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(#3135)
April 23, 2004

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IOWA PRESS #3135>>

Borg: IOWA LEGISLATORS CLOSE THE SESSION AND HEAD HOME FOR ELECTION CAMPAIGNING. 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, APRIL 23 EDITION OF "IOWA PRESS." HERE IS DEAN BORG.

Borg: THIS PAST TUESDAY, AT 5:21 IN THE AFTERNOON, IOWA LEGISLATORS CLOSED THEIR LAPTOP COMPUTERS AND HEADED HOME. THEY'D BEEN IN SESSION FOR 99 DAYS, BUT IT CAME DOWN TO THE FINAL HOURS TO ACHIEVE COMPROMISES ON EDUCATION FUNDING AND STATE LICENSED GAMBLING. THOSE AGREEMENTS WERE THE FINAL COMPONENTS IN A VERY AUSTERE STATE BUDGET THAT TAKES EFFECT IN JULY. MOST EVERYONE AGREES THAT IT'S SO AUSTERE THAT MANY STATE EMPLOYEES WILL LOSE THEIR JOBS. THEY, OF COURSE, ARE AMONG THE LOSERS IN THIS LEGISLATIVE SESSION, BUT THERE ARE OTHERS, INCLUDING THOSE WHO STAND TO LOSE OR GAIN POLITICALLY FROM THE JUST-CONCLUDED SESSION. WE'LL GET MORE ON THAT SUBJECT FROM "DES MOINES REGISTER" POLITICAL COLUMNIST DAVID YEPSEN, "RADIO IOWA" NEWS DIRECTOR KAY HENDERSON, "ASSOCIATED PRESS" STATEHOUSE REPORTER DAVE PITT, AND "WOI PUBLIC RADIO" STATEHOUSE REPORTER JOYCE RUSSELL. KAY, WAS IT A MATTER OF TIME'S UP, PAY HAS RUN OUT, OR WERE THERE REALLY MEANINGFUL COMPROMISES THAT YIELDED MEANINGFUL LEGISLATION IN THOSE FINAL HOURS?

Henderson: WELL, HEADING INTO THE MONDAY AND TUESDAY -- THE LAST MONDAY AND TUESDAY OF THIS GENERAL ASSEMBLY, THEY'D ALREADY MADE AN AGREEMENT ON GAMBLING. WHAT THEY NEEDED TO DO WAS RESOLVE THEIR DIFFERENCES BETWEEN THE GOVERNOR'S OFFICE AND REPUBLICAN LEGISLATORS ON EDUCATION FUNDING. AND ALSO, THERE WAS A BREWING DISPUTE BETWEEN HOUSE REPUBLICANS AND SENATE REPUBLICANS OVER THE STATE'S COMMITMENT TO ECONOMIC DEVELOPMENT PROGRAMS. SO IN THE FINAL HOURS THERE WAS AN AGREEMENT ON EDUCATION FUNDING, WHICH SAW THE STATE LEGISLATURE AND THE GOVERNOR PROMISE SCHOOLS THAT IN THE 2005-2006 SCHOOL YEAR, THEY'RE GOING TO GET A 4-PERCENT INCREASE IN GENERAL STATE AID THAT'S PAID ON A PER STUDENT BASIS. THAT WAS A THING THAT -- A BUGABOO THAT HAD REALLY HELD UP THE WORKS RIGHT TO THE FINAL HOURS. THERE WAS ALSO AN AGREEMENT IN THE FINAL HOURS THAT THE COMMUNITY ATTRACTIONS AND TOURISM PROGRAM, WHICH IS ONE OF THE PREMIERE STATE ECONOMIC DEVELOPMENT PROGRAMS THAT HAVE HELPED BUILD GAZEBOS AND SPRUCE UP SWIMMING POOLS IN SMALL TOWNS ALL ACROSS THE STATE, THEY'RE GOING TO PLOW MORE MONEY INTO THAT, BUT THEY'RE ALSO GOING TO LET THAT BE USED FOR OTHER SIZABLE PROJECTS. SO THEY PUT A LITTLE BIT MORE MONEY INTO THAT PROGRAM. AND THOSE WERE THE TWO REMAINING THINGS THAT NEEDED TO BE RESOLVED, AND THEN THEY LEFT.

Borg: WAS THIS FUND, THIS "SUPER CAT" AS IT'S CALLED, COMMUNITY ATTRACTIONS AND TOURISM, DAVE, HOW DID YOU SEE IT? WAS THAT SORT OF A COMPROMISE BETWEEN THE BIG BORROWING THAT TOOK PLACE IN THE LAST SESSION AND THIS, WHICH IS FOR JUST SMALLER GRANTS?

Pitt: I THINK IT WAS. AND I THINK THE WAY IT ENDED, IT REALLY LED, I THINK, TO A KIND OF CONTENTIOUS END TO THE SESSION BECAUSE THERE WERE ALLEGATIONS FROM HOUSE MEMBERS THAT IT WAS A DUMP-AND-RUN BUDGET, THAT THE SENATE KIND OF CRAFTED THAT AND THREW IT OVER TO THE HOUSE. AND THE HOUSE HAD EARLIER PASSED A MUCH LARGER PLAN THAT DID RELY ON BORROWING. AND I THINK SOME PEOPLE SEE IT AS A MORE RESTRICTIVE PLAN. IT STILL WILL ALLOW I THINK A SIX-YEAR PLAN, $12 MILLION A YEAR. SO COMMUNITIES CAN APPLY FOR MONEY AND STILL GET SOME MONEY.

Russell: BUT REPUBLICANS WERE DIVIDED AMONG THEMSELVES ON THERE -- ON THAT, AND HOUSE SPEAKER CHRISTOPHER RANTS ADMITTED, HE SAID, "I JUST MISREAD THE WILL OF THE BODY ON THIS." LATE NIGHT RIGHT BEFORE MIDNIGHT ONE NIGHT, AN AMENDMENT CAME UP TO PROVIDE FOR LONG-TERM BORROWING, A MUCH MORE EXPANSIVE, EXPENSIVE PROGRAM. AND I BELIEVE HIM WHEN HE SAID HE WAS SURPRISED THAT IT PASSED. IT PASSED AND SO THAT'S WHAT THEY HAD TO WORK OUT, AS KAY SAID, A DISAGREEMENT AMONG REPUBLICANS THEMSELVES ON HOW MUCH THEY WERE GOING TO SPEND AND WHETHER THEY WERE GOING TO BORROW LONG TERM FOR ECONOMIC DEVELOPMENT.

Henderson: AND THIS IS A DISAGREEMENT THAT DATES BACK TO LAST YEAR. I MEAN REPUBLICANS IN THE HOUSE WERE WILLING LAST YEAR TO MAKE A LONG-TERM COMMITMENT TO THIS NEW VISION IOWA PROGRAM; WHEREAS, REPUBLICANS IN THE SENATE, A BIT -- TAD MORE CONSERVATIVE WERE NOT. SO THIS IS A DISPUTE THAT'S BEEN GROWING. IT'S UNRESOLVED TO THIS DATE.

Pitt: AND ON ECONOMIC DEVELOPMENT TOO, DEAN, ONE LAST THING THEY DID NOT DO IS FUND THE IOWA VALUES FUND, WHICH IS GOING TO HAVE TO BE ONE OF THE FIRST THINGS THEY TAKE UP NEXT YEAR. AS ECONOMIC DEVELOPMENT DIRECTOR MIKE BLOUIN SAYS, THEY'RE GOING TO PROBABLY RUN OUT OF MONEY SOMETIME IN FEBRUARY. AND AS HE SAYS, THE STATE LOSES CREDIBILITY WHEN IT LOSES MONEY TO CONTINUE SOME OF THAT FUNDING, SO THAT'S ANOTHER ECONOMIC DEVELOPMENT ISSUE THAT'S STILL LINGERING.

Yepsen: THAT VALUES FUND GOT CAUGHT UP IN A WHOLE LOT OF POLITICS. YOU GO BACK TO THE LAST SESSION; THE GOVERNOR WANTED THIS VALUES FUND TO BORROW SOME MONEY, INVEST IN BIG PROJECTS. REPUBLICANS SAID, FINE, WE DON'T NECESSARILY LIKE THAT BUT WE'LL GO ALONG WITH THIS IF YOU -- IF WE HAVE SOME LIMITS ON TORT REFORM AND GOVERNMENT REGULATIONS AND TAX CUTS. WELL, VILSACK TOOK ALL THAT, AS WE KNOW, AND THEN HE VETOED OUT WHAT THE REPUBLICANS WANTED. WELL, THEY WENT THROUGH THE ROOF, FEELING THAT HE DIDN'T KEEP HIS DEAL WITH THEM. AND HE'S BEEN RUNNING AROUND THE STATE NOW CUTTING ALL THESE RIBBONS, GETTING ALL THIS POLITICAL CREDIT, GIVING THEM NONE, AND THEY'RE FURIOUS ABOUT THAT. SO THIS WAS A DEAL WHERE THEY WEREN'T GOING TO GIVE TOM VILSACK MORE MONEY FOR THIS VALUES FUND, NOT THAT THE VALUES FUND ISN'T WORKING BUT, POLITICALLY, THEY WEREN'T HAPPY WITH WHAT HE DID TO THEM.

Borg: ALSO, THE VALUES FUND PROBABLY SUFFERED THIS YEAR BECAUSE THERE WAS SOME CONTENTIOUS CRITICISM THAT THEY DIDN'T TAKE ADVANTAGE OF LOW INTEREST RATES IN ORDER TO RE-FUND THAT VALUES FUND, BUT IT GOT INTO POLITICS.

Yepsen: ALL THINGS ARE POLITICAL IN THE LEGISLATURE, DEAN, ESPECIALLY IN AN ELECTION YEAR, AND ESPECIALLY THIS YEAR. WE'VE TALKED ABOUT IT HERE BEFORE, HOW CONTENTIOUS THIS SESSION WAS, AND IT WAS. BUT THIS IS JUST ONE EXAMPLE OF OF WHERE THAT SORT OF GOT IN THE WAY. DAVE IS RIGHT; THEY'RE GOING TO HAVE TO ADDRESS THIS NEXT YEAR. THE PROGRAM DOES WORK. AND I SUPPOSE ONCE THE ELECTION IS PAST AND THEY HAVE A LITTLE MORE MONEY TO SPEND, IT WILL GET FUNDED.

Russell: DAVID SAID THEY WENT BALLISTIC. THEY ALSO WENT TO COURT AND THAT IS STILL PENDING, THAT THEY SUED THE GOVERNOR OVER HIS SELECTIVE VETOES IN THAT IOWA VALUES FUND.

Yepsen: I THINK, DEAN, THE MOST IMPORTANT THING THAT THIS SESSION DID WAS THE GAMBLING BILL. A HUGE ISSUE, A VERY CONTENTIOUS ISSUE. NOT A LOT OF OPTIMISM AT THE BEGINNING THAT THIS COULD BE RESOLVED, AND THEY DID GET IT RESOLVE. THEY TOOK THIS ISSUE AND THEY TOOK IT OFF THE SHELF IN PUBLIC POLICY QUESTIONS IN THIS STATE NOW SO THEY COULD MOVE ON TO OTHER THINGS. THE MOST IMPORTANT THING ABOUT THAT GAMBLING BILL, I THOUGHT, ONE OF THE THINGS, WAS THE WAY IT WAS DONE. STATE REPRESENTATIVE SCOTT RAECKER, AN URBANDALE REPUBLICAN WHO IS AN ANTI-GAMBLER, A VERY BRIGHT GUY, WAS TAPPED BY LEADERSHIP TO START PUTTING A BILL TOGETHER. AND HE DID IT THE OLD-FASHIONED WAY, WITH OPEN MEETINGS AND EVERYBODY IN THE ROOM, NO BACKROOM DEALS, TAKE LOTS OF TIME. AND GRADUALLY A CONSENSUS PIECE OF LEGISLATION WAS CRAFTED, AND EVERYBODY UNDERSTOOD ALL THE TRADEOFFS INVOLVED IN A VERY COMPLICATED PIECE OF LEGISLATION. AND I THINK, DEAN, THAT'S A ROLE MODEL. I'VE HEARD LEGISLATIVE LEADERS SAY THE WAY HE DID THAT, THE WAY THAT GAMBLING BILL WAS PUT TOGETHER, WITH LOTS OF PEOPLE IN THE ROOM REACHING CONSENSUS, IS GOING TO BE A ROLE MODEL FOR EDUCATION ISSUES, ENVIRONMENT, TAX POLICY, AND ECONOMIC DEVELOPMENT IN THE FUTURE. SO I THINK THAT MAKES IT THE MOST IMPORTANT THING.

Russell: DO YOU THINK THEY COULD ACTUALLY DO THAT ON TAX REFORM? DO YOU THINK THEY COULD ACTUALLY GO THROUGH THAT SAME PROCESS AND IN THE END ACTUALLY COME UP WITH REAL TAX REFORM?

Yepsen: SURE. YOU CAN TALK AND ARGUE. YOU HAVE ECONOMISTS WHO ARE LIBERAL ECONOMISTS AND CONSERVATIVE ECONOMISTS; "LET'S AGREE ON DATA." YOU KNOW, JOYCE, I THINK IOWANS ARE PRETTY REASONABLE PEOPLE. AND I THINK IF YOU GET THEM INTO A ROOM AND TALK AND TALK AND TALK AND TALK AND DO SOME STUDIES, YOU CAN REACH A CONSENSUS ON THIS STUFF, ON WHAT'S THE RIGHT THING TO DO. IF YOU GET THEM TO AGREE ON A SET OF FACTS, THEY'LL AGREE ON A SOLUTION. BOB RAY ALWAYS SAID THERE'S NO PROBLEM SO GREAT HERE THAT WE CAN'T SOLVE IT. SO, YES, I DO THINK THAT THEY COULD BE A MODEL.

Borg: DAVE PITT, DAVE SAID THE GAMBLING WAS RESOLVED BUT, YES, IT MAY HAVE BEEN IN TAX, ON HOW THE CASINOS AND THE RACETRACKS ARE GOING TO BE TAXED. BUT UNRESOLVED IS WHETHER IT'S GOING TO BE EXPANDED. AM I RIGHT ON THAT?

Pitt: AND THAT'S PROBABLY -- AGAIN, ONE OF THE SIGNIFICANT THINGS OF THE BILL IS THAT IT DOES TOSS IT BACK TO THE RACING AND GAMING COMMISSION TO DECIDE WHETHER OR NOT THERE WILL BE NEW LICENSES ISSUED. IT DOESN'T PUT A RESTRICTION ON HOW MANY LICENSES. THERE ARE SIX COUNTIES IN IOWA NOW THAT HAVE VOTED TO -- AT LEAST VOTED TO BRING A RIVERBOAT INTO THEIR COMMUNITY IF, YOU KNOW, THE RACING AND GAMING DOES LIFT THE MORATORIUM. SO I THINK THAT'S ONE OF THE SIGNIFICANT THINGS IS THAT IT DOES ALLOW EXPANSION. IT ALSO ALLOWS MORE TABLE GAMES IN PLACES LIKE PRAIRIE MEADOWS, SO THERE WILL BE SOME SORT OF EXPANSION OF GAMBLING IF THE COMMISSION DECIDES TO LIFT THE MORATORIUM.

Borg: AND WHY DO YOU THINK THEY KICKED THAT BACK TO THE STATE RACING AND GAMING COMMISSION, BECAUSE I SORT OF READ THE COMMISSION AS SAYING WE WANT THAT TO BE A LEGISLATIVE DECISION OR TO LIFT THE MORATORIUM. WELL, MAYBE THEY GOT THAT ANSWER. AND IS IT THE LEGISLATURE SAYING THIS IS YOUR BUSINESS ON HOW YOU'RE GOING TO ISSUE NEW LICENSES?

Pitt: I THINK THAT'S RIGHT. I KNOW THAT THE GOVERNOR HAD EXPRESSED HIS INTEREST IN THE LEGISLATURE, THE PEOPLE ELECTED BY THE VOTERS, TO TAKE A HARD STAND ON SOME OF THOSE ISSUES, MAKE DIFFICULT CHOICES. SO I DON'T THINK HE WAS NECESSARILY IN FAVOR OF IT GOING BACK TO A FIVE-MEMBER BOARD THAT'S NOT ELECTED BY THE PEOPLE.

Russell: THE MOST OUTSPOKEN OPPONENT OF LIFTING THE MORATORIUM ON THAT BOARD IS THE CHAIRMAN, MIKE MAHAFFEY. AND HE VERY WELL MAY HAVE BEEN HOPING THAT THE LEGISLATURE WOULD ANSWER THIS IN THE WAY THAT HE WANTED THEM TO ANSWER IT. YOU KNOW, IF THE LEGISLATURE HAD APPROVED CONTINUING THE MORATORIUM, THEN HE CERTAINLY WOULD HAVE BEEN OFF THE HOOK AND NOT HAD TO DEAL WITH THAT.

Yepsen: BUT, DEAN, THE LEGISLATURE DELEGATES ALL SORTS OF DECISIONS TO STATE BOARDS AND COMMISSIONS. WE CREATED A D.O.T., A DEPARTMENT OF TRANSPORTATION, IN THIS STATE TO DECIDE WHERE THE ROADS WERE GOING TO GO. AND WHY DID THEY DO THAT? BECAUSE THE POLITICIANS GOT TIRED OF GETTING ALL CAUGHT UP IN HIGHWAY LOCATION DECISIONS YEARS AGO. SO THIS IS THE SAME THING. YOU HAVE AN INDEPENDENT BOARD THAT CAN STUDY THE ECONOMICS AND WHAT WORKS AND WHAT DOESN'T AND MAKE A MUCH MORE RATIONAL DECISION ABOUT THIS INDUSTRY THAN A BUNCH OF POLITICIANS. AND IF IT WEREN'T FOR THE FACT THAT IT'S GAMBLING, THIS WOULDN'T BE THIS CONTROVERSIAL. THE LEGISLATURE DOESN'T GO IN AND MICROMANAGE THE INSURANCE INDUSTRY. WE HAVE COMMISSIONERS. WE HAVE A BUREAUCRAT WHO DOES THOSE THINGS, AND THIS IS WHAT'S HAPPENING WITH GAMBLING NOW.

Borg: GOOD POINT. JOYCE, AS IT RELATES, THEN, TO THE STATE BUDGET, GAMBLING WAS A MAJOR COMPONENT AS TO HOW THAT TAX REVENUE WAS GOING TO FLOW INTO THE STATE BUDGET. AND EDUCATION WAS ANOTHER BIG COMPONENT IN THE STATE BUDGET, BUT I WAS PRETTY DEFINITE WHEN I SAID IN INTRODUCING THIS PROGRAM THAT SOME STATE WORKERS, AS A RESULT OF THAT STATE BUDGET, ARE GOING TO LOSE THEIR JOBS. WAS I TOO DEFINITE?

Russell: NO, ABSOLUTELY NOT. THE GOVERNOR SAID -- AND THAT HAD BEEN TALKED ABOUT ALL ALONG, THAT BASICALLY THIS IS A STATUS QUO BUDGET. THERE'S NO GROWTH IN THAT BUDGET FOR STATE AGENCIES, SO THEY HAVE TO DEAL WITH INFLATION. AND ANY RAISES THAT THEY GIVE TO THEIR WORKERS, THAT HAS TO COME OUT OF THAT STATUS QUO BUDGET. SO IT'S INEVITABLE THAT THEY'RE GOING TO HAVE TO REDUCE THAT WORK FORCE JUST TO -- JUST TO MAINTAIN THE STATUS QUO. THE GOVERNOR SAID -- AS THE LEGISLATURE WAS TRYING TO WRAP UP ITS SESSION, THE GOVERNOR WAS SAYING THERE WILL BE LAYOFFS AND THEY WILL BE SUBSTANTIAL. IT WILL BE A WHILE, 30 TO 45 DAYS, HE SAID, BEFORE IT'S CLEAR HOW MANY.

Yepsen: ONE OF THE UNFORTUNATE THINGS -- I THINK IT'S UNFORTUNATE -- BUT ONE OF THE TENETS OF THE AMERICAN LABOR MOVEMENT IS SENIORITY, AND THAT'S VERY IMPORTANT. AND SO THE STATE -- THE UNIONS HAVE NEGOTIATED A CONTRACT WITH THE STATE THAT SAYS YOU DON'T DO FURLOUGHS. YOU START LAYING PEOPLE OFF. YOU WORK YOUR WAY DOWN THROUGH THE SENIORITY LIST. AND WHAT THAT'S GOING TO MEAN IS WE'RE GOING TO LOSE SOME OF THE YOUNGER WORKERS IN STATE GOVERNMENT, SOME OF THE NEWER EMPLOYEES IN VARIOUS AGENCIES. I WISH THERE WAS SOME WAY THAT THE EXECUTIVE BRANCH AND THE LABOR UNIONS COULD WORK OUT A BETTER AGREEMENT FOR FURLOUGHS AND MAKING TEMPORARY ADJUSTMENTS LIKE THIS, BECAUSE I THINK IN THE LONG RUN IT'S MORE HUMANE TO THE WORKERS AND I THINK IT'S GOING TO BE BETTER FOR THE TAXPAYER. BUT THIS IS THE WAY THE CONTRACT READS. A LOT OF REPUBLICANS DID NOT LIKE THAT ELEMENT, SO THERE WILL BE PEOPLE WHO ARE GOING TO LOSE THEIR JOBS.

Borg: I DETECTED, DAVE PITT, THAT AS REPUBLICANS CRAFTED AND PASSED THIS BUDGET AND SENT IT ON TO THE GOVERNOR THAT THEY ALSO WERE SAYING, "WE'RE NOT QUITE SURE THIS IS GOING TO WORK. WE'VE USED A LOT OF ONE-TIME MONEY HERE. WE'RE BETTING ON AN ECONOMIC RECOVERY TO GET US OFF THE HOOK." ELABORATE ON THAT FOR ME.

Pitt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

Yepsen: NOBODY WANTED TO RAISE TAXES, DEAN, AND NOBODY WANTED TO CUT ANY MORE SPENDING BECAUSE IT'S AN ELECTION YEAR, SO THEY WENT INTO THE CASH RESERVES AND TOOK THE LAST OF THAT MONEY OUT OF THERE. THEY REMIND YOU OF AN ALCOHOLIC WHO SAYS, "I'LL QUIT DRINKING AFTER I HAVE THIS DRINK."

Borg: KAY, MIGHT THERE ALSO BE SOME POLITICAL IMPLICATIONS COMING OUT OF THAT AND, "WELL, GOVERNOR, WE'RE GOING TO GIVE YOU, IN EDUCATION, WHAT YOU'RE ASKING FOR, BUT WE MAY -- YOU MAY LOOK BAD."

Henderson: WELL, IT MAY LEAD TO ACROSS-THE-BOARD CUTS. I MEAN WHAT IF THERE IS ANOTHER TERROR ATTACK IN THIS COUNTRY AND THE ECONOMY TANKS SIMILAR TO THE WAY IT TANKED AFTER 9/11? THEY ARE GAMBLING THAT THE ECONOMY IN IOWA IS GOING TO KEEP PERCOLATING UP. IT MAY PERCOLATE DOWN. THERE MAY BE THINGS BEYOND THE CONTROL OF ANYBODY IN IOWA THAT AFFECT THIS ECONOMY. AND SO WHEN THEY RETURN IN JANUARY, AFTER HAVING STOOD FOR ELECTION, AFTER HAVING MADE NO TOUGH CHOICES, NO CUTS OR NO TAX INCREASES, THEY MAY BE FORCED WITH SUBSTANTIALLY TOUGH CHOICES IN JANUARY OF NEXT YEAR.

Yepsen: IT WAS ALSO INTERESTING, DEAN, THAT AS THE COMPROMISE WAS BEING WORKED OUT ON SCHOOL AID, THE GOVERNOR WAS ADAMANT THAT HE GET 4 PERCENT. REPUBLICANS OFFERED HIM 3 PERCENT PLUS ANOTHER ONE IF IT'S THERE. AND HE -- THE GOVERNOR WAS VERY ADAMANT, AND SO THE REPUBLICANS SAID, WELL, FINE, IF YOU WANT 4 PERCENT, WE'LL GIVE IT TO YOU BECAUSE YOU'RE GOING TO BE THE GUY WHO'S GOING TO HAVE TO DO ANOTHER ACROSS-THE-BOARD CUT IF IT ISN'T THERE.

Pitt: AND THAT'S ANOTHER THING THAT LED TO A VERY CONTENTIOUS END. I REMEMBER PEOPLE TALKING ABOUT -- I THINK IT WAS STEW IVERSON, THE MAJORITY LEADER IN THE SENATE, BASICALLY SAID THE HOUSE, YOU KNOW, REACHED A BAD DEAL WITH THE GOVERNOR ON THIS WHOLE THING. AND, YOU KNOW, THAT CAUSED A LOT OF CONTENTIOUSNESS AND SOME ARGUING ABOUT WHETHER THEY SHOULD HAVE CUT THAT DEAL, AND I THINK THAT'S --

Yepsen: A SCHOOL SUPERINTENDENT PLANNING AN '06 BUDGET CAN COUNT ON -- COULD THINK ABOUT FOUR BUT BETTER PLAN FOR THREE REALLY BEING THERE.

Borg: JOYCE, ALL OF THIS IS NOT A DONE DEAL. SOME OF IT IS. EARLY LEGISLATION THE GOVERNOR HAS ALREADY ACTED ON, BUT THERE IS LEGISLATION COMING DOWN NOW IN THE FINAL DAYS THAT THE GOVERNOR MAY NOT LIKE.

Russell: WELL, HE HAS THE ITEM VETO POWER, OF COURSE, ON THE BUDGET BILL, AND THAT BECAME A HUGE CHRISTMAS TREE IN THE LAST HOURS OF THE SESSION. LOTS OF POLICY CHANGES IN THERE THAT NORMALLY HAVE TO GO THROUGH THE LEGISLATIVE PROCESS. THEY GOT TACKED ON AND APPROVED AT THE LAST MINUTE, AND HE WILL ALMOST CERTAINLY USE HIS LINE-ITEM VETO ON SOMETHING IN THAT BILL JUST BECAUSE IT'S SO BIG. BUT THERE ARE OTHERS ALSO THAT HE'S MADE CLEAR ALL ALONG THAT HE HAD CONTENTION WITH: THE MEDICAL MALPRACTICE BILL TO SET A CAP ON DAMAGES IN MEDICAL MALPRACTICE CASES; THAT HE HAS IMPLIED REPEATEDLY THAT HE'S GOING TO LOOK CAREFULLY AT ANY TAX CREDITS... WELL, ONE OF THOSE IS A PRIVATE SCHOOL TAX CREDIT, A CREDIT FOR A TAX CREDIT WHERE IF YOU CONTRIBUTE TO A SCHOLARSHIP FUND FOR PRIVATE SCHOOLS; THEN ON MORE OF THE SOCIAL ISSUE AREA, THE LACI PETERSON BILL, THE GOVERNOR HAS SOME CONCERNS ABOUT --

Borg: MAKING A FETUS A PERSON?

Russell: THAT'S RIGHT. MAKING IN EFFECT -- DECLARING THE FETUS TO BE A PERSON AND MAKING IT POSSIBLE TO FILE A SEPARATE MURDER CHARGE IN THE CASE OF A PREGNANT WOMAN WHO IS MURDERED.

Yepsen: MANY OF THESE BILLS, DEAN, ARE BAIT FOR YOUR POLITICAL BASE. I MEAN THE REPUBLICANS PASSED THESE THINGS KNOWING FULL WELL THAT THE DEMOCRATIC GOVERNOR WAS GOING TO VETO THEM. I MEANT THE REPUBLICANS LIKE MAKING THE BUSINESS COMMUNITY HAPPY WITH SOME LIMITS ON MALPRACTICE OR LAWSUITS, AND THE GOVERNOR, WHO IS A TRIAL LAWYER, GETS A LOT OF MONEY FROM TRIAL LAWYERS, HE MAKES HIS CONSTITUENCY HAPPY BY VETOING THEM. SO EVERYBODY WINDS UP A POLITICAL WINNER.

Borg: KAY, I SAID EARLIER THAT THIS -- EVERYONE WENT HOME TO CAMPAIGN. DOES THAT PRETTY MUCH ELIMINATE THE CHANCE OF A SPECIAL SESSION?

Henderson: I DON'T THINK THE GOVERNOR WANTS A SPECIAL SESSION. HE WANTS TO GO HIT THE CAMPAIGN TRAIL. ONE SENSE YOU GOT WAS THAT THERE WASN'T A LOT OF ENERGY AT THE STATEHOUSE THIS YEAR. THEY WERE ITCHING TO BE OUT ON THE CAMPAIGN TRAIL. THEY'RE TIRED OF HANGING AROUND ONE ANOTHER, AND THEY WANT TO GO OUT AND MAKE THEIR CASE TO VOTERS. DEMOCRATS ARE GOING TO GO OUT AND MAKE THE CASE THAT THE REPUBLICANS FAILED ON THE EDUCATION ISSUE, THAT THEY HAVE DOWNGRADED THE PRIORITY IN THE PAST FEW YEARS, AND THEY'RE GOING TO TRY TO MAKE THAT ARGUMENT; WHEREAS, REPUBLICANS ARE GOING TO GO OUT AND SAY, "WE SPENT MORE MONEY ON EDUCATION IN THE PAST YEAR AND WE RESISTED THE GOVERNOR'S CALL FOR RAISING TAXES." SO THEY EACH HAVE A SEPARATE MESSAGE TO MAKE TO VOTERS, AND THEY'RE READY TO GO OUT AND CAMPAIGN. THEY DON'T WANT A SPECIAL SESSION.

Russell: THE MAJORITY LEADER IN THE SENATE TOLD THE GOVERNOR, YOU CAN CALL US BACK 50 TIMES, BUT YOU WILL NOT GET ONE RED CENT. AND THE GOVERNOR TOOK THEM AT THEIR WORD.

Borg: WELL, DAVE, WHAT ISSUES WERE UNRESOLVED, THOUGH, THAT -- WE'RE NOT GOING TO HAVE A SPECIAL SESSION, APPARENTLY. BUT WHAT ISSUES DID YOU SEE THAT WERE UNRESOLVED AND KICKED DOWN THE ROAD?

Pitt: WELL, I THINK AS WE TALKED BEFORE, THE IOWA VALUES FUND AND DECIDING FIRST THING WHETHER OR NOT TO FILL THAT. I IMAGINE THEY'LL COME BACK NEXT YEAR AND TALK MORE ABOUT EDUCATION FUNDING BECAUSE, AGAIN, THE LEGISLATURE CAME UP TO THE 4-PERCENT LEVEL BUT THEY DIDN'T PUT ANY MONEY IN FOR CLASSROOM SIZE INITIATIVES, TEACHER PAY INITIATIVES, THINGS THAT THE GOVERNOR HAS FELT VERY STRONGLY ABOUT IN THE PAST. AND UNDOUBTEDLY, THEY'LL REVISIT THAT.

Yepsen: AS WE MENTIONED EARLIER, THERE'S A LAWSUIT PENDING. THE LEGISLATURE IS SUING THE GOVERNOR OVER SOME TAX CUTS THAT HE VETOED. NO MATTER WHAT THE OUTCOME OF THAT LAWSUIT IS, I THINK THEY'RE GOING TO HAVE TO HAVE A DISCUSSION ABOUT TAX POLICY. IF THE GOVERNOR WINS THAT SUIT, WE'VE STILL GOT TO COME UP WITH MORE MONEY IN THIS STATE TO RUN GOVERNMENT. I THINK A LOT OF PEOPLE ARE WINKING AND KNOWING THAT THAT CIGARETTE TAX IS GOING TO GET RAISED. IF HE LOSES, THERE'S GOING TO BE A HUGE TAX DEDATE BECAUSE THAT WILL RIGHT THERE CREATE, I THINK, ABOUT A $300-MILLION HOLE IN STATE REVENUES THAT ARE GOING TO HAVE TO GET COVERED. SO I THINK TAX POLICY WILL BE A BIG DEBATE IN THE NEXT SESSION.

Borg: JOYCE, THIS DOESN'T FALL UNDER UNRESOLVED LEGISLATIVE POSSIBLE LAW, BUT THERE WAS A CONFIRMATION INVOLVING JONATHAN WILSON WHICH WAS REJECTED, SO THAT LEAVES A VACANCY ON THE STATE BOARD OF EDUCATION.

Russell: THAT'S RIGHT. THE GOVERNOR WILL HAVE TO PUT UP ANOTHER NAME AND PROBABLY APPOINT SOMEONE INTERIM AND THEN WAIT FOR THAT PERSON TO BE CONFIRMED. JONATHAN WILSON, OF COURSE, THE PROMINENT GAY REPRESENTATIVE FROM -- ATTORNEY FROM DES MOINES. A BITTER DEBATE IN THE IOWA SENATE AND ULTIMATELY VOTING HIM DOWN.

Borg: IS THERE A POSSIBILITY THAT -- THAT BOARD CAN OPERATE, I GUESS, THE WAY IT IS, AND IT WILL JUST COME AROUND WITH ANOTHER NOMINATION FROM THE GOVERNOR NEXT SESSION.

Russell: WELL, OR HE COULD MAY A INTERIM APPOINTMENT OR A TEMPORARY APPOINTMENT, AND THEN THE LEGISLATURE WOULD BE ASKED TO CONFIRM IT WHEN THEY CAME BACK.

Henderson: BUT THE MORE IMPORTANT THING ABOUT THIS JONATHAN WILSON DEBATE THAT OCCURRED IN THE IOWA SENATE WAS THAT YOU HAD A DEBATE EARLIER IN THE YEAR IN WHICH THE IOWA HOUSE PASSED A RESOLUTION. THEY WANTED A CONSTITUTIONAL AMENDMENT ON IOWA'S CONSTITUTION BANNING GAY MARRIAGE. THE SENATE COULDN'T PASS IT. AND THEN THE SENATE A FEW WEEKS LATER DEBATES THIS JONATHAN WILSON QUESTION AND THEN SAYS, "WE DON'T WANT A GAY MAN SERVING ON THE BOARD OF EDUCATION." SO THAT IS AN ISSUE THAT A CORE CONSTITUENCY WITHIN THE REPUBLICAN PARTY FEELS STRONGLY ABOUT. AND SO AFTER REBUFFING THEM EARLIER IN THE YEAR, REPUBLICANS CAME BACK IN THE END AND GAVE THAT CONSTITUENCY WITHIN THE REPUBLICAN PARTY WHAT THEY WANTED.

Borg: IS THERE ANY -- DAVE PITT, IS THERE ANY PROSPECT OF TAX INCREASES BEING MORE PALATABLE IN THE COMING GENERAL ASSEMBLY? THE GOVERNOR THIS TIME IN HIS CONDITION OF THE STATE PROPOSED SOME. THEY DIDN'T GET ANYWHERE.

Pitt: WELL, I THINK THERE WAS A LOT OF TALK ABOUT PEOPLE BELIEVING HONESTLY -- AND I THINK EVEN A FEW REPUBLICANS HAD SAID THERE MIGHT BE A POSSIBILITY OF A CIGARETTE TAX INCREASE NEXT YEAR. BILL DIX, WHO IS IN THE HOUSE, WRITES THE BUDGET ON THE HOUSE SIDE, STOOD I THINK ON THE LAST DAY OF THE SESSION, ADAMANTLY SAID HE IS GOING TO CAMPAIGN VERY HARD FOR THE REPUBLICANS TO MAINTAIN THEIR MAJORITY, AND HE'S ALSO GOING TO WORK VERY HARD TO MAKE SURE THERE ARE NO TAX INCREASES NEXT YEAR. SO THE LANGUAGE WAS THERE. THE RHETORIC WAS THERE. I GUESS IT IS YET TO BE SEEN NEXT YEAR WHETHER THERE WILL BE ENOUGH SUPPORT TO RAISE AT LEAST THE CIGARETTE TAX OR SOMETHING LIKE THAT.

Henderson: I THINK IT IS QUITE REMARKABLE THAT IOWA LEGISLATORS IN THIS ERA IN WHICH OTHER STATES HAVE TURNED TO SIN TAXES, YOU HAVE STATES SUCH AS NEVADA THINKING ABOUT TAXING FOLKS WHO GO INTO STRIP CLUBS A $5 FEE WHEN YOU WALK IN THE DOOR. IT IS REMARKABLE IN THIS ERA OF AN ECONOMIC DOWNTURN THAT IOWA LEGISLATORS HAVE NOT RESORTED TO RAISING THE CIGARETTE TAX.

Yepsen: YOU KNOW, WE BEAT UP THE POLITICIANS A LOT OUT HERE, DEAN, BUT I DO THINK YOU HAVE TO ACKNOWLEDGE THAT IN THE LAST FEW YEARS, THE WAY IOWA HAS RUN ITS FINANCES HAS BEEN A LOT BETTER THAN A LOT OF OTHER STATES. OUR BOND RATING IN THIS STATE IS STILL PRETTY HIGH. THEY BUILT SOME BIG CASH RESERVES A FEW YEARS BACK, LIKE 12 PERCENT FINALLY, AND PEOPLE ARE SAYING THAT'S TOO MUCH. AND NOW WE FOUND OUT IT WAS NECESSARY TO HAVE THOSE CASH RESERVES, AND WE DREW THEM DOWN. WE HAVE NOT RAISED TAXES. THE WALL STREET JOURNAL WAS VERY COMPLIMENTARY TO THIS STATE IN AN ARTICLE ABOUT THE FACT THAT THIS STATE HAS NOT DONE THAT. OUR TAX BURDEN IS RIGHT AT THE NATIONAL AVERAGE. SO SOMETIMES THE POLITICIANS OVER TIME, YOU KNOW, THEY DO SOME THINGS RIGHT.

Borg: MIGHT YOU SAY THAT ANOTHER UNRESOLVED ISSUE IS AIR QUALITY STANDARDS? THE LEGISLATURE ACTED ON THAT. THE GOVERNOR VETOED IT. SO WHERE ARE WE, JOYCE?

Russell: WELL, THE VILSACK ADMINISTRATION AND THE DEPARTMENT OF NATURAL RESOURCES WILL PROCEED WITH WRITING RULES FOR AIR QUALITY, BUT THOSE RULES HAVE GOTTEN INTO TROUBLE IN THE PAST. THE LEGISLATURE FOUND THEMSELVES WHERE THEY WERE THIS YEAR, BECAUSE THE LAST TIME THE RULES WERE APPROVED, THE LEGISLATURE CAME IN AND NULLIFIED THE RULES. SO THEY'LL CONTINUE WITH THE PROCESS, BUT RIGHT NOW IT'S KIND OF A STALEMATE.

Yepsen: WELL, AND IT'S A HUGE ISSUE OUT THERE IN RURAL IOWA. THE ODOR ISSUE IS JUST RIPPING UP COMMUNITIES AND PEOPLE, AND WE'VE JUST GOT TO FIGURE OUT A WAY TO MANAGE, IN THIS STATE, HAVING BOTH THE HOG INDUSTRY AND THE SMELL.

Borg: IS IT AN ELECTION ISSUE?

Yepsen: OH, I THINK SO. IT HAS BEEN FOR THE LAST FEW. ONE OF THE THINGS THAT MAKES IT AN ISSUE, DEAN, IS THAT THERE ARE NOW MORE NONFARMERS LIVING IN RURAL IOWA THAN FARMERS IN THE COUNTRYSIDE. AND SO YOU'VE GOT -- IN THE OLD DAYS FARMERS KIND OF TOLERATED SOME OF THESE SMELLS. SOME OF THE NEWCOMERS MOVING INTO RURAL PARTS OF THE STATE DON'T, AND IT STARTS GETTING PRETTY LITIGIOUS.

Borg: KAY --

Pitt: AND PART OF THE ISSUE --

Borg: GO AHEAD, DAVE.

Pitt: I WAS GOING TO SAY PART OF THE ISSUE WITH THAT IS IT'S SOMEWHAT DIFFICULT AND SOMEWHAT EXPENSIVE TO MEASURE -- I MEAN HOW DO YOU QUANTIFY SOMEHOW WHERE THE LIMITS SHOULD BE AND HOW DO YOU MEASURE THAT. AND THAT WAS ADDRESSED IN THIS BILL THAT WAS VETOED, BUT IT WAS ADDRESSED IN A WAY THAT A LOT OF OPPONENTS SAID WOULD NEVER REALLY RESULT IN ANY ENFORCEMENTS OR ANYTHING LIKE THAT. SO I MEAN IT'S DIFFICULT TO RESOLVE THE ISSUE BECAUSE, YOU KNOW, HOW DO YOU MEASURE SMELL, HOW DO YOU MEASURE ODOR, AND HOW DO YOU SET A LEVEL AT WHICH YOU THINK IT'S DANGEROUS TO SOMEONE'S HEALTH.

Borg: KAY, BECAUSE OF DEMOGRAPHICS, WE THOUGHT THIS WAS GOING TO BE A DIFFERENT COMPOSITION, AND IT WAS A DIFFERENT COMPOSITION IN THE GENERAL ASSEMBLY. WERE THEIR ACTIONS DIFFERENT?

Henderson: WELL, WHEN WE SAY GENERALLY ASSEMBLY, WE'RE TALKING ABOUT TWO YEARS.

Borg: TWO YEARS.

Henderson: WHEN THEY CAME IN TWO YEARS AGO, THERE WAS A LOT OF ENERGY. THEY TACKLED THE PROPERTY TAX ISSUE, AND THEY THOUGHT THEY HAD COME UP WITH THIS UNIQUE, NEW APPROACH. THERE WAS A LOT OF ENERGY LAST YEAR. THIS AREA YEAR, COMPARATIVELY, A LOT LESS ENERGY. PEOPLE ARE WORN DOWN BY THE CIRCUMSTANCES OF A STATE BUDGET THAT WAS IN ARREARS IF THEY DIDN'T DO SOME MAJOR CUTTING AND A GAMBLING PROBLEM THAT WAS JUST REALLY VEXING FOR THEM. AND SO A LOT OF THAT ENERGY WAS CURTAILED THIS YEAR.

Borg: DAVE, JUST A QUICK CLOSING COMMENT. IN THIS NEW GENERAL ASSEMBLY, ANY EMERGING LEADERS?

Yepsen: I THINK TWO. I MENTIONED SCOTT RACKER, AN URBANDALE REPUBLICAN. ANOTHER ONE IS STATE SENATOR JEFF LAMBERTI. HE WAS A KEY PLAYER IN BROKERING THE GAMBLING DEAL, NEW PRESIDENT OF THE SENATE, THINKING ABOUT A RUN FOR GOVERNOR, HAD THE COURAGE TO VOTE FOR JONATHAN WILSON'S CONFIRMATION IN THE FACE OF A LOT OF REPUBLICAN OPPOSITION. THAT TOOK GUTS. YEAH, TWO EMERGING LEADERS THERE.

Borg: THANK YOU FOR YOUR INSIGHTS. ON OUR NEXT EDITION OF "IOWA PRESS," WE CONTINUE OUR LEGISLATIVE POSTSCRIPT. SENATE REPUBLICAN MAJORITY LEADER STEW IVERSON OF DOWS AND HIS COUNTERPART DEMOCRATIC MINORITY LEADER MIKE GRONSTAL OF COUNCIL BLUFFS WILL BE WITH US TO DISCUSS THE LEGISLATIVE SESSION. THAT'S NEXT WEEKEND: 7:30 FRIDAY; SUNDAY AT NOON. AND A PROGRAM REMINDER TOO. A WEEK AGO THURSDAY, YOU'LL RECALL IOWA PUBLIC TELEVISION BROUGHT YOU THE SEMINAR SPONSORED BY THE FEDERAL HOME LOAN BANK TITLED "CAPITALIZING ON RURAL AMERICA." HARVARD LAW PROFESSOR ARTHUR MILLER MODERATES THAT SOCRATIC DIALOGUE WITH A BLUE RIBBON PANEL. IF YOU MISSED IT OR WANT TO SEE IT AGAIN, IOWA PUBLIC TELEVISION WILL REBROADCAST THAT TWO-HOUR SYMPOSIUM AT 4:00 ON SUNDAY AFTERNOON. YOU'LL FIND IT BOTH INFORMATIVE AND ENTERTAINING. AND THAT'S IT FOR THIS WEEKEND'S EDITION OF "IOWA PRESS." 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.