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| Senate President Jeff Lamberti IOWA PRESS #3131>> Borg: IOWA'S 2005 BUDGET IS A TOP PRIORITY ON THE LEGISLATIVE AGENDA, BUT GAMBLING IS THE STICKING POINT TO ADJOURNMENT. WE'LL DISCUSS THE PROGRESS AND THE NUANCES WITH THE STATE SENATE'S PRESIDENT, JEFF LAMBERTI, AND THE DEMOCRATIC MINORITY LEADER, MIKE GRONSTAL, 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, APRIL 2 EDITION OF "IOWA PRESS." HERE IS DEAN BORG. Borg: LEGISLATIVE LEADERS HAD TARGETED NEXT FRIDAY, APRIL 9, FOR CLOSING THE CURRENT SECOND SESSION OF IOWA'S 80TH GENERAL ASSEMBLY, BUT MAJOR DECISIONS AND HARD-LINE POSITIONS ON THE FUTURE OF GAMBLING IN IOWA HAVE DASHED THOSE HOPES. WELL, LAST WEEK HOUSE SPEAKER CHRISTOPHER RANTS UPDATED US, AND THIS WEEK WE'LL GET SENATE PERSPECTIVE FROM ANKENY REPUBLICAN JEFF LAMBERTI -- HE'S THE SENATE'S PRESIDENT -- AND FROM MIKE GRONSTAL OF COUNCIL BLUFFS, WHO LEADS THE SENATE'S MINORITY DEMOCRATS. GENTLEMEN, WELCOME BACK TO "IOWA PRESS." Lamberti: THANK YOU. Gronstal: THANKS FOR HAVING US. Borg: ALSO HERE AT THE "IOWA PRESS" TABLE: "DES MOINES REGISTER" POLITICAL COLUMNIST DAVID YEPSEN AND "RADIO IOWA" NEWS DIRECTOR KAY HENDERSON. Henderson: GENTLEMEN, LET'S START AT THE BEGINNING. LET'S SORT OF GET UNDER THE HOOD OF THIS GAMBLING ISSUE, IF YOU WILL. HOW DID WE GET HERE? LET'S TALK FIRST ABOUT THIS GAMBLING DECISION THAT THE IOWA SUPREME COURT MADE AND WHAT IT HAS FORCED THE LEGISLATURE TO DO IN RESPONSE. SENATOR LAMBERTI? Lamberti: IF YOU GO BACK TO THE LAW PRIOR TO THE TIME OF THE COURT DECISION, WE TAXED THE RIVERBOATS AND THE RACETRACKS DIFFERENTLY, THE RIVERBOATS AT 20 PERCENT AND THE TRACKS AT AN ESCALATING RATE THAT WAS GOING TO CAP AT 36 PERCENT. WE'VE GONE THROUGH SEVERAL COURT DECISIONS. BUT AS IT STANDS RIGHT NOW FROM THE LAST RULING OF THE IOWA SUPREME COURT, THEY SAID YOU CANNOT HAVE THAT DISPARITY IN TAX RATES, SO ESSENTIALLY EVERYBODY IS AT 20 PERCENT. OBVIOUSLY THAT CAUSES A SIGNIFICANT LOSS OF REVENUE TO THE STATE BOTH IN OUR GENERAL FUND, ALTHOUGH LESS SO IN OUR GENERAL FUND, AND IN OUR INFRASTRUCTURE FUND, HOW WE FUND BUILDING PROJECTS, ENVIRONMENTAL PROJECTS. AND THAT'S THE DILEMMA WE FACE RIGHT NOW. Henderson: BECAUSE LEGISLATORS A LONG TIME AGO DECIDED THAT GAMBLING TAX REVENUE WOULD BE USED FOR THOSE PROJECTS; CORRECT? Lamberti: THAT'S CORRECT. Henderson: SENATOR GRONSTAL, ALSO INCLUDED IN THIS DEBATE IS GAMBLING EXPANSION. LET'S TAKE A STEP BACK. HOW DID WE GET TO THAT POINT, WHERE THIS, IN ADDITION TO TAXATION, YOU'RE ALSO CONTEMPLATING THE IDEA OF ALLOWING MORE LICENSES? Gronstal: WELL, FRANKLY, IT WAS IOWANS THAT BROUGHT THAT ISSUE TO US. THERE HAVE BEEN SIX COUNTIES NOW THAT HAVE PASSED REFERENDUM TO EXPAND GAMBLING IN THEIR COMMUNITIES AND TAKE SOME ADVANTAGE OF THE BENEFITS THEY'VE SEEN HAPPEN IN OTHER COMMUNITIES AS A RESULT OF GAMBLING, SO IT WAS REALLY IOWANS THAT BROUGHT THIS TO US. AS YOU KNOW, THE RACING AND GAMING COMMISSION HAS, BY RULE, IMPOSED A MORATORIUM ON NEW LICENSES IN IOWA. AND AS PEOPLE LOOKED AT THIS UPCOMING SESSION AND THE ISSUE OF TAXES, A NUMBER OF THOSE COMMUNITIES OUT THERE SAID MAYBE THERE'S AN OPPORTUNITY FOR US TO GET SOME OF THE BENEFITS. Yepsen: SENATOR GRONSTAL, AS KAY MENTIONED, WE'RE REALLY TRYING TO HELP PEOPLE UNDERSTAND WHAT IS A VERY COMPLICATED WIRING DIAGRAM HERE. BESIDES THE RATES THAT SENATOR LAMBERTI MENTIONED AND BESIDES THE LICENSES ISSUE, ARE THERE OTHER POINTS OF CONTENTION IN THIS DEBATE? Gronstal: THERE'S ALWAYS BEEN TENSION ABOUT IT, JUST AS THERE IS TENSION WITH THE LOCAL OPTION SALES TAX FOR INFRASTRUCTURE FOR SCHOOLS, THAT COMMUNITIES WITHOUT MUCH RETAIL BASE DON'T GET MUCH BENEFIT FROM THAT. SO COMMUNITIES THAT HAVE GAMING IN THIS STATE, SOME OF THE OTHER COMMUNITIES LOOKED AT THAT AND SAID THAT'S A SIGNIFICANT ADVANTAGE FOR THOSE COMMUNITIES. SO I THINK THERE'S ALWAYS A HOST OF TENSIONS ABOUT THIS ISSUE. Yepsen: SENATOR LAMBERTI, IS ONE OF THOSE TENSIONS THE WHOLE NOTION OF WHETHER WE SHOULD BE IN GAMBLING OR NOT IN THE FIRST PLACE? FOR YEARS, AS I WATCHED THE LEGISLATURE, I COULD SEE A LOT OF MEMBERS CAME FROM PLACES WHERE PEOPLE DIDN'T WANT GAMBLING. IN RECENT YEARS THAT SEEMS TO HAVE DIMINISHED, BUT THERE ARE STILL SOME PEOPLE THERE WHO HAVE SOME OBJECTIONS TO GAMBLING. IS THAT ONE OF THE STICKING POINTS? Lamberti: IT CERTAINLY COMES INTO PLAY WHEN YOU START TALKING ABOUT EXPANSION. IN THE SENATE, WE'VE GOT TO GET 26 VOTES IF WE'RE GOING TO MOVE FORWARD WITH SOME FORM OF EXPANSION, AND THERE CLEARLY ARE PEOPLE WHO ARE STILL OPPOSED TO IT. I THINK, AS YOU SAID, THAT HAS DIMINISHED. WE'VE BEEN IN THE GAMBLING BUSINESS, I BELIEVE, SINCE 1991, WITH RIVERBOATS. SO SOME OF THAT HAS DIMINISHED. AND, YOU KNOW, WE'RE NOT GOING TO TRY TO FOOL OURSELVES AND SAY WE'RE NOT IN THE GAMBLING BUSINESS. WE ARE BUT CLEARLY THERE ARE PEOPLE WHO STILL DON'T LIKE THAT. Yepsen: IS IT -- SENATOR, IS IT STILL -- I MEAN IT USED TO BE LIBERALS WHO THOUGHT IT WAS A BAD WAY TO TAX PEOPLE, AND YOU HAD SOCIAL CONSERVATIVES WHO THOUGHT IT WAS IMMORAL AND AGAINST THEIR RELIGIOUS VIEWS. IS THAT STILL THE COMBINATION, OR IS ONE MORE DOMINANT THAN THE OTHER IN THIS DEBATE? Lamberti: I THINK THE PEOPLE WHO ARE JUST OPPOSED TO GAMBLING FROM A MORAL PERSPECTIVE ARE PROBABLY MORE DOMINANT ON THOSE OPPOSITE SIDES. I MEAN WE'VE GENERATED A LOT OF GAMBLING REVENUE OVER THE YEARS, AND I THINK THAT SIDE OF IT HAS LESSENED. Yepsen: AND, SENATOR GRONSTAL, DO WE EVER REACH A POINT WHERE WE TREAT GAMBLING IN THIS STATE AS ANOTHER BUSINESS JUST LIKE THE INSURANCE BUSINESS, OR WILL IT ALWAYS HAVE THESE PROBLEMS THAT WE'VE BEEN TALKING ABOUT? Gronstal: I THINK IT WILL ALWAYS HAVE THESE PROBLEMS, AND I THINK THERE'S BEEN SOME BENEFIT TO THE WAY IOWA HAS APPROACHED IT. WE'VE IN ESSENCE SAID THAT IF WE'RE GOING TO HAVE CASINOS IN THIS STATE, WE'RE GOING TO MAKE THEM FEW SO THAT WHEREVER THEY ARE, THEY DEVELOP SIGNIFICANT AMENITIES, THEY BUILD RESTAURANTS AND HOTELS AROUND THEM, AND THEY MAKE THEM DESTINATION STOPS FOR TOURISTS. SO WE'VE TRIED TO KIND OF FOCUS IT SO THAT THERE WILL BE -- THERE WILL BE A NET BENEFIT FOR THE STATE OF IOWA. MY COMMUNITY OBVIOUSLY DOES VERY WELL AT THAT BECAUSE MUCH OF OUR MARKET COMES FROM OMAHA TO OUR FACILITY. AND WE'LL HAVE TO BE SENSITIVE TO DEALING WITH THE CHANGES. IF NEBRASKA ALLOWS CASINOS, WE'LL LOSE MARKET SHARE. Borg: KAY? Henderson: BUT ISN'T ANOTHER ONE OF THE POINTS OF CONTENTION THAT HAS SORT OF GROUND THIS BILL TO A HALT IN THE SENATE, SENATOR LAMBERTI, THE IDEA OF THIS LEGAL SETTLEMENT THAT YOU'RE STRIKING WITH THE TRACKS? IN ADDITION TO THIS BILL, SOME OF YOUR SENATORS DON'T LIKE THE IDEA THAT YOU'RE -- YOU WOULD BE GIVING UP THE RIGHT TO APPEAL THIS CASE TO THE U.S. SUPREME COURT AGAIN. EXPLAIN THAT POINT OF CONTENTION. Lamberti: IT GETS TO BE VERY COMPLICATED. IN WORKING WITH THE ATTORNEY GENERAL, MANY OF US BELIEVE THAT THERE IS AN OPPORTUNITY TO AGAIN APPEAL THIS CASE. I THINK IT'S IMPORTANT FOR PEOPLE TO UNDERSTAND THE PURPOSE OF THAT IS NOT TO GO BACK TO THE OLD 20/36 TAX STRUCTURE, BECAUSE THERE ARE LEGITIMATE ISSUES OF EQUITY ABOUT HOW WE SHOULD TAX THESE FACILITIES. THE ISSUE REALLY FOR US IS WHO SHOULD DETERMINE TAX POLICY, THE IOWA SUPREME COURT OR THE IOWA LEGISLATURE. THIS CASE PUTS IOWA OUT OF LINE WITH VIRTUALLY EVERY OTHER STATE IN THE NATION. WE'D LIKE TO HAVE THE OPPORTUNITY TO APPEAL IT TO GET THAT PRECEDENT OFF THE BOOKS BECAUSE WE BELIEVE IT COULD IMPACT EVERY TAX ON THE BOOKS AND ALSO WHO HAS THE AUTHORITY TO DO IT. AGAIN, OUR PURPOSE HERE IS NOT TO TRY TO BE PUNITIVE TO THE TRACKS AND TO GO BACK TO A 36-PERCENT TAX STRUCTURE. WE WANT THE OPPORTUNITY TO APPEAL. Borg: SENATOR GRONSTAL, BUILDING OFF WHAT SENATOR LAMBERTI JUST SAID, THERE MAY BE SOME OF OUR VIEWERS, MYSELF INCLUDED, WHO REMEMBER GOVERNOR VILSACK SITTING IN THE VERY CHAIR THAT YOU HAVE A FEW WEEKS AGO AND TELLING OUR IOWA PRESS LISTENERS THAT THIS SUPREME COURT DECISION WOULD BE NO PROBLEM, BECAUSE THE STATE LICENSES GAMBLING AND, AS I REMEMBER HIM SAYING, "WE MAKE THE RULES, WE'LL GET THIS THING SETTLED WITH NO PROBLEM." I HEARD SOME REPUBLICANS ALSO SAY SOMETHING LIKE THAT. WHAT FELL APART? Gronstal: WELL, FIRST OF ALL, I DON'T THINK IT'S FALLEN APART YET. Borg: I MEAN WHO HAS THE LEVERAGE HERE? Gronstal: WE'RE CONTINUING TO DEVELOP CONSENSUS ON HOW TO APPROACH THIS. BUT LET ME -- AND THIS IS A MASSIVE OVERSIMPLIFICATION, BUT IF YOU THINK OF IT THIS WAY, THERE ARE THREE STATE SENATORS THAT HAVE TRACKS IN THEIR COMMUNITIES. THERE ARE 47 THAT DON'T. THE LEGISLATURE WILL FIND A WAY TO RECLAIM THIS MONEY. THAT'S GOING TO HAPPEN IN THE END. NOW, THE JOCKEYING THROUGHOUT THE PROCESS FOR COMMUNITIES THAT WANT TO LOOK AT EXPANSION FOR THE RELATIVE BALANCE BETWEEN TRACKS AND RIVERBOATS, THE COMPETITIVE BALANCE BETWEEN SIOUX CITY'S FACILITIES AND COUNCIL BLUFFS, ALL OF THOSE THINGS, THAT'S GOING TO CONTINUE TO BE A PRESSURE. BUT IN THE END 47 SENATORS THAT DON'T HAVE TRACKS WILL FIGURE OUT A WAY TO GET BACK THE LOST REVENUE TO THE STATE OF IOWA. Yepsen: SENATOR GRONSTAL, GOING BACK TO KAY'S QUESTION A MOMENT AGO, DOES THE FACT THE ATTORNEY GENERAL IS WANTING -- THINKING ABOUT APPEALING THIS SUPREME COURT RULING AGAIN, DOES THAT CHANGE THE NEED FOR THE IOWA LEGISLATURE TO DO ANYTHING AT ALL THIS SESSION? Gronstal: I THINK BASED ON -- BASED ON THE STRENGTH OF THE IOWA SUPREME COURT DECISION THAT IT IS NOT EASY TO WALK AWAY FROM THIS AND HOPE THAT THAT'S GOING TO CHANGE. Yepsen: SO THE ATTORNEY GENERAL CAN PURSUE HIS APPEAL, BUT YOU FEEL THE LEGISLATURE STILL NEEDS TO ADDRESS THIS? Gronstal: AND I HAVE MIXED EMOTIONS ABOUT THAT AND I HAVEN'T DONE LEGAL RESEARCH AND I'M NOT AN ATTORNEY. BUT IN THE END I THINK THE U.S. SUPREME COURT SAID IF YOU'RE USING OUR CONSTITUTION TO JUSTIFY THIS NONSENSE, THAT'S NOT WHAT THE U.S. CONSTITUTION MEANS. AND THEN THEY REMANDED IT BACK TO THE IOWA SUPREME COURT AND IN ESSENCE SAID IF YOU WANT TO INTERPRET YOUR STATE -- THE STATE CONSTITUTION IN ANOTHER WAY, GO RIGHT AHEAD. THEY COULD HAVE REVERSED AND NOT REMANDED. Yepsen: A LITTLE TURF GAME IN THE COURTS. Gronstal: AND THEY EVEN HAD THAT DISCUSSION. THEY EVEN HAD THAT DISCUSSION IN THE SUPREME COURT -- THE U.S. SUPREME COURT. THEY COULD HAVE REVERSED AND NOT REMANDED BACK TO THE IOWA COURT. THEY DID NOT DO THAT. SO I'M A LITTLE SKEPTICAL AS TO WHETHER THERE'S MUCH OF A CHANCE THERE, BUT I DON'T MIND AN EFFORT TO PRESERVE THAT CHANCE. BUT I'D ALSO SAY HAD WE LAST YEAR, BETWEEN THE REGULAR SESSION AND THE SPECIAL SESSION, ONCE THE IOWA SUPREME COURT -- ONCE THE U.S. SUPREME COURT RULED, HAD WE THEN PASSED A COMPROMISE, I THINK THE IOWA SUPREME COURT COULD HAVE FOUND A WAY TO BACK OFF AND SAY THE LEGISLATURE HAD COME UP WITH -- HAD MOOTED THE ISSUE, AND THEY COULD HAVE BACKED OFF THEIR ORIGINAL DECISION. AND I THINK IT WAS A MISTAKE LAST YEAR NOT TO PURSUE THE COMPROMISE THAT WAS AVAILABLE TO US THEN. Borg: WHY WASN'T THAT PURSUED, SENATOR LAMBERTI? Lamberti: WELL, FOR A LOT OF THE SAME REASONS WHERE WE'RE AT NOW IS WE WERE CONTINUING TO PURSUE WANTING TO GET THIS OFF THE BOOKS. WE WEREN'T COMFORTABLE THAT IF WE SETTLED IT THAT THAT WOULD BE THE OUTCOME. AND SO IT'S REALLY SOME OF THE ATTORNEYS IN MY CAUCUS WHO WANT TO BELIEVE THEY WANT TO GET THIS RESOLVED. THEY WANT TO TAKE IT BACK. AND WE HAD NUMEROUS OPPORTUNITIES LAST YEAR I THINK TO SETTLE IT, AND WE DECIDED TO LET IT PROCEED. AND OBVIOUSLY WE'RE -- A YEAR LATER WE'RE STILL WORKING ON IT. Gronstal: AND I ALWAYS LIKE TO REMIND ATTORNEYS THAT ON AVERAGE, SINCE THERE'S ALWAYS TWO SIDES IN A CASE, ON AVERAGE LAWYERS ARE WRONG 50 PERCENT OF THE TIME. Henderson: LET'S TALK ABOUT THE PLAYERS. OBVIOUSLY YOU TWO GUYS ARE PLAYERS IN THIS SETTLEMENT AND IN THE DEVELOPMENT OF THE BILL. ARE THE FOLKS WHO ARE ADVOCATING THAT THE SENATE DO SOMETHING DIFFERENT THAN THE HOUSE DID -- THE HOUSE-PASSED BILL DOES NOT ALLOW EXPANSION. ARE THESE SIX COUNTIES EFFECTIVELY LOBBYING SENATORS? AND WHAT'S YOUR READ, SENATOR LAMBERTI, ON WHETHER THE SENATE WOULD VOTE FOR EXPANSION? Lamberti: I THINK IT WOULD BE A VERY CLOSE VOTE. AND ARE THEY ADVOCATING FOR THEIR POSITION? VERY EFFECTIVELY. THEY'VE BEEN UP THERE, I THINK, VIRTUALLY EVERY DAY SINCE THE HOUSE PASSED THE BILL, SO THEY'RE ADVOCATING FOR THEIR POSITION. RIGHT NOW I THINK IT WOULD BE A VERY CLOSE VOTE, AND THAT'S OKAY. I THINK WE OUGHT TO HAVE IT, AND IT DOES IMPACT OUR DECISION-MAKING. AS I TRY TO LOOK AT THE BILL THAT CAME OVER FROM THE HOUSE AND MAKE THIS WHAT I WOULD CALL REVENUE NEUTRAL OR HOPEFULLY VERY CLOSE TO THAT -- Henderson: AND BY THAT YOU MEAN COLLECT THE SAME AMOUNT OF TAX? Lamberti: RIGHT. OR ROUGHLY THE SAME AMOUNT. I'M LOOKING NOT JUST AT FISCAL YEAR 2005, BUT I'VE GOT TO LOOK BEYOND THAT. WHAT HAPPENS ON THE ISSUE OF EXPANSION CAN HAVE AN IMPACT ON THAT. Yepsen: SENATOR GRONSTAL, THE ISSUE OF -- THE IDEA OF A STATEWIDE PROPERTY TAX HAS BEEN FLOATED AS A WAY -- ON THESE INSTITUTIONS HAS BEEN FLOATED AS A WAY TO SORT OF QUICKLY GET BACK THIS REVENUE. IS THAT A VIABLE OPTION -- SOLUTION HERE IN YOUR MIND? Gronstal: NOT IN MY VIEW. THAT'S NOT A VIABLE OPTION. THAT'S NOT ONE THAT THE HOUSE WOULD SERIOUSLY CONSIDER. MY VIEW IS THAT THAT ADDS ANOTHER TWO WEEKS TO THE SESSION. THE SENATE COULD STRUGGLE THROUGH THAT. THEY COULD PROBABLY FIND ENOUGH REPUBLICAN VOTES AND A FEW DEMOCRATIC VOTES TO GO ALONG WITH THAT AND GET IT PASSED. I JUST THINK THAT -- I DON'T THINK THAT LEADS US TO RESOLUTION; I THINK IT LEADS US AWAY FROM RESOLUTION. Henderson: THIS PAST WEEK GOVERNOR VILSACK SAID, YOU KNOW, MAYBE THEY SHOULD CONSIDER AGAIN THE PROPOSAL THAT I LAID OUT THERE THAT WOULD TAX GAMBLING INSTITUTIONS ON SORT OF A PROGRESSIVE RATE IN THE SAME WAY PEOPLE ARE TAXED ON THEIR INCOME. IS THAT A LIVE ROUND, SENATOR LAMBERTI? Lamberti: PROBABLY NOT. I MEAN I THINK THE ISSUE OF EQUITY IN SOME FASHION IS UNDER DISCUSSION, AND I WOULD AGREE THAT'S PROBABLY WHY A PROPERTY TAX WOULD NOT, BECAUSE THAT WOULD GO BACK TO A PRETTY DISPARATE TREATMENT OF THESE FACILITIES. BUT WE HAVE PROBLEMS WITH THE PLACES THAT HAVE BOATS WHO WILL SIT BACK AND SAY: "WE DIDN'T HAVE ANYTHING TO DO WITH CAUSING THIS PROBLEM. WHY DO YOU WANT TO INCREASE OUR TAXES SIGNIFICANTLY?" NOW, TO THEIR CREDIT, AS WE -- AS THE HOUSE WORKED ON THEIR BILL, THERE IS A 2-PERCENT INCREASE GENERALLY FOR THE BOATS, WHICH DOES HELP ADDRESS OUR FINANCIAL SITUATION. Gronstal: AND I THINK THAT'S SIGNIFICANT. I THINK THE BOATS STEPPED FORWARD ON THAT. BUT I WOULD SAY WHEN WE ORIGINALLY PASSED THIS TAX SCHEME, THERE WERE -- THE SENATE DID NOT PASS IT THE FIRST TIME, THE SENATE BILL TO THE HOUSE. AND THEY INSERTED THIS DIFFERENTIAL TAX BACK IN '94, I BELIEVE, SO THAT'S KIND OF WHEN THE PROBLEM WAS CREATED. AND TO SOME EXTENT, OBVIOUSLY THE RIVERBOAT INDUSTRY CERTAINLY DIDN'T MIND DIFFERENTIAL TAX TREATMENT, WHERE ONE OF THEIR COMPETITORS WAS GOING TO HAVE THEIR TAXES GO UP. SO IT'S NOT AS IF ALL OF THOSE INSTITUTIONS ARE WITHOUT BLAME. I MEAN IT WAS REALLY SIOUX CITY WERE THE KEY VOTES, THE KEY LEGISLATIVE VOTES, SIOUX CITY THAT CHANGED THIS TAX SCHEME IN SUCH A WAY. AND IT WAS PARTLY OUT OF JEALOUSY OF WHAT WAS GOING ON IN COUNCIL BLUFFS. Yepsen: SENATOR LAMBERTI, ONE MORE QUESTION ON THIS. WE SPEND A LOT OF TIME WITH THIS BY DESIGN BECAUSE IT'S A COMPLICATED ISSUE AND WE WANT PEOPLE TO UNDERSTAND WHAT'S GOING ON HERE. YOU'VE GOT CONSTITUTIONAL ISSUES. YOU'VE GOT TAX ISSUES. YOU NEED REVENUE. YOU'VE GOT PEOPLE WHO DON'T LIKE ANY GAMBLING AT ALL. YOU'VE GOT PEOPLE WHO DON'T WANT TO HANDICAP THEIR LOCAL GAMBLING INSTITUTION BY EXPANDING IT SOMEWHERE. IT'S TOUGH. AT THE END OF THE DAY, HOW DO YOU EXPECT THIS ISSUE WILL BE RESOLVED? Lamberti: WELL -- Yepsen: GIVE ME YOUR BEST ANSWER. Lamberti: IT'S GOING TO BE INTERESTING, BUT I WILL. WE WILL RESOLVE THE TAX ISSUE, CERTAINLY MAYBE NOT TO THE SATISFACTION OF ALL THE VARIOUS PLAYERS, BUT I THINK IT'S GOING TO REQUIRE A LITTLE BIT OF GIVE AND TAKE ON EVERYBODY'S PART. I THINK THE MAIN ISSUE I HAVE TO RESOLVE -- WE HAVE TO RESOLVE IS THE TAX ISSUE. I FEEL CONFIDENT WE WILL DO THAT. MY GOAL WOULD THEN BE, AFTER HAVING SETTLED THAT, TO BRING THE HOUSE BILL UP FOR DEBATE -- ALTHOUGH WE DON'T HAVE TO IF WE CAN SOLVE THE TAX ISSUE IN SOME OTHER FASHION -- AND LET PEOPLE HAVE THE OPPORTUNITY TO DISCUSS ISSUES LIKE EXPANSION, WHETHER THE BOATS SHOULD CRUISE ANYMORE, MUCH LIKE THE HOUSE DID. AND THE OUTCOME ON EXPANSION AND SOME OF THE OTHER ISSUES WILL TAKE ITS COURSE. AND FROM A TAX PERSPECTIVE, I DON'T CARE THAT MUCH WHAT THE OUTCOME IS IF I SOLVE THE TAX ISSUE. I WILL SOLVE THE TAX ISSUE, AND THEN WE'LL LET EVERYTHING ELSE PLAY OUT. Yepsen: SENATOR GRONSTAL, SAME QUESTION TO YOU. AS YOU LOOK AT THE LAY OF THE LAND HERE, HOW DO YOU EXPECT THIS ISSUE TO BE RESOLVED? Gronstal: WELL, I EXPECT IT TO BE RESOLVED AS EVERY GAMING BILL HAS BEEN RESOLVED IN THE LEGISLATURE FOR THE LAST TWENTY-TWO YEARS. IT WILL BE A BILL THAT THE FINAL RESOLUTION IS ON THE LAST DAY OF THE SESSION. IT WILL BE HARD FOUGHT. IT WILL BE A VERY CLOSE VOTE. IT WILL BE BROADLY AND DEEPLY BIPARTISAN. THERE WILL BE PEOPLE IN BOTH PARTIES THAT IN THE END DECIDE WHAT THE OUTCOME WILL BE. I'M PRETTY CONFIDENT THERE'S A MAJORITY OF SENATE DEMOCRATS TO SUPPORT SOME FORM OF EXPANSION. I'M VERY CONFIDENT THERE'S A MAJORITY OF SENATE DEMOCRATS TO RECLAIM THE LOST REVENUE TO THE STATE SO THAT OUR INFRASTRUCTURE FUND IS MADE WHOLE. IT ALWAYS TAKES TWISTS AND TURNS. EVERY BILL -- THE BILLS -- I HANDLED EVERY SINGLE ONE OF THEM -- ON THE FIRST VOTE FAILED. WE HAD TO GET A MOTION TO RECONSIDER, COME UP WITH A LITTLE MORE COMPROMISE, COUNT THE VOTES A LITTLE BETTER, AND PASS IT THE SECOND TIME. Henderson: ONE OF THE OTHER ISSUES THAT REMAINS IN THE WAY OF ADJOURNMENT UP THERE IS EDUCATION FUNDING. THE GOVERNOR IS SEEKING MORE MONEY. DEMOCRATS ARE SEEKING MORE MONEY. WILL REPUBLICANS PROVIDE ANY MORE MONEY IN THE '05 FISCAL YEAR, WHICH STARTS IN JULY, OR PROVIDE ANY MORE MONEY FOR SCHOOLS IN THE NEXT ACADEMIC YEAR, SENATOR LAMBERTI? Lamberti: I THINK WHEN YOU LOOK AT '05, WE'VE GOT THE PARAMETERS OF OUR BUDGET PUT TOGETHER. AND WHAT WE'VE INDICATED TO THE GOVERNOR, THERE IS NO MORE MONEY TO SPEND. AND IF YOU WANT TO TALK ABOUT SHIFTING MONEY WITHIN THE CONFINES OF HOW MUCH MONEY WE HAVE AVAILABLE, WE'RE CERTAINLY WILLING TO DO THAT. A LOT OF THIS DISCUSSION ABOUT EDUCATION FUNDING IS ACTUALLY FOCUSED ON FISCAL YEAR 2006, AND I'M NOT SURE THE AVERAGE CITIZEN UNDERSTANDS THAT'S A YEAR THAT STARTS SIXTEEN MONTHS FROM NOW. AND WE WOULD PREFER TO SIMPLY WAIT AND DO THAT WHEN WE KNOW HOW MUCH MONEY WE'RE GOING TO HAVE TO SPEND. ONE OF THE INTERESTING THINGS, WE HAVE A REVENUE ESTIMATING CONFERENCE, PROFESSIONALS, THEY SET OUR REVENUE ESTIMATES THAT WE BUDGET BY. THEY CAME IN AND MET A COUPLE WEEKS AGO, SO SPEAKER RANTS AND MYSELF, WE WROTE A LETTER TO THEM ASKING THEM TO GIVE US A PREDICTION FOR OUR REVENUES FOR 2006 DIRECTLY TIED TO THE ISSUE OF K-12 EDUCATION FUNDING SO WE HAD A HANDLE ON WHAT THAT NUMBER WOULD BE. THEY CAME BACK TO US AND SAID, "WE CAN'T. IT'S SIMPLY TOO FAR INTO THE FUTURE. THERE'S NO WAY WE CAN GIVE YOU A NUMBER FOR REVENUES THAT MEANS ANYTHING." AND YET NOW WE'RE FIGHTING OVER SETTING THAT NUMBER WHEN EVEN OUR PROFESSIONALS TELL US WE SHOULDN'T DO THAT. Gronstal: BUT I THINK DEMOCRATS ARE CONCERNED ABOUT '05. I THINK WE'RE CONCERNED ABOUT NEXT YEAR. WE HAVE SURVEYED SCHOOL SUPERINTENDENTS, SCHOOL TEACHERS. WE'VE TALKED WITH ORGANIZATIONS. WE'VE GONE OUT TO COMMUNITIES. WE'RE GOING TO HAVE A DEVASTATING IMPACT ON K-12 EDUCATION IN '05. Borg: BECAUSE WHY? Gronstal: BECAUSE TWO-THIRDS OF ALL SCHOOL DISTRICTS WILL SEE NO GROWTH IN THEIR BUDGET BASED ON WHAT'S IN THIS BUDGET. Yepsen: BUT ISN'T IT TRUE, SENATOR, THAT -- Henderson: THAT'S BASED ON THEIR ENROLLMENT TOO. Lamberti: THAT'S CORRECT. Yepsen: SENATOR GRONSTAL, ISN'T IT TRUE THAT THERE'S ONLY ABOUT $20 MILLION OF DIFFERENCE AT THIS POINT BETWEEN WHAT THE REPUBLICANS WANT TO DO AND WHAT THE DEMOCRATIC GOVERNOR WANTS TO DO? ISN'T THAT '05 QUESTION SETTLED BY SPLITTING THE DIFFERENCE? Gronstal: ACTUALLY JEFF SAID A COUPLE WEEKS AGO OUR REVENUE ESTIMATING CONFERENCE MET. ONE OF THE THINGS THEY TOLD US IS WE'LL HAVE 30 MILLION MORE DOLLARS THIS YEAR AND 52.2 MILLION MORE FOR FISCAL '05. DEMOCRATS PROPOSED TAKING THAT 52.2 MILLION AND MOVING FROM TWO-THIRDS OF SCHOOL DISTRICTS WITH NO GROWTH IN THEIR BUDGET TO TWO-THIRDS THAT WOULD GET SOME GROWTH NEXT YEAR. Yepsen: SENATOR, THAT'S -- Gronstal: THAT'S NEW-FOUND MONEY, DAVID. THAT WASN'T CALCULATED INTO THE REPUBLICANS' BUDGET NUMBERS EARLIER WHEN THEY SET THEIR TARGETS. THAT'S NEW-FOUND MONEY, $52.2 MILLION. I THINK WE STILL HAVE A CHANCE TO DO MORE FOR K-12 EDUCATION. Yepsen: WHAT ABOUT THE ARGUMENT THOUGH, SENATOR, THAT YOU'RE BETTING ON THE COME WHEN YOU DO THAT? THE STATE HAS BEEN BURNED BY BAD REVENUE ESTIMATES BEFORE. WOULDN'T YOU BE BETTER OFF TO TELL THE SCHOOLS, OKAY, WE'LL GIVE YOU SOME IF WE ACTUALLY GET IT, BUT DON'T MAKE A PROMISE YOU MAY NOT BE ABLE TO KEEP. Gronstal: AFTER FOUR YEARS OF BUDGET CUTS TO K-12 EDUCATION, AFTER FOUR YEARS OF LAYING OFF TEACHERS, IT'S TIME FOR US -- I MEAN WE'RE BETTING ON THE COME IN A HOST OF OTHER AREAS. WHY CAN'T WE DO IT FOR IOWA SCHOOL KIDS? Lamberti: FIRST OF ALL, I THINK WE NEED TO DEFINE "CUT." I HAVE A LOT OF BELIEF IN THE COMMON SENSE KNOWLEDGE AND ABILITY OF THE AVERAGE IOWAN, AND I THINK THEY BELIEVE A CUT IS A REDUCTION. IT'S NOT GOVERNMENT TALK WHERE A CUT IS A REDUCTION IN AN INCREASE. THE FACT IS OVER THE LAST FIVE YEARS, K-12 FUNDING HAS INCREASED BY $300 MILLION, AND WE HAVE 18,000 FEWER STUDENTS. THAT IS THE BIG PROBLEM WE HAVE IN K-12 EDUCATION IS THAT WE ARE LOSING ENROLLMENT, AND THAT'S GOING TO CONTINUE. FOR '05 WE'RE PROPOSING $109 MILLION IN NEW SPENDING, AND WE WILL PROBABLY SEE A DECLINE AGAIN IN ENROLLMENT. AT BEST IT WILL REMAIN CONSTANT. SO WE'RE GOING TO BE SENDING OUT $109 MILLION MORE TO EDUCATE THE SAME NUMBER OF STUDENTS. Henderson: TWO WEEKS AGO THE STATE AUDITOR MADE AN ASSESSMENT OF THE BUDGET PLANS ADVANCED BY THE GOVERNOR A FEW MONTHS AGO, AND THEN HE ANALYZED THE REPUBLICAN BUDGET PLAN. HE WASN'T TOO COMPLIMENTARY. HE SAID YOU'RE SPENDING DOWN ALMOST TO THE LAST DIME AND THAT YOU NEED TO COME UP WITH A REPAYMENT SCHEDULE FOR ALL THE FUNDS THAT YOU'VE RAIDED. WHAT DO YOU SAY TO THE AUDITOR'S QUESTIONS THAT HAVE BEEN RAISED ABOUT YOUR BUDGET-MAKING? Lamberti: I WOULD AGREE WITH THE AUDITOR IN LARGE RESPECT. WE ARE -- ESSENTIALLY WHAT WE'RE DOING IS WE'RE GOING TO EMPTY OUR RESERVE ACCOUNTS, OUR RAINY DAY FUNDS, BECAUSE WE BELIEVE IF YOU HAVE MONEY IN THE BANK, IT MAKES MORE SENSE TO SPEND IT THAN TO RAISE TAXES. THAT'S ONE DISPUTE I HAVE WITH THE AUDITOR. THE ALTERNATIVE BEING TO RAISE TAXES, I THINK IT'S BETTER TO SPEND THE MONEY THAT YOU HAVE. I BELIEVE WE HAVE PUT IN PLACE MECHANISMS TO REPAY THE SENIOR LIVING TRUST FUND, AS WELL AS FILL OUR RESERVES BACK UP. THE AUDITOR ALSO INDICATED THAT HE THOUGHT WE WERE LEADING TO A TAX INCREASE. I DISAGREE WITH HIM ON THAT POINT. AND WE'VE GONE THROUGH THREE OR FOUR OF THE TOUGHEST YEARS IN THE LAST FORTY YEARS AND WE'VE DONE IT WITHOUT RAISING TAXES. I THINK WE CAN DO IT AGAIN. Yepsen: SENATOR GRONSTAL, ON ANOTHER SUBJECT -- Gronstal: WELL, I'VE GOT TO RESPOND. THEY HAVEN'T RAISED TAXES? ACCORDING TO THE IOWA FARM BUREAU, PROPERTY TAXES HAVE GONE UP $240 MILLION. THEY'VE DONE ANOTHER $15-MILLION INCREASE IN PROPERTY TAXES IN THE BUDGET BILL THEY JUST PASSED AND $20 MILLION MORE BECAUSE THEY'RE UNDERFUNDING THE PROPERTY TAX CREDITS. IT'S GREAT RHETORIC TO SAY YOU'RE AGAINST RAISING TAXES AND NOT TAKE ANY DIRECT ACTION UP AT THE CAPITOL. IT'S GREAT RHETORIC, BUT IT SIMPLY ISN'T TRUE. PROPERTY TAXES ARE GOING UP AS A DIRECT RESULT OF WHAT REPUBLICANS HAVE DONE IN THE BUDGET. Yepsen: WE HAVE TOO LITTLE TIME AND TOO MANY QUESTIONS. SENATOR GRONSTAL, AIR QUALITY. THERE IS A HUGE DEBATE IN THE LEGISLATURE OVER WHETHER THE STANDARDS THAT SHOULD BE USED TO MEASURE AIR QUALITY IN IOWA. HOW, IF AT ALL, WILL THAT ISSUE GET RESOLVED IN THIS SESSION? Gronstal: WELL, I SAW THIS WEEK, THE AG COMMUNITY MOVE A STEP TOWARDS THE ENVIRONMENTALISTS. I DON'T KNOW HOW MANY STEPS APART THEY ARE, BUT I SAW THE AG COMMUNITY THIS WEEK TAKE A STEP TOWARD THE ENVIRONMENTAL COMMUNITY. AND WE SENT A BILL TO THE HOUSE. NOW, CERTAINLY IF THAT BILL STAYS IN THE FORM IT'S IN, IT'S DESTINED TO A CERTAIN VETO. BUT I SAW THE AG COMMUNITY MAKE A MOVE TODAY, AND I SUPPORTED THEM IN THAT EFFORT. Yepsen: SENATOR LAMBERTI, SAME QUESTION. WHAT'S GOING TO HAPPEN WITH THIS ISSUE? Lamberti: WELL, I THINK THE HOUSE WILL CONTINUE TO WORK ON IT. I WOULD AGREE WITH WHAT MIKE SAID, WE'RE GETTING CLOSER TO A RESOLUTION. WHAT WE DO KNOW IS I THINK THERE'S BROAD CONSENSUS THAT THE RULES THAT WERE PROPOSED ARE NOT WORKABLE AND WE HAVE THE FIND A SOLUTION TO THAT. AND I'LL GIVE MIKE SOME CREDIT FOR WORKING IN THE SENATE TO TRY TO MOVE THAT PROCESS ALONG. WE HOPE TO HAVE A BILL THAT WE CAN GET SIGNED INTO LAW. Borg: LET ME GO BACK TO THE ECONOMY. DO RISING STEEL PRICES, PEOPLE DELAYING CONSTRUCTION BECAUSE OF THAT, AND GASOLINE PRICES WHERE THEY ARE NOW WORRY YOU ABOUT IOWA'S RECOVERY? Lamberti: WE'RE ALWAYS WORRIED ABOUT FORCES THAT WE DON'T HAVE A LOT OF DIRECT CONTROL OVER; HOWEVER, I WILL SAY WE ARE SEEING AN ECONOMIC REBOUND AND WE'RE ACTUALLY USING THAT AS WE MAKE BUDGET PREDICTIONS. Borg: THE STATE OF FLORIDA, I JUST SAW THIS WEEK, IS CONSIDERING RIGHT NOW, IN ITS LEGISLATURE, TAKING OFF THE STATE GAS TAX IN ORDER TO GIVE SOME OF THEIR CITIZENS A BREAK DURING THIS TIME OF -- IS ANYTHING LIKE THAT POSSIBLE IN THE IOWA STATE LEGISLATURE? Lamberti: WELL, WHEN YOU'RE OPERATING ON A BUDGET THAT HAS ABOUT $10 MILLION IN NEW REVENUE AND EVEN THOUGH SOME OF THAT WOULD BE -- MOST OF IT WOULD BE IN THE ROAD USE TAX FUND. WE HAVEN'T TALKED ABOUT IT. WITH A WEEK OR TWO LEFT IN THE SESSION, I DON'T THINK IT'S SOMETHING WE'RE GOING TO DO THIS YEAR. WE MAY TAKE A LOOK AT IT LATER IN THE YEAR. Henderson: ANOTHER THING PEOPLE ARE STARTING TO TALK ABOUT IS THE PROPERTY TAX REFORM. IS THERE THE LIKELIHOOD, IN THE LAST COUPLE WEEKS OF THE LEGISLATIVE SESSION, THAT THERE WILL BE SOME MAJOR OVERHAUL OF THE PROPERTY TAX SYSTEM? YOU ARE GOING TO DUMP WHAT YOU TRIED TO DO LAST YEAR. ARE YOU GOING TO HAVE SOMETHING IN ITS PLACE? Lamberti: WELL, I THINK THE DETERMINATION WAS THAT THE SQUARE-FOOT MODEL IS NOT GOING TO WORK, BUT WE ARE GOING TO CONTINUE TO HAVE THOSE PEOPLE WORK FOR A LONG-TERM SOLUTION. I THINK THE MOST SIGNIFICANT THING THAT'S GOING TO COME OUT IN THE AREA OF PROPERTY TAX IS -- MIKE TALKS ABOUT THAT WE FORCED LOCAL PROPERTY TAX INCREASES. I DISAGREE WITH THAT BECAUSE I CAN POINT TO LOCAL GOVERNMENT OFFICIALS ALL OVER THE STATE OF IOWA WHO DID WHAT WE'VE DONE IN THE LAST FEW YEARS, AND THAT'S MAKING DIFFICULT DECISIONS WITHOUT RAISING TAXES. AND I THINK THEY HAVE DONE THAT. SOME HAVE NOT DONE IT AS WELL. WE ARE GOING TO BRING UP A BILL THAT WILL LIMIT PROPERTY TAX INCREASES. AND I GUESS IF WE REALLY WANT TO TALK ABOUT WHO'S FOR KEEPING THE LID ON PROPERTY TAXES, WE'RE GOING TO HAVE THAT DEBATE AND WE'RE GOING TO FIND OUT. Gronstal: YOU KNOW, IF YOU CAN'T SOLVE YOUR OWN PROBLEMS BALANCING YOUR OWN BUDGET, IT'S ALWAYS GREAT FUN TO POINT TO SOME OTHER ENTITY AND SAY, OH, IT'S THOSE CITIES OR THOSE COUNTIES THAT ARE CREATING THE PROBLEMS. Yepsen: BUT, SENATOR GRONSTAL -- Gronstal: WE HAVEN'T BALANCED OUR OWN BUDGET. Yepsen: WHY NOT PUT A CAP ON LOCAL GOVERNMENTS AND FORCE THEM TO MAKE THE CHANGES YOU FOLKS HAVE HAD TO MAKE? Gronstal: THE SITUATION WE'RE IN RIGHT NOW IS CITIES AND COUNTIES AND SCHOOL DISTRICTS HAVE BEEN DEVASTATED BY CUTS FROM THE LEGISLATURE. ROUND NUMBERS, $300-MILLION PROPERTY TAX INCREASE -- Borg: AND I HAVE TO CUT TOO. WE'RE OUT OF TIME. THANK YOU VERY MUCH FOR BEING HERE. ON OUR NEXT EDITION OF "IOWA PRESS," WE'LL GET PERSPECTIVE ON THE LEGISLATIVE SESSION AND OTHER ITEMS ON THE POLITICAL LANDSCAPE FROM STATEHOUSE REPORTERS. THAT WILL BE AT OUR REGULAR TIME, 7:30 FRIDAY. AND OF COURSE, YOU CAN SEE THE PROGRAM AGAIN AT NOON ON SUNDAY. I HOPE YOU'LL LISTEN IN ON OUR REPORTERS ROUNDTABLE DISCUSSION NEXT WEEK ON STATEWIDE IOWA PUBLIC TELEVISION. I'M DEAN BORG. THANKS FOR JOINING US TODAY. CAPTIONS BY: MIDWEST CAPTIONING DES MOINES, IOWA. 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. |
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