Iowa Public Television

IOWA PRESS #3126 >>

Borg: HIGH-PROFILE ISSUES AS THE GENERAL ASSEMBLY MOVES INTO THE SECOND HALF OF THE 2004 SESSION. INSIGHT FROM STATEHOUSE REPORTERS ON THIS EDITION OF "IOWA PRESS."

FUNDING FOR THIS PROGRAM WAS PROVIDED BY "FRIENDS," THE IOWA PUBLIC TELEVISION FOUNDATION... GENERATIONS OF FAMILIES AND FRIENDS WHO FEEL PASSIONATE ABOUT THE PROGRAMS THEY WATCH ON 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.

ON STATEWIDE IOWA PUBLIC TELEVISION, THIS IS THE FRIDAY, FEBRUARY 27 EDITION OF "IOWA PRESS." HERE IS DEAN BORG.

Borg: THE 2004 LEGISLATIVE SESSION IS A TRADITIONAL 100-DAY SESSION, MONDAY THAT HALFWAY MILESTONE IF WE GO THE HUNDRED DAYS. BUT EVEN AS THE SESSION CONVENED IN JANUARY, WE KNEW THAT BUDGET CUTS MAY REDUCE THE NUMBER OF DAYS, SO WE MAY ALREADY BE PAST THAT HALFWAY LEGISLATIVE MARK. BUT REALLY IT'S NOT THE NUMBER OF DAYS; IT'S WHAT'S ACCOMPLISHED THAT MEASURES A SESSION. AND TWO ESPECIALLY HIGH-PROFILE ISSUES ARE WORKING THEIR WAY THROUGH THE PROCESS NOW: MONEY FOR SCHOOLS AND STATE LICENSED GAMBLING. WE'VE INVITED STATEHOUSE REPORTERS WHO'VE BEEN WATCHING THE PROCESS TO PROVIDE THEIR ASSESSMENTS TODAY. TODD DORMAN IS BUREAU CHIEF FOR "THE LEE NEWSPAPERS" AT THE STATEHOUSE; KAY HENDERSON IS NEWS DIRECTOR FOR "RADIO IOWA"; ALSO TWO PUBLIC STATEHOUSE REPORTERS, "KUNI'S" JENEANE BECK AND "WOI'S" JOYCE RUSSELL. WELCOME TO THIS -- YOU GET TO DEBATE TODAY RATHER THAN LISTEN TO LEGISLATORS. AND, KAY, ON THURSDAY THE IOWA GENERAL ASSEMBLY IN THE HOUSE --

Henderson: RIGHT.

Borg: -- BROUGHT UP THAT BIG TOPIC OF GAMBLING. WERE YOU SURPRISED BY WHAT THEY DECIDED?

Henderson: WELL, PERHAPS IT'S BECAUSE I'M JADED AFTER COVERING THE STATEHOUSE FOR NINETEEN YEARS, BUT I WASN'T SURPRISED BY WHAT HAPPENED, WHAT OCCURRED. ANYTHING CAN GO IN A GAMBLING DEBATE, SO I GUESS I WAS PREPARED FOR ANYTHING TO HAPPEN. WHAT REALLY DID SURPRISE ME WAS IT WASN'T AS RANCOROUS DEBATE AS PAST DEBATES HAVE HAPPENED IN THE IOWA HOUSE AND THE IOWA SENATE. PART OF THAT MAY BE A FUNCTION OF THE FACT THAT THERE AREN'T A LOT OF OLD-TIMERS AROUND. THERE'S A LOT OF NEW LEGISLATORS, AND SO THEY DON'T HAVE AN AX TO GRIND WITH SOMEBODY ELSE ABOUT SOME PAST GAMBLING DEBATE AND THEY WANT TO GET THEIRS THIS TIME AROUND. SECONDARILY, THE OTHER THING THAT WAS SURPRISING TO ME WAS THAT IN SOME RESPECTS I THOUGHT WE MIGHT BE STILL DEBATING AT THIS POINT TODAY. IT WAS SURPRISING THAT IT WAS AS BRIEF AS IT WAS. THE OTHER SURPRISE TO ME, IF THERE WAS ANYTHING THAT WAS A SURPRISE, WAS THAT THE PEOPLE WHO HAD REPRESENTED AREAS WHERE GAMBLING PROPONENTS HAD PASSED REFERENDUMS -- TEN COUNTIES HAVE HAD REFERENDUMS. FIVE HAVE PASSED. FIVE COUNTIES WANT A GAMBLING OPERATION. THE FOLKS REPRESENTING THOSE COUNTIES DIDN'T PUT UP MUCH OF A FIGHT.

Beck: I'D LIKE TO POINT ON THAT BECAUSE I WAS AT FIRST A LITTLE SURPRISED BY THAT TOO. THEY TALKED ABOUT WANTING, YOU KNOW, NEW GAMBLING FACILITIES FOR THEIR COUNTIES. AND I WAS SURPRISED AT HOW MUCH THEY WERE CUT OUT OF THE BACK -- IN ALL THE TALK ABOUT THIS BEING OUT IN THE OPEN -- AND IT WAS A FAIRLY OPEN PROCESS -- BUT THERE WAS A DEAL CUT BEHIND THE DOORS IN WHICH DANNY CARROLL, WHO IS A GAMBLING OPPONENT SAID, "LOOK, I'LL AGREE TO EXPANSION OF TABLE GAMES BUT NO NEW LICENSES." AND SO THERE WAS SORT OF A DEAL BROUGHT OUT MIDDAY THAT WAS VOTED ON, AND PROPONENTS OF GAMBLING WERE NOT REALLY INCLUDED IN THAT. AND SO I WAS SURPRISED, LIKE KAY SAID, WHEN THEY FOLDED THEIR TENT AND DIDN'T PUSH IT. BUT WHAT I WAS TOLD IS THAT THEY WERE AFRAID IF THERE WAS A BIG VOTE IN THE HOUSE AGAINST EXPANSION THAT THE SENATE WOULDN'T BOTHER TO TAKE IT UP. SO THEY'RE HOPING NOW THAT THE SENATE WILL ADD AN AMENDMENT THAT ALLOWS FOR NEW LICENSES AND SEND IT BACK TO THE HOUSE.

Russell: I THINK THERE WAS ALSO A SENSE THAT AMONG THE COMMUNITIES THAT HAVE PASSED GAMBLING -- AND THERE WERE LEGISLATORS THAT WERE PROMOTING THAT -- THEY WERE REALLY AFRAID THAT IF THEY BROUGHT THAT TO A VOTE IN THE HOUSE --

Borg: BROUGHT WHAT TO A VOTE?

Russell: THE FIVE NEW CASINOS OR EXPANDING GAMBLING -- OR NOT PUTTING A MORATORIUM ON LICENSES, THEY WERE AFRAID THAT THE VOTES WEREN'T THERE. AND THIS IS GOING TO GO TO THE HOUSE. AND IF THEY BROUGHT IT UP AND THE MORATORIUM STOOD AND THEY VOTED AGAINST ANY NEW LICENSES, THAT WOULD JUST HURT THEM. IT WOULD CONTINUE NEGOTIATIONS IN THE SENATE. THEY WEREN'T SURE THAT THEY HAD THE VOTES.

Dorman: MOST COMMUNITIES ARE TAKING A BIG RISK BECAUSE IF THE MORATORIUM STAYS IN THE BILL AND THE LEGISLATURE SHUTS THE DOOR TO FURTHER LICENSES, THERE'S NOT A GOOD CHANCE THAT THAT DOOR IS GOING TO BE OPEN FOR A REALLY LONG TIME. SO IF THESE COMMUNITIES WANT CASINOS, THEY'RE GOING TO HAVE TO MAKE A VERY PASSIONATE STAND IN THE SENATE AND OVER THE NEXT FEW WEEKS.

Borg: NOT TO MAKE A PUN HERE, BUT I SUPPOSE IT IS, THEY WERE GAMBLING YESTERDAY, WEREN'T THEY? THOSE THAT WANT MORE LICENSES MADE A GAMBLE, A CALCULATED RISK.

Dorman: YES, THEY DID. AND IT'S INTERESTING, IN 1989 AND OTHER YEARS WHEN THERE HAVE BEEN LARGE GAMBLING DEBATES, THE GALLERIES HAVE BEEN PACKED. I MEAN THIS HAS BEEN A HUGE, PASSIONATE ISSUE. YESTERDAY, EVEN THOUGH YOU'VE GOT FIVE COMMUNITIES THAT WANT CASINOS, THERE WERE ONLY A FEW PEOPLE IN THE GALLERIES. THIS WASN'T -- THEY DID NOT BRING BUSES DOWN. THERE WASN'T A BIG SHOW OF FORCE. THAT COULD BE AHEAD. MAYBE THEY'LL TRY THAT STRATEGY AS IT GOES TO THE SENATE, BUT SO FAR I THINK THE LEGISLATORS ARE QUESTIONING HOW BAD THEY WANT IT.

Beck: WELL, IN THE PAST WHEN WE'VE BEEN SPEAKING ABOUT THIS ISSUE, SO THAT VIEWERS UNDERSTAND, WE'VE TALKED ABOUT HOW NO MATTER WHAT THE LEGISLATURE DID, IF THEY DIDN'T SAY THEY WANTED NEW CASINOS, THAT IT WOULD STILL STAND WITH THE COMMISSION. THE COMMISSION WOULD HAVE THE FINAL SAY, THE RACING AND GAMING COMMISSION. WELL, WHAT THEY APPROVED THIS WEEK WOULD ACTUALLY PUT A HARD MORATORIUM IN THE STATE LAW, SO THE COMMISSION WOULD BE TAKEN OUT OF THAT PROCESS. AND THAT'S WHY TODD IS SAYING IT WOULD BE A LONG TIME BEFORE THE LEGISLATURE MIGHT BE WILLING TO HAVE THIS DEBATE AGAIN.

Borg: IT REALLY TAKES THE HEAT OFF, THE PRESSURE OFF THE RACING AND GAMING -- GAMBLING COMMISSION, DOESN'T IT -- GAMING, IT'S RACING AND GAMING COMMISSION, HEADED BY MIKE MAHAFFEY OF MONTEZUMA. IT REALLY TAKES THE PRESSURE OFF THEM; DOESN'T IT, KAY?

Henderson: RIGHT. AND MICHAEL MAHAFFEY, WHO IS THE CHAIRMAN OF THAT GROUP, WAS A GUEST ON THIS PROGRAM LAST WEEK, AND YOU SENSED THAT HE WAS RELUCTANT TO ADDRESS THIS ISSUE. THAT'S NOT SOMETHING THAT THOSE FIVE COMMISSIONERS REALLY WANT TO DO. THEY DON'T WANT TO BE THE KINGMAKERS OR THE PEOPLE THAT TELL PEOPLE NO. AND SO LEGISLATORS HAVE STEPPED INTO THE BREACH HERE AND MADE A DECISION.

Borg: JOYCE, DID YOU SEE ANY OVERRIDING THEME AS THE HOUSE CONSIDERED ALL THESE ASPECTS OF GAMBLING? WAS THERE ANY OVERRIDING THEME SUCH AS WE -- FROM THE VERY FIRST YOU COULD SEE, WE DON'T WANT TO EXPAND GAMBLING, WE WANT TO PROTECT THE EXISTING CASINOS, OR ANYTHING ELSE THAT YOU THOUGHT WAS A COMMON THREAT THROUGHOUT THE ENTIRE DEBATE?

Russell: WELL, I THINK ONE OF THE BIG THEMES WAS WHAT ENDED UP IN THE BILL THAT THEY PASSED YESTERDAY, WAS THE DEAL WITH THE RACETRACKS. THEY GET THEIR TABLE GAMES AND, IN EXCHANGE, THEY WILL FORGIVE THE STATE A -- AS MUCH AS A $165-MILLION DEBT IN BACK TAXES THAT THE COURTS HAVE ORDERED THE STATE TO PAY. AND SO MIXED INTO THE DEBATE YESTERDAY, PEOPLE WERE STANDING UP -- PEOPLE -- GAMBLING OPPONENTS WERE SAYING -- ON THE FLOOR AND BEHIND THE SCENES WERE SAYING, "WE'VE GOT A BIG HOLE IN OUR BUDGET, AND THIS IS A WAY TO FIX IT."

Beck: WHAT I FOUND INTERESTING YESTERDAY WAS THAT LAWMAKERS WHO HAVE BEEN VERY ANGRY SINCE THE COURT RULING THAT ORDERED THEM TO PAY THOSE BACK TAXES HAVE MADE LOTS OF COMMENTS LIKE "WE'LL DROP A BAG OF HAMMERS, WE'RE GOING TO GET THEM TO PAY THIS MONEY BACK," WERE PRETTY CONCILIATORY YESTERDAY. AND I FELT THAT THE RACETRACKS GOT A LOT OF WHAT THEY WANTED. YES, THEY WON'T GET BACK TAXES, BUT NO ONE EVER EXPECTED THEM TO GET THOSE. INSTEAD, THEY GET A MUCH LOWER TAX RATE, PROBABLY AT ABOUT 24 PERCENT, AND THEY GET TABLE GAMES. SO I THINK THEY CAME OUT SMELLING LIKE A ROSE.

Borg: YES. BUT DID THEY ALSO, JENEANE, GET SOMETHING ELSE, AND THAT IS PROTECTION FROM ANY ADDITIONAL COMPETITION?

Beck: THIS IS A LOT OF WHAT THEY WANTED AT PRAIRIE MEADOWS AND COUNCIL BLUFFS AND DUBUQUE AS WELL.

Dorman: ESSENTIALLY THE TWO BIGGEST POWERS IN THE STRUGGLE GOT WHAT THEY WANTED. STATE GOVERNMENT GETS THE REVENUES THAT THEY NEED. THEY CLOSE -- THEY COVER THE HOLE BY THE COURT RULING, AND THE INDUSTRY GETS A LOT OF WHAT IT WANTED. AND THE PEOPLE THAT WERE -- THERE ARE SOME PROVISIONS IN THE BILL THAT OPPONENTS OF GAMBLING WANTED, LIKE MOVING ATMs OFF THE CASINO FLOOR. BUT IN ESSENCE, AGAIN, THE BIG LOSERS WERE THE FIVE COMMUNITIES THAT WANT CASINOS, BECAUSE THEY WERE LEFT OUT IN THE COLD.

Borg: AND THAT BRINGS UP, KAY, A QUESTION THAT I WANTED TO ASK YOU. IS THIS LIKELY -- IT'S REALLY PROBABLY TOO EARLY TO TELL, BUT JUST LOOK INTO YOUR CRYSTAL BALL -- LIKELY TO FOSTER SOME REGIONAL RESENTMENT?

Henderson: CERTAINLY. WE ALREADY HEARD A LITTLE BIT ABOUT THAT FROM FOLKS WHO WERE IN THE GALLERY. THERE WEREN'T VERY MANY PEOPLE THERE, BUT THERE WERE SOME FOLKS THERE FROM PALO ALTO COUNTY. AND THEY SEE PLACES LIKE DUBUQUE THAT HAVE HAD A REAL RENAISSANCE ALONG THE MISSISSIPPI RIVER BECAUSE OF THE GAMBLING PRESENCE THERE, AND THERE IS A RESENTMENT THAT THEY DON'T HAVE A PIECE OF THAT ACTION.

Russell: DUBUQUE KIND OF BECAME THE POSTER CHILD IN THE DEBATE. I MEAN SEVERAL LAWMAKERS MADE DIRECT REFERENCES TO DUBUQUE. WATERLOO, FOR EXAMPLE, SAID, "WE WANT GAMBLING. LOOK WHAT THEY'VE HAD IN DUBUQUE. WE WANT TO DO THAT."

Beck: AND THE OTHER THING -- WHAT I THOUGHT WAS ONE OF THE MOST STRIKING COMMENTS OF THE DAY, MARY GASKILL OF OTTUMWA, WHICH IS FROM A COMMUNITY THAT HAS APPROVED GAMBLING, SAID, "THOSE OF YOU THAT HAVE BENEFITTED FROM GAMBLING, DON'T PULL UP THE LADDER BEHIND YOU." AND THAT'S HOW THEY FEEL.

Borg: WELL, LET'S AGAIN LOOK INTO A CRYSTAL BALL. KAY, LOOK AT THE SENATE. WHAT DO YOU EXPECT? DO YOU SEE ANYTHING THERE PREDICTIVELY IN THE TEMPERAMENT OF THE SENATE?

Henderson: WELL, THE SENATE IS ALWAYS A LITTLE BIT MORE FREEWHEELING, AND SO GAMBLING DEBATES ARE ALWAYS MORE ENTERTAINING OVER THERE. AND IT'S ALSO A BODY OF SENATORS THAT IS MORE ATTUNED TO THE BACKROOM DEAL. SO EVEN THOUGH WE DID HAVE A BACKROOM DEAL IN THE END OVER IN THE HOUSE, THEY'RE NOT GOING TO SHOW THEIR CARDS IN PUBLIC FOR QUITE SOME TIME UNTIL THEY COME OUT WITH SOMETHING. AND THEY'RE PERFECTLY HAPPY TO HAVE A DEBATE AT 9:00 AT NIGHT OR AT MIDNIGHT ON GAMBLING. SO THAT'S WHAT I PREDICT IS THAT THERE'S GOING TO BE A BACKROOM DEAL, SOMETHING WILL COME OUT, AND IT WILL BE DEBATED IN THE LATE-NIGHT HOURS.

Borg: NOW, AS THE BILL STANDS NOW AS THE BILL GOES OVER TO THE SENATE, YES, IT SAVES THE STATE FROM HAVING TO PAY THOSE BACK TAXES, JENEANE. BUT DOES IT ALSO GIVE ANY NEW REVENUE TO THE STATE?

Beck: WELL, IT'S REVENUE NEUTRAL, AS THEY LIKE TO SAY. ONE OF THE THINGS THEY'VE DONE TO TRY TO MAKE SURE THAT THE CURRENT HOLE IN THE BUDGET IS COVERED IS THAT TO GET THESE TABLE GAMES, THE RACETRACKS WILL HAVE TO PAY A LITTLE UP-FRONT FEE: $10 MILLION IF YOU'RE A RACETRACK IN ALTOONA OR COUNCIL BLUFFS, AND I THINK DUBUQUE WILL HAVE TO PAY $3 MILLION. NOW, THAT WILL LATER BE CREDITED BACK TO THEM IN THE FORM OF FUTURE TAX PAYMENTS, BUT THAT'S TO HELP THE STATE COVER THIS HOLE THAT THEY'VE HAD FROM THE COURT RULING. AND THEN THEY'LL ALSO BE FORGIVEN THESE BACK TAXES. BUT I THINK WHAT COULD HAPPEN IS, AS KAY MENTIONED, WE DON'T KNOW WHAT'S GOING TO HAPPEN IN THE SENATE. AND IF THEY PASS A BILL AND THEY ADD ON LICENSES FOR NEW COMMUNITIES, IT COULD GET STYMIED IN THE HOUSE BECAUSE THERE COULD BE ENOUGH OPPONENTS WHO DON'T WANT IT. THEN IT GOES TO A CONFERENCE COMMITTEE. WE'VE SEEN GAMBLING BILLS DIE IN CONFERENCE COMMITTEE BEFORE. SO THEN WHAT HAPPENS IS THEY'VE GOT TO RESURRECT SOME OTHER BILL THAT TAKES CARE OF THIS TAX ISSUE BEFORE THEY GO HOME BECAUSE THEY HAVE TO HAVE THAT MUCH TAKEN CARE OF.

Henderson: AND A REMINDER, LAST YEAR THE HOUSE PASSED A BILL THAT WAS SOME SORT OF RESOLUTION TO THIS DEBATE BETWEEN THE TRACKS AND THE STATE THAT WOULD HAVE ESSENTIALLY TAKEN THE DEAL OUT OF THE COURTS AND RESOLVED IT. THE HOUSE PASSED IT. THE SENATE DIDN'T. THE SENATE TOOK A GAMBLE AND DECIDED TO TRY TO PLAY THIS THING OUT IN THE COURT SYSTEM. AND SO THEY'VE NEVER DEALT WITH THE TAX ISSUE IN THE SAME MANNER THAT THE HOUSE HAS LAST YEAR.

Borg: WE'LL HAVE TO WAIT AND SEE WHAT HAPPENS IN THE SENATE. JOYCE, LET'S SWITCH TO THAT OTHER BIG ISSUE THAT FACES THE LEGISLATURE, AND THAT'S EDUCATION, SPECIFICALLY K-12. NOW, EARLY IN THE SESSION, MAYBE A COUPLE OF WEEKS AGO, MAYBE LONGER THAN THAT, THE LEGISLATURE LED BY THE REPUBLICANS LOOKED AHEAD AND SAID, WELL, FOR THE NEXT FISCAL YEAR, 2005/2006, WE'RE GOING TO ALLOW 2-PERCENT ALLOWABLE GROWTH. THE EDUCATION COMMUNITY SCREAMED. THE GOVERNOR SAID, "IT'S NOT ENOUGH. I'M GOING TO VETO IT." BUT THE LEGISLATION HASN'T EVEN REACHED HIS DESK YET.

Russell: WELL, THAT'S RIGHT. AND IT'S AN INTERESTING DECISION ON THE PART OF THE REPUBLICAN MAJORITY TO DO THAT. YOU'RE RIGHT, THEY'VE APPROVED FUNDING FOR K-12 EDUCATION THAT THE GOVERNOR IS NOT SATISFIED WITH. THE GOVERNOR HAS PROMISED -- RIGHT AWAY THE NEXT DAY CALLED A NEWS CONFERENCE AND SAID, "I'LL VETO THIS WHEN I GET IT." SO THEY HAVEN'T SENT IT DOWN THERE. IT COULD BE THAT THEY'RE HOPING FOR SOME KIND OF CHANGE OF HEART ON THE GOVERNOR OR SOME KIND OF RESOLUTION. IT DOESN'T LOOK LIKELY THAT THAT'S GOING TO HAPPEN. BUT IN THE MEANTIME, BECAUSE THEY'VE HELD THAT BILL, ONCE THEY DO SEND IT DOWN, THERE WILL JUST BE ANOTHER ROUND OF NEWS STORIES AND ANOTHER OPPORTUNITY FOR THE SCHOOLS TO WEIGH IN, THE TEACHERS, THE SCHOOL BOARDS, ALL OF THOSE PEOPLE TO WEIGH IN WHEN THE GOVERNOR VETOES.

Borg: TODD, IS THAT THE WAY THAT YOU SEE IT, THAT THIS COULD BACKFIRE, THAT THAT IS THE STRATEGY OF THE REPUBLICANS NOW, TO HOLD THE LEGISLATION FROM BEING SENT DOWN TO THE GOVERNOR FOR THAT CERTAIN VETO RIGHT NOW? IS THERE A POSSIBILITY THAT IT COULD VETO, BACKFIRE ALONG THE WAY?

Dorman: WELL, FROM A PUBLIC RELATIONS STANDPOINT, I GUESS THAT'S POSSIBLE. I THINK -- I GUESS THE OVERARCHING THING IS THAT THERE ARE SEVERAL WAYS THAT THE LEGISLATIVE SESSION CAN END IN A TRAIN WRECK, AND THIS IS ONE OF THE CHIEF WAYS IT CAN END IS OVER EDUCATION FUNDING. I MEAN IF YOU GO OUT AND HEAR THE GOVERNOR SPEAK, HE'S SPEAKING WITH A MISSIONARY ZEAL ON THE SUBJECT AND IT'S VERY CLEAR THAT HE'S NOT INTERESTED IN COMPROMISE. HE'S NOT INTERESTED IN BACKING DOWN. REPUBLICANS ARE SPEAKING WITH THE SAME FORCE, AND I DON'T KNOW HOW IT GETS RESOLVED. AND I THINK THIS IS GOING TO BE THE ISSUE THAT MAY CARRY ITSELF INTO SPECIAL SESSIONS AND DEFINITELY INTO THE ELECTION IN THE FALL.

Borg: JENEANE, ANY DIFFERING OPINION ON WHAT TODD HAS GIVEN AS THE PROSPECTIVE ANALYSIS THERE?

Beck: NO. I THINK THAT THE LEGISLATORS HAVE HELD THE BILL IN HOPES OF GIVING THEMSELVES A BREAK FROM CITIZENS AND TEACHERS THAT ARE COMING TO THE STATEHOUSE ASKING FOR MORE MONEY FOR EDUCATION. AS LONG AS THE BILL HASN'T BEEN VETOED, THEY DON'T HAVE TO TAKE UP A NEW BILL. SO THEY'RE JUST HOLDING IT, THINKING IT WILL HOLD OFF ON ALL THAT PUBLIC COMPLAINT. HOWEVER, LIKE JOYCE SAID, ONCE IT GOES DOWN AND IT IS VETOED, THAT FIRESTORM STARTS BACK UP AGAIN, AND THAT COULD BE IN A SPECIAL SESSION.

Borg: KAY, WE'RE TALKING THERE ABOUT K-12 FUNDING IN THE NEXT FISCAL YEAR, NOT THE ONE THAT STARTS IN JULY BUT A YEAR FROM JULY.

Henderson: THE 2005/2006 ACADEMIC YEAR.

Borg: THAT'S RIGHT. BUT HOW DOES THIS POTENTIAL TRAIN WRECK AFFECT THE EDUCATION COMMUNITY, HIGHER ED AND COMMUNITY COLLEGES?

Henderson: WELL, HIGHER ED AND COMMUNITY COLLEGES ARE BADGERING LEGISLATORS FOR MORE MONEY AS WELL. THEY'RE PROBABLY NOT GOING TO GET IT. LEGISLATORS HAVE A VERY TRIM BUDGET. THEY ONLY HAVE ABOUT $18 MILLION MORE TAX DOLLARS THIS TIME AROUND THAN THEY DID LAST TIME AROUND. THEY'VE ALREADY MADE A PROMISE TO THE K-12 EDUCATION SYSTEM THAT THEY'LL GET 109 MILLION MORE DOLLARS. SO THAT MEANS THEY HAVE TO CUT OTHER AREAS. SO UNLESS THERE'S HUGE SHIFTS WITHIN STATE GOVERNMENT, I WOULD NOT COUNT ON, IF I WERE A PART OF ANY OTHER PART OF STATE GOVERNMENT, GETTING A HUGE INCREASE IN MY BUDGET.

Borg: BUT IT WOULD JUST SEEM TO ME THAT IF, BY SOME STRETCH OF THE IMAGINATION, LEGISLATORS DO MOVE OFF 2 PERCENT AND GIVE K-12 MORE, THAT'S LESS THAT GOES TO COMMUNITY COLLEGES OR HIGHER ED UNLESS THE MONEY COMES FROM SOMEPLACE ELSE.

Henderson: THAT'S RIGHT. WHEN YOU PUSH HERE, IT COMES HERE.

Borg: THAT'S RIGHT. JOYCE, AS YOU LOOK AT THE OVERALL BUDGET PROGRESS IN DEVELOPING THE BUDGET FOR THE NEXT FISCAL YEAR, STARTING JULY 1, IT DOESN'T SEEM LIKE VERY MUCH IS HAPPENING. AM I WRONG?

Russell: NO. WHAT'S HAPPENED SO FAR IS THAT THE REPUBLICAN MAJORITY HAS MADE SOME PROMISES. THEY PROMISED A HUNDRED AND SOME MILLION DOLLARS FOR SCHOOLS, A 2-PERCENT INCREASE, AND ALSO PAYING BACK THE ACROSS-THE-BOARD CUT THAT SCHOOLS GOT LAST FALL. SO THEY'VE HELD THEIR NEWS CONFERENCES. THEY SAID, "WE'VE DECIDED WE'RE GOING TO DO THIS. WE PROMISE THIS." ONE CHAMBER -- REPUBLICANS IN ONE CHAMBER ALSO PROMISED THAT THEY WOULDN'T CUT PROPERTY TAX CREDITS, THAT THEY WOULD FUND PROPERTY TAX CREDITS FOR CITY AND COUNTY GOVERNMENTS. SO THEY'VE MADE THESE PROMISES, BIG-TICKET ITEM PROMISES, BUT THAT'S AS FAR AS THEY'VE GOTTEN -- AS IT'S GOTTEN. THEY HAVEN'T GIVEN US ANY IDEA OF WHAT THEY'RE GOING TO CUT TO PAY FOR THAT.

Borg: WELL, THEY WERE TRYING TO GET SOME MONEY, TODD, FROM THE STATE EMPLOYEES UNION, SAYING WOULD YOU PLEASE NOT MAKE US PAY WHAT WE'VE CONTRACTED TO PAY YOU AND WOULD YOU PLEASE TAKE A PAY FREEZE AND WE'RE NOT GOING TO HAVE TO -- IT WILL GIVE US SOME MONEY, WE'RE NOT GOING TO HAVE TO LAY OFF EMPLOYEES. ANY RESPONSE FROM AFSCME?

Dorman: AFFECT ME SAID, NO, THANK YOU, TO PUT IT POLITELY.

Borg: SO WE'RE GOING TO HAVE LAYOFFS?

Dorman: THAT'S WHAT IT LOOKS LIKE, AND IT'S A FUNCTION OF THE FACT THAT THE GOVERNOR DID NOT PUT MONEY IN HIS BUDGET FOR SALARIES. SO DEPARTMENT HEADS ARE LEFT WITH REALLY NO CHOICE OTHER THAN TO CUT STAFF TO COVER THAT COST.

Beck: THAT'S AN INTERESTING POINT. YOU KNOW, THE GOVERNOR HAS PROPOSED SOME TAX INCREASES, BUT REPUBLICANS WILL POINT OUT EVEN HIS TAX INCREASES DOES NOT SUPPLY NEW MONEY FOR STATE WORKER SALARIES. IT SUPPLIES NEW MONEY FOR SOME EDUCATION PROGRAMS AND SOME HEALTH CARE PROGRAMS, BUT NOT NEW MONEY FOR SALARIES. SO NO MATTER -- EVEN IF THEY WOULD ACCEPT HIS TAX INCREASES, THERE ARE GOING TO BE LAYOFFS IN BROADER STATE GOVERNMENT.

Borg: ONE OF THE MAJOR, KAY -- ONE OF THE MAJOR TAX INCREASES -- I SHOULDN'T SAY MAJOR BUT THAT'S GETTING MOST OF THE ATTENTION -- LET'S PUT IT THAT WAY -- IS THE PROPOSED INCREASE IN CIGARETTE TAXES. NOW, THE GOVERNOR SEEMS TO BE OUT TRYING TO MARSHAL FORCES. I NOTICE THAT HE APPEALED TO THE CANCER SOCIETY VOLUNTEERS TO PUT PRESSURE ON LEGISLATORS TO RAISE THOSE TAXES ON CIGARETTES. IS THERE ANY INDICATION REPUBLICAN LEADERS MIGHT BE PRESSURED INTO CHANGING THEIR MINDS?

Henderson: AT THIS POINT, THERE DOES NOT APPEAR TO BE A MOVEMENT AMONG REPUBLICAN LEGISLATORS TO RAISE THE CIGARETTE TAX. THEY ARE THE PARTY OF NO NEW TAXES; WE PROMISE YOU THAT. IF THERE WOULD BE A MOVEMENT, I THINK IT WOULD COME LATE IN THE SESSION WHEN THEY'VE PUT THIS BUDGET OUTLINE TOGETHER AND FIND OUT THAT THINGS JUST DON'T ADD UP. I THINK THAT WOULD BE THE ONLY PRESSURE THAT WOULD FORCE THEM TO DO THAT. OR IF THEY WERE TO DECIDE AS A UNIT THAT THEY WANTED TO PROVIDE MORE MONEY ON DOWN THE LINE TO THIS NEW STATE ECONOMIC DEVELOPMENT FUND THEY ALL CALL THE IOWA VALUES FUND, THEY ARE OUT OF MONEY IN THAT TWO YEARS. AND SO THERE MIGHT BE A COMPROMISE WHEREBY THEY RAISE THE CIGARETTE TAX TO FINANCE THAT OR BANKROLL IT, IF YOU WILL, MAKE A PROMISE ON DOWN THE LINE. AND THAT IS SOMETHING THAT SENATOR JEFF LAMBERTI, WHO IS NOW THE SENATE PRESIDENT, SUGGESTED LAST YEAR, USING THE CIGARETTE TAX IN THAT METHOD. I THINK LEGISLATORS WERE SURPRISED THIS PAST WEEK BY POLLS IN "THE DES MOINES REGISTER" WHICH SHOWED AN OVERWHELMING MAJORITY OF IOWANS WOULD SUPPORT A CIGARETTE TAX INCREASE AND A MAJORITY OF IOWANS WOULD SUPPORT EXPANDING THE SALES TAX BASE, WHICH IS SOMETHING ELSE THAT GOVERNOR VILSACK HAS SUGGESTED, CHARGING SALES TAXES ON ACCOUNTING AND LANDSCAPING, THOSE KINDS OF SERVICES.

Borg: THE ARGUMENT ON THE PART OF THE REPUBLICAN LEADERSHIP IS THAT THIS IS -- TO RAISE THE CIGARETTE TAX PUTS THE BORDER COMMUNITIES AND RETAILERS THERE AT A DISADVANTAGE BECAUSE PEOPLE WILL JUST GO OVER THE STATE LINE TO GET CIGARETTES AT A LOWER PRICE. IS THAT RIGHT, JENEANE?

Beck: THAT IS PART OF THE ARGUMENT, YES, THAT WE'LL SEE WARS OF, YOU KNOW, BORDER COMMUNITIES WHERE PEOPLE ARE DRIVING ACROSS THE STATE LINES OR THAT THEY'LL ORDER THEIR CIGARETTES ONLINE. APPARENTLY, THAT'S A POSSIBLY IN THESE DAYS OF COMPUTERS AND ONLINE PURCHASES. THEY ALSO SAY, WELL, IT'S A REGRESSIVE -- THIS IS A STRANGE ARGUMENT COMING FROM REPUBLICANS, BUT THIS IS A REGRESSIVE TAX THAT HURTS THE LOW INCOME FAMILIES BECAUSE A LARGER PROPONENT OF LOW-INCOME PEOPLE ARE ADDICTED TO CIGARETTES. BUT THAT'S ONE OF THE REASONS THE ADVOCATES SAY IT'S IMPORTANT TO RAISE IT BECAUSE THEY BELIEVE SOME PEOPLE WILL QUIT OR NOT START IF THEY RAISE THE CIGARETTE TAX.

Russell: SO AMONG THE LEADERSHIP, YOU HAVE THE HOUSE SPEAKER, WHO IS FROM THE BORDER COMMUNITY OF SIOUX CITY; YOU HAVE THE WAYS AND MEANS CHAIR, JAMIE VANFOSSEN OF THE BORDER COMMUNITY OF DAVENPORT; AND THEN YOU HAVE THE SENATE MAJORITY LEADER WHO IS A SMOKER, SO THAT KIND OF PUTS THINGS IN THAT DIRECTION.

Henderson: SNUFFS IT OUT. [ LAUGHTER ]

Henderson: WELL, THE OTHER THING THAT I THINK THEY'RE LOOKING AT IS THE STATE OF NEW YORK DRAMATICALLY RAISED ITS CIGARETTE TAXES, AND REVENUES FROM CIGARETTE TAXES HAVE ACTUALLY GONE DOWN BECAUSE WHAT'S HAPPENED IN NEW YORK IS PEOPLE ARE GOING ONLINE. THEY'RE GOING OVER TO JERSEY TO BUY THEIR CIGS, AND SO I THINK THAT IS A CONSIDERATION AS WELL THAT IF THEY WERE TO RAISE THIS TAX, IT'S NOT NECESSARILY GOING TO BE A WINDFALL TO THE STATE BECAUSE THEY'RE SEEING IN OTHER STATES THAT'S NOT THE CASE.

Borg: JOYCE, NATIONALLY WE'VE HEARD A LOT ABOUT GAY MARRIAGE ISSUES THIS PAST WEEK AND PAST COUPLE OF WEEKS, BUT IT'S INTENSIFYING. ANY INDICATION THAT THAT'S SEEPING INTO THE IOWA LEGISLATURE WITH ANY POTENTIAL ACTION?

Russell: WELL, THE SENATE -- A SENATE COMMITTEE THIS WEEK PASSED OUT TWO RESOLUTIONS BOTH DEALING WITH THIS ISSUE. ONE WOULD PUT IN MOTION THE PROCESS OF AMENDING THE IOWA CONSTITUTION TO DECLARE MARRIAGE TO BE THE UNION BETWEEN A MAN AND A WOMAN. THAT PASSED. AND THEN A SECOND RESOLUTION URGED THE U.S. CONGRESS TO DO THE SAME FOR THE U.S. CONSTITUTION. SO THOSE ARE BOTH OUT THERE. THERE DOESN'T SEEM TO BE -- THE LEADERS HAVE NOT SAID THAT THEY WOULD STOP IT. ONE OF THOSE SIMILAR -- ONE OF THOSE RESOLUTIONS WAS ALSO BEFORE -- THEY WENT THROUGH A SENATE COMMITTEE THIS WEEK. ONE OF THEM WAS ALSO IN A HOUSE COMMITTEE THIS WEEK, AND IT WAS CLEAR THAT THERE'S NOT OVERWHELMING REPUBLICAN SUPPORT FOR THAT. THERE WAS SOME QUESTION AS TO WHETHER THEY HAD THE REPUBLICAN VOTES TO BRING THAT OUT OF COMMITTEE. SOME MORE MODERATE REPUBLICANS JUST DON'T THINK IT'S NEEDED, AND THEY'LL SAY IT'S JUST CLUTTER.

Borg: SO IT'S NOT CLEAR IT'S EVEN GOING TO GET TO THE FLOOR.

Russell: WELL, THE LEADERS HAVE NOT SAID THAT THEY WOULD BLOCK IT FROM THE FLOOR.

Beck: NO, WE HAVEN'T GOTTEN -- AT THE BEGINNING OF THE SESSION, LEADERS TALKED ABOUT THERE MAY BE SOME NEED TO SOLIDIFY -- IT IS CURRENTLY IN IOWA, THE STATUTE SAYS THAT A MARRIAGE IS BETWEEN A MAN AND A WOMAN, SO IT IS ALREADY IN CODE. HOWEVER, AT THE BEGINNING OF THE SESSION LEADERS DID SAY BECAUSE OF ALL THIS ACTIVITY THEY'RE SEEING IN OTHER STATES AND COURT RULINGS IN OTHER STATES THAT THEY MIGHT WANT TO DO SOMETHING TO MAKE IOWA'S LAW STRONGER. BUT NOW THAT IT HAS PASSED OUT OF THE SENATE, THE CHAIR OF THAT SENATE COMMITTEE THAT APPROVED IT SAID HE DOESN'T HAVE A PROMISE FROM LEADERSHIP TO BRING IT UP FOR THE FULL SENATE. SO WE DON'T KNOW YET.

Henderson: AND THE OTHER THING, THERE HAS BEEN AN EXPERIMENT IN A JURISDICTION IN IOWA IN REGARDS TO THIS ISSUE. AS IN SAN FRANCISCO, ABOUT 15 COUPLES -- GAY COUPLES WENT TO THE JOHNSON COUNTY COURTHOUSE THIS PAST WEEK AND SAID "WE'D LIKE TO GET A MARRIAGE LICENSE." AND THE RECORDER THERE SAID IOWA LAW PROHIBITS THIS KIND OF CONTRACT. SO WE ALREADY HAVE HAD AN EXPERIMENT HERE AND HAD A LOCAL OFFICIAL ADHERE TO STATE LAW AND SAY, HEY, STATE LAW SAYS MARRIAGE IS BETWEEN A MAN AND A WOMAN.

Borg: TODD, I OPENED THE PROGRAM SAYING 100 DAYS, MAYBE FEWER, MAYBE 90. BUT TRADITIONALLY AT THIS TIME, WEATHER STARTS TO GET A LITTLE WARMER, LEGISLATORS, PARTICULARLY IN AN ELECTION YEAR LIKE THIS IS, START TO THINK ABOUT BUCKLING UP AND GETTING HOME. IS IT GOING TO BE THAT SORT OF A NEXT FEW WEEKS?

Dorman: I THINK ALWAYS, LIKE YOU SAY, THIS TIME OF YEAR THEY START THINKING ABOUT THE END GAME.

Borg: IS THE POLITICAL CLIMATE SO INTENSE IN IOWA AT THIS TIME THAT IT'S GOING TO HAPPEN?

Dorman: WELL, I THINK THERE'S AN IMPORTANT NATIONAL ELECTION. THE POLITICAL CLIMATE IN IOWA WITH AN ELECTION LIKE THIS WITH LEGISLATIVE RACES IS KIND OF SLOW DEVELOPING. CANDIDATES ARE STARTING TO LINE UP TO OPPOSE LAWMAKERS OR CANDIDATES ARE LINING UP ALL OVER THE STATE. I DON'T FEEL, NECESSARILY, ELECTION INTENSITY YET. BUT YOU'RE RIGHT, IT WILL EVENTUALLY GROW.

Beck: I WONDER, THOUGH, IF THE LEGISLATIVE RACES COULD BE AMONG THE MOST INTERESTING IN IOWA BESIDES THE PRESIDENTIAL RACE, BECAUSE THE CONGRESSIONAL RACES ARE SURE LOOKING LIKE THEY MAY BE A YAWNER. SO IT COULD BE THAT THE LEGISLATIVE RACES ARE INTERESTING BECAUSE WITH THE PRESIDENTIAL RACE, DEMOCRATS ARE HOPING THEY MIGHT BE ABLE TO TAKE CONTROL OF ONE OR BOTH OF THE STATE CHAMBERS.

Borg: IF THERE'S A LANDSLIDE ONE WAY OR THE OTHER.

Beck: YES.

Borg: KAY, GORDON FISHER, THE STATE DEMOCRATIC CHAIR, PROMISED US A FEW WEEKS AGO WHEN HE WAS ON THIS PROGRAM THAT, YEAH, WE'RE GOING TO HAVE A CANDIDATE TO OPPOSE CHARLES GRASSLEY ON THE TICKET. HAVEN'T SEEN IT YET, UNLESS YOU HAVE.

Henderson: I HAVE NOT SEEN IT. THEY MAY HAVE TO HAVE SOME SORT OF A GAME SHOW AND HAVE CONTESTANTS COME ON AND AWARD THE NOMINATION IN THAT MANNER BECAUSE THERE CERTAINLY HAS NOT BEEN A PERSON WHO HAS COME FORWARD AND SAY, "I WOULD LIKE TO BE THE SACRIFICIAL LAMB TO BE DRUGGED BY A CHUCK GRASSLEY IN NOVEMBER."

Borg: THERE'S BEEN SOME TALK ABOUT SOME CANDIDATE, ROXANNE CONLIN, JOYCE, AS A POSSIBILITY. BUT THAT SEEMS NOT TO HAVE COME TO THE SURFACE YET.

Russell: NOT YET. FORMER CANDIDATE FOR GOVERNOR HERSELF, LATEST WORD IS SHE'S LEANING AGAINST RUNNING AGAINST CHARLES GRASSLEY.

Borg: AND GOVERNOR VILSACK HAS BEEN APPEARING QUITE A BIT RECENTLY, JENEANE, ON NATIONAL FORUMS, CHAIRMAN OF THE DEMOCRATIC GOVERNORS, AND ALSO REPLYING, AT LEAST TWICE IN MY RECENT MEMORY, TO THE PRESIDENT'S SATURDAY RADIO ADDRESS. ANY INDICATION AT THE STATEHOUSE COVERING THE GOVERNOR'S OFFICE THAT THERE'S ANYTHING GENERATING THERE, OR IS IT JUST THAT HE HAS THE NATIONAL PLATFORM AND IS DOING MORE ON THE NATIONAL LEVEL?

Beck: WELL, A STAFF MEMBER THAT HAD BEEN BROUGHT ON BOARD TO RAISE HIS NATIONAL PROFILE HAS MOVED ON AND IS NOW WORKING WITH THE DEMOCRATIC GOVERNORS ASSOCIATION. SO I THINK THERE HAS BEEN AN EFFORT TO RAISE HIS NATIONAL PROFILE. I GUESS WE'RE ALL CONFUSED ABOUT WHAT WILL EVENTUALLY COME OF THAT. WE CAN'T SEE HOW HE WOULD BENEFIT THE DEMOCRATIC TICKET AS A VICE PRESIDENTIAL CANDIDATE, BUT MAYBE HE'S JUST HOPING THAT HE WOULD BE PICKED FOR A CABINET POSITION IF A DEMOCRAT WERE TO WIN THE WHITE HOUSE.

Borg: LIEUTENANT GOVERNOR SALLY PEDERSON SEEMS TO BE GETTING A LITTLE MORE VISIBILITY TOO.

Beck: SHE IS. THEY'RE PUTTING HER OUT FRONT MORE, HOPING MAYBE SHE'LL RUN FOR GOVERNOR.