES, THEY COULD ONLY STAFF ABOUT 270 OR 280 EMPLOYEES.

Borg: MR. LAMBERTI --

Murphy: SO I THINK THAT'S SOMETHING PEOPLE NEED TO REMEMBER.

Borg: BACK TO THAT QUESTION I ASKED. IS IT TIME TO PUT A TAX INCREASE ON THE TABLE, KNOWING THAT IT MAY NOT PASS THIS TIME BUT GET THE IDEA OUT THERE?

Lamberti: NO, I -- NUMBER ONE, IN RECESSIONARY TIMES, THE WORST THING YOU CAN DO IS RAISE TAXES. BUT BEYOND THAT, I'VE BEEN ASKED THAT QUESTION A LOT. WE HAVE, QUITE FRANKLY, A LOT OF MEMBERS IN THE LEGISLATURE WHO WANT TO ASSERT THAT WE'VE CUT TAXES TOO MUCH AND THAT'S THE -- WHAT HAS PUT US INTO THIS TIGHT BUDGET SITUATION. I REJECT THAT. WHAT I TELL PEOPLE IS, ON THE SURFACE THAT MAKES A GREAT POLITICAL ARGUMENT, BUT WHEN YOU EXAMINE THE FACTS, IT MAKES A TERRIBLE INTELLECTUAL ARGUMENT. SOME OF THE FACTS ARE, AS YOU LOOK AT THE TEN-YEAR TIME PERIOD FROM 1990-2000, THE POPULATION IN IOWA GREW BY ABOUT 5 PERCENT; INFLATION WAS UP BY ABOUT 32 PERCENT; STATE SPENDING WAS UP BY 55 PERCENT. IF YOU STRETCH THAT OUT TO A TWENTY-YEAR PERIOD, IT'S EVEN WORSE. WE'VE GROWN STATE GOVERNMENT AT TWICE THE RATE OF INFLATION. WE DON'T HAVE A REVENUE PROBLEM; WE HAVE A SPENDING PROBLEM. I THINK IT'S ALSO INTERESTING, IN 1995, MY FIRST YEAR IN THE LEGISLATURE, WE STARTED TO AGGRESSIVELY REDUCE TAXES. BUT AS WE LOOK 1995 TO 2002 AND SPREAD THE GENERAL FUND REVENUE, THE AMOUNT THAT THE STATE TAXES PEOPLE, FOR EVERY MAN, WOMAN, AND CHILD THROUGHOUT THE STATE, THEY PAY MORE IN TAXES TODAY THAN THEY PAID IN 1995. SO AGAIN, WE DON'T HAVE A REVENUE PROBLEM, WE HAVE A SPENDING PROBLEM.

Glover: SENATOR LAMBERTI, LET'S LOOK AT SOME OF THE AREAS THAT WE ASKED REPRESENTATIVE MURPHY ABOUT THAT THE GOVERNOR HAS TAKEN OFF THE TABLE. HE HAS TAKEN OFF THE TABLE, IN TERMS OF FURTHER CUTS, ELEMENTARY AND SECONDARY EDUCATION, COMMUNITY COLLEGES, AND THE REGENTS. HE'S HOLDING THEM HARMLESS FROM FURTHER CUTS. THAT'S ABOUT 60 PERCENT OF THE STATE BUDGET. CAN YOU SOLVE THIS PROBLEM WITH THOSE PROGRAMS OFF THE TABLE?

Lamberti: I THINK IT WOULD BE VERY DIFFICULT TO SOLVE IT BY TAKING THOSE COMPLETELY OFF THE TABLE. BUT WITH THAT SAID, WE CERTAINLY AGREE WITH THE GOVERNOR THAT WE WANT TO FUND OUR PRIORITIES. OUR PRIORITY WOULD BE, NUMBER ONE, WOULD BE K-12 EDUCATION. AFTER THAT IT'S REALLY LOOKING AT THE MEDICAID PROBLEM, TAKING CARE OF THE NEEDY PEOPLE WHO ARE ON THAT PROGRAM.

Glover: SO WHAT YOU'RE SAYING IS ELEMENTARY AND SECONDARY EDUCATION IS OFF THE TABLE, REGENTS AND COMMUNITY COLLEGES ARE ON THE TABLE?

Lamberti: THEY COULD POSSIBLY ON THE TABLE. WE'D LIKE TO DO OUR BEST ON THOSE AS WELL, BECAUSE WE BELIEVE HIGHER EDUCATION IS A PRIORITY. BUT AS I LOOK AT THE GOVERNOR'S BUDGET, THE SINGLE BIGGEST ITEM OF SPENDING INCREASE IN HIS BUDGET IS NOT K-12 EDUCATION. IT'S NOT COMMUNITY COLLEGES. IT'S NOT THE REGENTS INSTITUTIONS. IT'S STATE SALARY INCREASES FOR STATE EMPLOYEES. SO I THINK -- THAT TELLS ME THAT WE NEED TO DO SOME ADJUSTMENT OF PRIORITIES. IF EDUCATION IS OUR PRIORITY, THEN LET'S MAKE IT OUR PRIORITY. WE ARE WILLING TO WORK WITH THE GOVERNOR TO DO THAT.

Glover: REPRESENTATIVE MURPHY, ALL THREE OFF THE TABLE? ELEMENTARY/SECONDARY, COMMUNITY COLLEGES, AND REGENTS?

Murphy: YES. I WOULD AGREE THAT WHEN IT COMES TO DEMOCRATS IN THE GOVERNOR'S OFFICE, WE WANT TO PROTECT THOSE AREAS OF EDUCATION. I THINK STILL THINK, THOUGH, THE GOVERNOR PUTS 60 MILLION NEW DOLLARS INTO EDUCATION IN THIS BUDGET. IN REGARDS TO WHETHER IT'S A REVENUE PROBLEM OR A SPENDING PROBLEM, IT IS A REVENUE PROBLEM. STATE RECEIPTS ARE DOWN, THE LOWEST POINT THEY HAVE BEEN IN FIFTY YEARS. SO I MEAN PEOPLE ARGUE THAT IT'S A SPENDING PROBLEM, BUT THE BOTTOM LINE IS THE STATE STILL HAS TO CONTINUE TO PROVIDE SERVICES TO INDIVIDUALS, WHETHER IT'S EDUCATION OR HUMAN SERVICES OR AREAS INVOLVED IN THE ENVIRONMENT. IT'S HARD TO SAY THAT IT'S A SPENDING PROBLEM WHEN YOUR REVENUE GROWTH IS NEGATIVE 0.7 BY THE REVENUE ESTIMATING CONFERENCE, BECAUSE YOU'RE ACTUALLY TAKING IN LESS DOLLARS THAN YOU DID THE YEAR BEFORE. AND WHEN YOU TAKE A LOOK AT THE GOVERNOR'S BUDGET, THE BUDGET FOR THIS FISCAL YEAR THAT WE'RE IN RIGHT NOW SPENDS 4.6 BILLION. IF YOU LOOK AT FISCAL YEAR 2001, WE SPENT $4.8 BILLION, SO WE'RE ACTUALLY SPENDING LESS IN '02, FOR THE FISCAL YEAR WE'RE IN RIGHT NOW, THAN WE DID FOR '01. SO WE ARE RESTRICTING OUR SPENDING.

Yepsen: YOU ACCOMPLISHED THAT BY SHIFTING FUNDS. YOU'RE SHOVING COSTS OVER TO, SAY, THE ROAD FUND.

Murphy: WELL, FOR EXAMPLE --

Yepsen: WELL, COME ON. ISN'T THAT A LITTLE GAME OF BUDGET TRICKERY WHEN YOU MAKE THE GENERAL FUND LOOK GOOD BY TAKING SOME OF THIS SPENDING OUT OF IT AND PUTTING IT INTO THE ROAD FUND?

Murphy: IN 1991 AND 1992, THE LEGISLATURE --

Yepsen: I KNOW IT'S BEEN DONE BEFORE, MR. MURPHY, BUT I'M ASKING YOU ISN'T THAT A GAME OF BUDGET TRICKERY.

Murphy: IF YOU LOOK BACK TO 1997 AND 1998, BEFORE WE MADE THE TRANSFER, THE STATE TROOPERS USED TO BE IN -- AND TECHNICALLY, IT'S NOT THE ROAD FUND. THE GOVERNOR IS USING USE TAX DOLLARS, WHICH IS THE SALES OF CARS AND AUTOMOBILES. IT'S NOT THE ROAD USE TAX FUND, BECAUSE THAT'S CONSTITUTIONALLY PROTECTED. BUT THE GOVERNOR IS USING WHAT THEY DID UP UNTIL 1996, WHICH WAS PAID FOR STATE TROOPERS OUT OF THE USE TAX. AND THAT'S WHAT HE'S PROPOSING AGAIN THIS YEAR.

Yepsen: NOW, I WANT TO PURSUE THAT EDUCATION QUESTION A MINUTE. MR. MURPHY, 60 PERCENT OF THE STATE BUDGET GOES FOR EDUCATION. YOU'RE SAYING THOSE NO EFFICIENCIES IN EDUCATION, NO SAVINGS, NOWHERE IN THE WHOLE EDUCATIONAL SYSTEM OF THIS STATE TO FIND ANY SAVINGS; IS THAT CORRECT?

Murphy: WELL, DAVID -- DAVID, WHEN WE WENT THROUGH THE 4.3-PERCENT ACROSS-THE-BOARD CUT, WE HELD THEM HARMLESS TO A CERTAIN EXTENT. BUT I'LL TELL YOU RIGHT NOW, SOME OF THEM HAVE TAKEN DRASTIC MEASURES WITH THE CUTS THAT HAVE BEEN PROPOSED IN THE PAST. AND A LOT OF THE DECISIONS IN REGARDS TO EDUCATION, WE ALLOCATE THE MONEY BUT THE DECISIONS ARE MADE AT THE LOCAL SCHOOL BOARDS BECAUSE WE DO ALLOW LOCAL CONTROL IN REGARDS TO SCHOOL DISTRICTS. SO A LOT OF THOSE DECISIONS HAVE BEEN MADE AT THE LOCAL LEVEL. AND THE OTHER PART YOU HAVE TO REMEMBER IS THAT 17 PERCENT -- THE ANNIE E. CASEY FOUNDATION THIS WEEK JUST RELEASED THAT 17 PERCENT OF THE KIDS LIVE IN POVERTY IN THIS COUNTRY. IN IOWA, IT'S AROUND 20 PERCENT. EDUCATION IS THE ONE AREA WHERE WE CAN IMPROVE, WHERE PEOPLE DEPEND ON THAT TO EDUCATE THEIR KIDS. IT'S USED -- EDUCATION IS USED IN WAYS THAT IT NEVER WAS WHEN YOU AND I WENT TO SCHOOL, WHERE THEY HAVE AFTER-CARE PROGRAMS, EARLY MORNING BREAKFASTS, EARLY MORNING PROGRAMS AS WELL. SO I THINK, WITHOUT A DOUBT, WE HAVE TO PROTECT EDUCATION BECAUSE THE BOTTOM LINE IS THAT IS THE STRONGEST RESOURCE WE HAVE IN THE STATE. WE NEED TO MAKE SURE THAT WE HOLD K-12 HARMLESS FROM ANY FURTHER CUTS. WE NEED TO MAKE SURE THAT SCHOOL DISTRICTS CAN DO THE JOB THEY CAN WITHOUT LAYING OFF TEACHERS OR SUPPORT STAFF. SO I DON'T SEE WHERE WE CAN.

Yepsen: SENATOR LAMBERTI, YOU SAID A MOMENT AGO THAT THE DEPARTMENT OF HUMAN SERVICES HAS TOLD YOU THAT THEY JUST CAN'T SAVE ANY MONEY AT ALL IN THAT AGENCY. DO YOU BUY THAT?

Lamberti: NO, I DON'T BUY THAT. I THINK IT'S A MATTER OF PRIORITIZING WHAT THE DEPARTMENT DOES. WE CERTAINLY AGREE WHEN YOU COME TO CHILD PROTECTION SERVICES AND THINGS LIKE THAT, THAT NEEDS TO BE ON THE HIGH SIDE OF OUR PRIORITY LIST. AND OF COURSE, MEDICAID AND THOSE SERVICES FOR THE NEEDY FALLS WITHIN THAT BUDGET, AND WE'RE GOING TO WORK HARD TO MAKE SURE THAT WE MEET OUR OBLIGATIONS THERE. BUT TO SAY THAT THERE'S NO PROGRAM IN THE DEPARTMENT OF HUMAN SERVICES THAT CANNOT BE ELIMINATED, I FIND THAT HARD TO BELIEVE.

Glover: OKAY, SENATOR LAMBERTI, WHAT DO YOU WANT TO ELIMINATE IN THE DEPARTMENT OF HUMAN SERVICES? WHAT SERVICES DO YOU NOT WANT TO PROVIDE TO IOWANS?

Lamberti: WELL, I THINK THAT AS YOU LOOK AT THE DEPARTMENT OF HUMAN SERVICES, IT'S A MASSIVE --

Glover: WELL, LET'S NAME A PROGRAM YOU DON'T WANT TO DO.

Lamberti: WELL, WHAT I HAVE DONE -- AS APPROPRIATIONS CHAIR, I HAVE ESSENTIALLY NINE BUDGET SUBCOMMITTEES THAT REPORT TO ME. IT'S MY JOB TO ASK MY BUDGET SUBCOMMITTEE CHAIRS TO GO IN, DEMAND PRIORITIZATION, AND LET THEM MAKE RECOMMENDATIONS BACK TO ME FOR PROGRAMMING --

Glover: AND WHAT HAVE THEY RECOMMENDED ELIMINATING?

Lamberti: WELL, THEY HAVEN'T YET BECAUSE WE JUST --

Glover: SO YOU DON'T HAVE ANY PROGRAMS TO ELIMINATE EITHER.

Lamberti: WE ARE GOING TO MAKE THAT ATTEMPT, BUT IT'S AWFUL HARD WHEN YOU GET NO COOPERATION.

Glover: WELL, IT'S A FAIRLY CHEAP SHOT TO TELL US THAT THE HEAD OF THE DEPARTMENT OF HUMAN SERVICES DOESN'T HAVE ANYTHING SHE CAN ELIMINATE WHEN YOU DON'T EITHER.

Lamberti: WELL, WE -- I'VE HAD THE GOVERNOR'S BUDGET LESS THAN 24 HOURS, SO I THINK THAT'S NOT REALLY A FAIR ANALYSIS. BUT TO ACTUALLY HAVE A DEPARTMENT HEAD WHO EVEN REFUSES TO PRIORITIZE PROGRAMS FOR US REALLY IS TELLING, I THINK, ABOUT THE COOPERATION.

Yepsen: MR. MURPHY, I WANT TO FLIP MIKE'S QUESTION AROUND. THE DEPARTMENT OF HUMAN SERVICES -- WELFARE ROLLS ARE LESS THAN HALF OF WHAT THEY USED TO BE IN THE STATE. NOW, ARE DEMOCRATS SAYING THERE'S NO PLACE IN THE DEPARTMENT OF HUMAN SERVICES TO MAKE CUTS?

Murphy: WELL, HERE'S THE POINT I'D LIKE TO MAKE. FIRST OF ALL, IN REGARDS TO MAKING DECISIONS, THE BUDGET SUBCOMMITTEES JUST STARTED MEETING IN THE LAST TWO WEEKS. IF WE WERE REALLY SERIOUS ABOUT LOOKING AT AREAS WHERE WE COULD STREAMLINE STATE GOVERNMENT, I THINK WE PROBABLY SHOULD HAVE STARTED THE BUDGET APPROPRIATION SUBCOMMITTEE PROCESS IN JANUARY.

Yepsen: I UNDERSTAND THAT, BUT MY QUESTION IS NOT A PROCESS QUESTION, MR. MURPHY. IT'S GOING TO THE QUESTION THAT WELFARE ROLLS HAVE BEEN REDUCED; WHY, THEREFORE, CAN WE NOT CUT SOME MORE THINGS OUT OF THE DEPARTMENT OF HUMAN SERVICES?

Murphy: OKAY. IF YOU TAKE A LOOK AT THE DEPARTMENT OF HUMAN SERVICES, IF YOU TAKE A LOOK AT LAST YEAR'S BUDGET, WE WALKED INTO -- WE LEFT THE SESSION LAST YEAR WITH 210,000 PEOPLE ON MEDICAID. THAT'S THE BIGGEST CHUNK OF THE HUMAN SERVICES' BUDGET. NOW, THE PROBLEM YOU HAVE IS WHEN WE LEFT, WE WERE TOLD THAT WE COULD EXPECT TO HAVE SOMEWHERE BETWEEN 230- AND 240,000 PEOPLE ON THOSE ROLLS, SO WE DIDN'T HAVE ENOUGH MONEY THERE TO START WITH AND WE KNEW THAT. THEN BESIDES THAT, YOU HAD THE 4.3-PERCENT ACROSS-THE-BOARD CUT IN JULY -- OR IN NOVEMBER. SO THEY'VE TAKEN THAT CUT AS WELL, AND WE'RE IN THIS TIGHT BUDGET PROCESS. SO THAT'S WHY WE ENDED UP COMING IN AND HAVING TO DO AN ADDITIONAL $61 MILLION. I DON'T SEE WHERE YOU CAN ASK -- AND THIS IS THE OTHER PART PEOPLE NEED TO REMEMBER. THE DEPARTMENT HUMAN SERVICES PROVIDES A LOT OF SERVICES THAT NOBODY ELSE PROVIDES, AND THEN WE ALSO REIMBURSE STATE AGENCIES TO DO SOME OF THOSE JOBS, SO IT'S VERY DIFFICULT TO MAKE CUTS.

Borg: I NEED TO MOVE ON BECAUSE WE'RE RUNNING SHORT -- MR. LAMBERTI, DO THE SAME FOR THE DEPARTMENT OF PUBLIC SAFETY. IF THE GOVERNOR EVER HOLDS THAT HARMLESS, CAN YOU FIND SOME AREAS WITHIN PUBLIC SAFETY TO CUT?

Lamberti: THAT WOULD NOT BE OUR FIRST AREA TO LOOK, PARTICULARLY IN THESE TIMES WITH THE AFTERMATH OF THE EVENTS OF SEPTEMBER 11. THAT WILL BE ONE OF OUR PRIORITIES AS WELL, AFTER EDUCATION, TO TRY TO HOLD THAT DEPARTMENT AND THAT AREA HARMLESS TO THE EXTENT WE CAN. BUT AGAIN, THE GOVERNOR HAS MADE THAT A FAIRLY DIFFICULT PROPOSITION FOR US BECAUSE HE'S MOVED THE DEPARTMENT OF PUBLIC SAFETY TO THE ROAD USE FUND. SO NOW I'VE GOT A $60-MILLION HOLE IN THE BUDGET THAT HE'S MOVED TO THE ROAD FUND. AND I DON'T, QUITE FRANKLY, SEE ANY WILLINGNESS FROM EITHER CHAMBER, EITHER PARTY, TO WANT TO GO THERE. SO ALL THAT'S DONE IS CREATED ANOTHER PROBLEM FOR US.

Glover: SENATOR LAMBERTI, IF YOU DON'T DO THE TRANSFERS INTO THE ROAD FUND, WHERE DO YOU GET THAT $60 MILLION?

Lamberti: WE HAVE TO DO IT THROUGH A COMBINATION OF CUTS -- ADDITIONAL CUTS BEYOND WHAT THE GOVERNOR HAS PROPOSED. WE HAVE NOT RULED OUT, AS I INDICATED EARLIER, THAT WE MAY HAVE TO TRANSFER SOME ONE-TIME MONEYS TO SOLVE SOME OF THESE BUDGET PROBLEMS.

Glover: IS THE ROAD FUND ITSELF OFF THE TABLE COMPLETELY?

Lamberti: I SUSPECT IT IS. WE VISITED THAT ISSUE LAST YEAR. IN FACT, WE EVEN BROUGHT IT TO A VOTE IN A SIMILAR MANNER LAST YEAR TO THE FLOOR OF THE SENATE, AND IT GOT A TOTAL OF, I THINK, TWO VOTES. SO I DON'T BELIEVE THERE'S A LOT OF WILLINGNESS TO DO IT, SO WE'RE GOING TO PUT OUR BUDGET TOGETHER WITHOUT THAT.

Glover: REPRESENTATIVE MURPHY, AS SENATOR LAMBERTI SAID, THERE'S NOT A LOT OF INTEREST IN THE LEGISLATURE IN USING THAT ROAD FUND MONEY. IF YOU DON'T USE THAT, WHERE DO YOU GO?

Lamberti: WELL, I WOULDN'T RULE IT OUT YET. I THINK WE HAVE TO SERIOUSLY LOOK AT THE GOVERNOR'S BUDGET AND INCORPORATE AS MANY OF THOSE PARTS OF HIS PROPOSALS INTO OUR BUDGET. IN 1991 AND 1992, THE SAME SITUATION WHERE WE HAD A TIGHT BUDGET, REPRESENTATIVE TOM YOKUM, WHO WAS CHAIR OF THE APPROPRIATIONS COMMITTEE, OFFERED AN AMENDMENT IN THE HOUSE. SOMETIMES YOU HAVE TO BRING PEOPLE TO THAT POINT WHERE THEY HAVE TO START MAKING DECISIONS ON WHAT'S GOING TO BE CUT AND WHETHER OR NOT WE'RE GOING TO -- WHETHER OR NOT WE'RE GOING TO FUND IT. AND IT MAY BE A CHOICE BETWEEN SERVICES, YOU KNOW, PUBLIC SAFETY OR CONCRETE OR CHILDREN AND CONCRETE. AND THAT'S WHAT HAPPENED IN 1991. IT WAS A 51 TO 48 VOTE. BUT WE DID TAKE MONEY OUT OF THE USE TAX THAT YEAR FOR THAT PURPOSE.

Yepsen: MR. MURPHY, MOVING ALONG, WE'VE GOT A COUPLE OF OTHER THINGS WE WANT TO ASK YOU ABOUT. COURT SYSTEM... HOW WILL THIS BUDGET PROPOSAL AFFECT THE COURT SYSTEM? THERE'S BEEN A LOT OF CONCERN, PARTICULARLY IN RURAL IOWA, THAT YOU'RE TRYING TO GET RID OF CLERKS OF COURT AND THAT SORT OF THING. WHAT HAPPENS TO THE COURT SYSTEM?

Murphy: WELL, THAT'S A UNIQUE PROBLEM, JUST STRICTLY BECAUSE IT'S A SEPARATE BRANCH OF GOVERNMENT. THE GOVERNOR JUST PASSES THAT BUDGET THROUGH THE LEGISLATURE. I KNOW THERE'S LEGISLATORS, ESPECIALLY THE ONES IN THE RURAL AREAS, THAT ARE CONCERNED ABOUT THE CLERK OF COURT SYSTEMS. WE'LL HAVE TO GRAPPLE WITH THAT IN THE BUDGET SUBS AS IT COMES UP, BUT I DON'T --

Yepsen: COURTS OKAY?

Lamberti: NO, I'VE GOT SOME CONCERNS ABOUT THE COURT SYSTEM. I THINK THE CHIEF JUSTICE, WHILE A LOT OF PEOPLE DIDN'T AGREE WITH HIS REORGANIZATION PLAN, CERTAINLY POINTED OUT THAT THERE ARE SOME INEFFICIENCIES IN OUR SYSTEM. I MEAN, WE HAVE JUDICIAL DISTRICTS AND SOME THINGS THAT ARE FAIRLY ANTIQUATED. I THOUGHT IT WAS TELLING WHEN HE SAYS, "WE HAVE ENOUGH JUDGES BUT WE CAN'T GET THEM TO WHERE WE NEED THEM." SO I THINK WHAT WE NEED TO DO IS TO TRY TO ASSIST HIM, BEING SENSITIVE TO THE CONCERNS OF THE RURAL FOLKS, BUT TO ALLOW HIM TO GET SOME OF THOSE INEFFICIENCIES OUT OF THAT SYSTEM.

Glover: SENATOR LAMBERTI, ONE OF THE -- OTHER THAN SCHOOLS, ONE OF THE PLACES WHERE IOWANS INTERACT WITH THEIR STATE GOVERNMENT THE MOST IS IN THE STATE PARK SYSTEM. A LOT OF PEOPLE HAVE COMPLAINED THE STATE PARK SYSTEM IS GOING DOWNHILL, MAINTENANCE IS NOT SO HOT, THEY'RE NOT VERY CLEAN, THE TRASH DOESN'T GET PICKED UP. ARE THEY GOING TO FIX THAT?

Lamberti: WELL, I THINK WE'VE PUT A SIGNIFICANT AMOUNT OF RESOURCES IN THE LAST FEW YEARS TO OUR RESTORE THE OUTDOORS PROGRAM, WHERE WE'VE REALLY DONE A LOT IN TERMS OF THE MAINTENANCE -- DEFERRED MAINTENANCE, IMPROVEMENTS AND SO FORTH, TO THE PARKS. AT THE SAME TIME, WE HAVE TO ADEQUATELY FUND THEM TO MAKE SURE THEY CAN MAINTAIN THEM. I THINK PART OF THE DNR REORGANIZATION THAT WILL ACTUALLY GET MORE OF THE PEOPLE INTO THE PARKS IS A WELCOME CHANGE. SO I THINK WE'RE GOING TO BE FINE ON THE PARK SYSTEM.

Borg: SENATOR LAMBERTI, ANY CASH THAT CAN BE RECEIVED FROM SELLING ONE-TIME STATE ASSETS?

Lamberti: I LOOKED AT THE PROPOSED BUDGET THAT THE GOVERNOR HAS JUST RELEASED, AND I THINK HE HAD A HALF MILLION DOLLARS. I'M NOT AWARE OF ANY SIGNIFICANT ASSETS THAT WE CAN DO IN THE SHORT-RUN THAT ARE GOING TO HELP US. SO WHILE IT'S CERTAINLY SOMETHING WE WOULD WANT TO CONSIDER IF IT CAN BE IDENTIFIED, I'M NOT RELYING ON THAT AS WE GO TO PUT TOGETHER THIS BUDGET. I JUST DON'T SEE THAT THAT'S A GREAT OPPORTUNITY FOR US.

Glover: THERE WAS A LOT OF TALK A FEW YEARS AGO ABOUT SELLING THE STATE'S FIBER OPTIC NETWORK. WE DON'T HAVE ANY BUYERS THESE DAYS?

Lamberti: WELL, I THINK WE'VE HAD SOME INTERESTING POTENTIAL ARRANGEMENTS, PARTICULARLY WITH THE FEDERAL GOVERNMENT. AS WE'RE LOOKING AT, AGAIN, THE AFTERMATH OF SEPTEMBER 11, WE'RE THE ONLY STATE THAT REALLY HAS THE CAPABILITY OF PROVIDING SECURE NETWORKS. AND THE FEDERAL GOVERNMENT, I UNDERSTAND, IS LOOKING AT UP TO THREE DIFFERENT SECURED NETWORKS WHERE THEY COULD POTENTIALLY COME IN AND LEASE SOME BAND WITH. THAT WOULD ALLOW US TO CASH FLOW THE THING, BECAUSE IT STILL IS A DRAG ON OUR STATE BUDGET. THERE'S NO DOUBT ABOUT THAT.

Yepsen: MR. MURPHY, I WANT TO ASK YOU ONE POLITICAL QUESTION. WE'VE GOT JUST A MINUTE LEFT. ISN'T THIS WHOLE BUDGET GAME ON EVERYBODY'S PART -- THE GOVERNOR, THE LEGISLATURE -- JUST TRYING TO KICK THIS THING DOWN THE ROAD ANOTHER YEAR SO YOU CAN GET OUT OF THIS SESSION AND GO HOME AND CAMPAIGN?

Murphy: NO, I THINK -- WITH THE GOVERNOR, I THINK WITHOUT A DOUBT, THIS IS SOMETHING THAT HE'S VERY MUCH STAKED A CLAIM THAT THIS BUDGET NEEDS TO HOLD HARMLESS EDUCATION, HUMAN SERVICES, PUBLIC SAFETY, AND SERVICES TO SENIORS. IF IT DOESN'T HAPPEN, I THINK WE COULD BE HERE A LONG, LONG TIME.

Yepsen: SENATOR LAMBERTI, POLITICAL BUDGET?

Lamberti: YES. FOR OVER A YEAR, WE'VE BEEN THE ONES RESPONSIBLE FOR MAKING ALL THE TOUGH CHOICES. AND HERE AGAIN, WE HAVE A BUDGET THAT AGAIN ESSENTIALLY INCREASES SPENDING 5 PERCENT. IT PUNTS ALL OF THE PROBLEMS INTO AT LEAST '04 OR '05. AND I GUESS I WOULD REFER TO THIS AS THE "GET ME THROUGH THE NEXT ELECTION BUDGET."

Borg: SENATOR LAMBERTI, THANK YOU. REPRESENTATIVE MURPHY, THANK YOU FOR BEING WITH US TODAY.

THANK YOU.

Borg: ON OUR NEXT EDITION OF "IOWA PRESS," WE'LL CONTINUE DISCUSSING THE CHALLENGES FACING STATE GOVERNMENT. IOWA GOVERNOR TOM VILSACK WILL BE HERE WITH THE ADMINISTRATION'S PERSPECTIVE. WE'LL GET HIS UPDATE ON BUDGET SPECIFICS, RATIONALE, PERHAPS SOME INSIGHT INTO HIS REELECTION CAMPAIGN STRATEGY. THAT'S NEXT FRIDAY AT 6:30 FOR "IOWA PRESS," GOVERNOR TOM VILSACK. FOR THE PAST SEVERAL MONTHS, YOU'VE BEEN HEARING THAT "IOWA PRESS" IS CELEBRATING NOW ITS 30TH ANNIVERSARY HERE ON IOWA PUBLIC TELEVISION. A GOOD SHARE OF THE CREDIT FOR THAT LONGEVITY GOES TO THE GENEROSITY OF VIEWERS LIKE YOU, WHO SUPPORT HIGH-QUALITY, LOCALLY PRODUCED PROGRAMS. SO AS OUR ANNUAL "FRIENDS" FESTIVAL CONTINUES, WE ASK THAT YOU CONSIDER BECOMING A MEMBER OF "FRIENDS" OF IOWA PUBLIC TELEVISION. WE CALL THEM "FRIENDS." EITHER THAT OR RENEW YOUR MEMBERSHIP AND, IF POSSIBLE, INCREASE YOUR ANNUAL PLEDGE. YOUR SUPPORT MAKES POSSIBLE THE PRODUCTION OF PROGRAMS, LIKE "IOWA PRESS," THAT MAKE TELEVISION WORTH WATCHING. I'M DEAN BORG. THANKS FOR JOINING US TODAY.

ANNOUNCER: 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.