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| Senate President Republican Jeff Lamberti IOWA PRESS #3143>> Yepsen: AT THE IOWA STATEHOUSE, POLICYMAKERS ARE REACTING TO THIS WEEK'S SUPREME COURT RULING, WHICH SHUT DOWN ECONOMIC DEVELOPMENT APPROPRIATIONS FOR THE VALUES FUND. WE GET INSIGHTS FROM THE SENATE PRESIDENT, REPUBLICAN JEFF LAMBERTI OF ANKENY, AND FROM SENATOR JACK HATCH, A DES MOINES DEMOCRAT, 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. ON STATEWIDE IOWA PUBLIC TELEVISION, THIS IS THE FRIDAY, JUNE 18 EDITION OF "IOWA PRESS." HERE IS DAVID YEPSEN. Yepsen: FOR THE TIME BEING AT LEAST, THE BIG THRUST IN IOWA'S ECONOMIC DEVELOPMENT EFFORT IS ON HOLD. THIS WEEK'S IOWA SUPREME COURT RULING VOIDED THE VALUES FUND, WHICH PAYS FOR A $503-MILLION EFFORT FOLLOWING A LEGAL CONFRONTATION BETWEEN DEMOCRATIC GOVERNOR TOM VILSACK AND THE REPUBLICAN-CONTROLLED LEGISLATURE. BACK IN 2003 GOVERNOR VILSACK USED HIS LINE-ITEM VETO POWERS TO STRIKE DOWN A $300-MILLION TAX CUT AND LIMIT BUSINESS LIABILITY IN LAWSUITS. THE IOWA SUPREME COURT SAID WEDNESDAY THE GOVERNOR WAS WRONG, BUT THE COURT ALSO SAID THAT THE ENTIRE MEASURE DOESN'T MEET CONSTITUTIONAL MUSTER, IN EFFECT THROWING THE BABY OUT WITH THE BATH WATER. SO IT'S BACK TO SQUARE ONE OVER GRANTS TO BUSINESS, TAX CUTS, AND REGULATORY REFORM AT THE IOWA STATEHOUSE. HERE TO DISCUSS WHAT'S NEXT ARE SENATOR JEFF LAMBERTI, A REPUBLICAN FROM ANKENY WHO SITS AS PRESIDENT OF THE IOWA SENATE, AND SENATOR JACK HATCH, A DEMOCRAT FROM DES MOINES WHO SERVES AS RANKING MEMBER OF THE SENATE'S ECONOMIC GROWTH COMMITTEE. GENTLEMEN, WELCOME BACK TO "IOWA PRESS." GOOD TO HAVE YOU WITH US AGAIN. THANK YOU. Yepsen: ALSO WITH US AT THE "IOWA PRESS" TABLE ARE KAY HENDERSON, NEWS DIRECTOR WITH "RADIO IOWA," AND MIKE GLOVER, SENIOR POLITICAL AND LEGISLATIVE REPORTER WITH THE "ASSOCIATED PRESS." Glover: GENTLEMEN, YOU'VE BOTH BEEN AROUND THE LEGISLATURE FOR A FAIR AMOUNT OF TIME, AND I'D LIKE TO GET YOUR PREDICTIONS ON WHAT'S GOING TO HAPPEN WITH THE MESS THAT THE SUPREME COURT HAS HANDED YOU. SENATOR LAMBERTI, STARTING WITH YOU: NOT WHAT WOULD YOU LIKE TO SEE COME OUT OF ALL THIS BUT WHAT DO YOU THINK WILL HAPPEN FROM ALL THIS? Lamberti: WELL, IT LOOKS LIKELY THAT WE ARE GOING TO HAVE A SPECIAL SESSION. I DON'T -- AT THIS POINT, I DON'T SEE ANY WAY TO AVOID THAT. I MEAN WE'VE MADE COMMITMENTS AND CONTRACTS WITH BUSINESSES THROUGHOUT THE STATE FROM THE VALUES FUND. THE VALUES FUND AS WE SIT TODAY DOES NOT EXIST, HOWEVER, WE'VE GOT THESE CONTRACTS. I THINK WE WANT TO HONOR THOSE CONTRACTS, AND I DON'T SEE ANY WAY TO DO THAT WITHOUT US GOING BACK INTO SPECIAL SESSION. THAT'S NUMBER ONE. NUMBER TWO, I THINK WE WILL GO BACK AND HAVE DISCUSSIONS ABOUT A COMPREHENSIVE PACKAGE OF REFORMS, IMPROVEMENTS, TO GROW OUR ECONOMY. AND THAT'S REALLY WHAT WE'RE DISCUSSING NOW WITH THE GOVERNOR. Glover: SENATOR HATCH, WHAT'S YOUR PREDICTION ABOUT HOW ALL THIS WILL PLAY OUT AT THE STATEHOUSE? Hatch: WELL, IT'S HOPEFUL THAT WE COULD COME TO A BIPARTISAN AGENDA IF WE GO BACK INTO A SPECIAL SESSION, BUT IF THE REPUBLICANS COME BACK WITH PRETTY MUCH WHAT THEY HANDED THE GOVERNOR BEFORE, IT IS GOING TO BE UGLY, IT'S GOING TO BE MESSY, AND THE GOVERNOR HAS SAID HE WON'T SIGN IT. SO WHETHER OR NOT WE HAVE INCOME TAX REFORM, I THINK IT'S VERY CLEAR THAT IT HAS TO BE REVENUE NEUTRAL, THE BUDGET IS NOT STRONG ENOUGH TO SUSTAIN A TAX CUT RIGHT NOW, AND THE REGULATORY REFORM, THERE ARE AREAS OF REFORM THAT THE DEMOCRATS SUPPORT BUT IT'S NOT GOING TO BE MINGLED WITH SOME OF THE REFORMS THAT ARE, WE THINK, THAT ACTUALLY HURT THE ECONOMY. Glover: AND DO YOU AGREE WITH SENATOR LAMBERTI THAT A SPECIAL SESSION IS MORE OR LESS INEVITABLE? Hatch: I THINK THAT'S UNCLEAR RIGHT NOW. I THINK THAT WE DO HAVE THE MONEY THAT WAS APPROPRIATED. THERE IS DISCUSSION NOW ON WHETHER OR NOT THERE IS A NEED FOR A SPECIAL SESSION, AND I CAN'T SAY -- I CAN'T PREDICT WITH ANY CERTAINTY THAT WE'LL ACTUALLY GET THERE. IT WILL BE DIFFICULT. IF WE DO HAVE TO HAVE A SPECIAL SESSION, WE SHOULD GO IN THERE AND CORRECT THE IOWA VALUES FUND AND LEAVE THE LONG-TERM DISCUSSION ON ECONOMIC GROWTH -- OTHER ECONOMIC GROWTH STRATEGIES TO THE NEW LEGISLATURE. Henderson: WELL, SENATOR LAMBERTI, IT SEEMS AS IF IN 2003 THERE WAS GRIDLOCK BETWEEN THE REPUBLICAN-LED LEGISLATURE AND THE DEMOCRAT GOVERNOR OVER TAX CUTS AND BUSINESS REFORMS. WHAT HAS CHANGED? WHY WON'T THAT GRIDLOCK STILL EXIST IF THERE IS A SPECIAL SESSION? Lamberti: WELL, IT STILL MAY EXIST BUT I THINK WHEN WE TALK ABOUT BIPARTISANSHIP AND FINDING A SOLUTION, THE DEFINITION OF BIPARTISANSHIP IS NOT THE REPUBLICANS AGREEING TO THE GOVERNOR'S PROPOSAL. AND THAT SEEMS TO BE WHAT WE'RE BEING ASKED TO DO. IN 2003 WHEN WE PASSED IT, WE BELIEVED THAT AN ECONOMIC DEVELOPMENT STRATEGY SIMPLY BASED ON HANDING OUT GRANTS AND LOANS THROUGH THE VALUES FUND WAS A FAILED POLICY, THAT IF YOU'RE GOING TO FUNDAMENTALLY CHANGE THIS ECONOMY, YOU HAVE TO HAVE TAX REFORM AND REGULATORY REFORM TO IMPROVE THE BUSINESS CLIMATE IN IOWA. AND I PUT IT THIS WAY: IF ALL WE DO IS HAND OUT $500 MILLION IN GRANTS AND LOANS OVER THE NEXT FIVE YEARS, WHERE ARE WE AT THE END OF FIVE YEARS? ARE WE THEN GOING TO COME BACK TO THE PEOPLE OF IOWA AND SAY WE NEED A BILLION NOW BECAUSE THIS IS THE ONLY THING WE HAVE IN OUR TOOLBOX TO GROW THE ECONOMY? WHAT WILL WE HAVE DONE FOR THE THOUSANDS OF SMALL BUSINESSES ACROSS THE STATE OF IOWA THAT ARE ACTUALLY THE ENGINE OF THIS ECONOMY? AND SO WE'RE NOT SIMPLY GOING TO GO IN AND FIX THE VALUES FUND WITHOUT HAVING THOSE KIND OF FUNDAMENTAL DISCUSSIONS, BECAUSE THAT IS A FAILED STRATEGY FOR A LONG-TERM ECONOMIC GROWTH IN IOWA. Henderson: SENATOR HATCH, LET ME REPHRASE THE QUESTION FOR YOU. GOVERNOR VILSACK, THIS PAST WEEK AFTER THE RULING, IS NOT MOVING AN INCH EITHER. I MEAN DOESN'T ONE OF THE SIDES IN THIS CONTEST HAVE TO MAKE A MOVE TO SHOW THAT THERE'S AN OPENING FOR COMPROMISE? Hatch: THE LEGISLATURE HAS FAILED IN THE LAST TWO YEARS TO DEVELOP A COMPREHENSIVE APPROACH. I THINK IT'S -- I THINK IT'S SHAMEFUL TO THINK THAT IN TWO WEEKS OR IN TWO DAYS WE CAN GET BACK AND TRY TO GET AN AGREEMENT IN AN ELECTION YEAR. THAT'S THE POLITICAL GAMESMANSHIP THAT HAS MARKED THIS LEGISLATURE FOR THE PAST TWO YEARS. IT IS CLEAR THAT IF WE ARE SERIOUS ABOUT ECONOMIC GROWTH STRATEGIES, WE HAVE TO FIX THE IMMEDIATE PROBLEM, AND THAT IS WHETHER OR NOT WE CAN CONTINUE TO PROVIDE THE FINANCIAL ASSISTANCE TO THE BUSINESSES, WHICH HAS BEEN PROVEN TO PRODUCE 11,000 JOBS WITH ABOUT $68 MILLION. IT IS A PROVEN SUCCESS. AND I THINK THAT TO HOLD THAT UP FOR A POLITICAL AGENDA FIVE MONTHS FROM AN ELECTION IS THE KIND OF POLITICAL GAMESMANSHIP THAT HAS MARKED AND CHARACTERIZED THIS LEGISLATURE. Glover: SENATOR LAMBERTI, BOTH YOU AND SENATOR HATCH HAVE JUST MADE THE CASE FOR YOUR ECONOMIC POINT OF VIEW, BUT I'D LIKE TO GET BACK TO KAY'S QUESTION. THAT'S A RECIPE FOR GRIDLOCK. YOU HAVE A POINT OF VIEW. THE GOVERNOR HAS A POINT OF VIEW. NEITHER ONE OF YOU ARE MOVING. WHY WOULD ANYTHING CHANGE IN A SPECIAL SESSION? Lamberti: WELL, WE ARE WILLING TO MOVE. WE ARE WILLING TO TALK ABOUT MOVEMENT ON REGULATORY REFORM: IS THERE A WAY TO FIND SOME MIDDLE GROUND? WE'RE WILLING TO TALK ABOUT TAX REFORM. I'M NOT WILLING TO SAY A REVENUE-NEUTRAL INCOME TAX PROPOSAL -- I MEAN THAT'S LIKE REARRANGING THE CHAIRS ON THE DECK OF THE TITANIC. IT ACHIEVES NOTHING. BUT THERE IS GROUND IN THE MIDDLE BETWEEN WHAT WE PASSED LAST YEAR AND SIMPLY THE VALUES FUND. AND I'D COMMENT ON THE VALUES FUND. I THINK THE VALUES FUND HAS GREAT POTENTIAL. THE NUMBER THAT'S THROWN OUT IS ABOUT 11,000 JOBS. WELL, TO DATE WE'VE REALLY ONLY CREATED A HANDFUL OF JOBS. WE HAVE RETAINED SEVERAL THOUSAND. CLEARLY JOB RETENTION IS IMPORTANT BUT IT IS NOT GOING TO DO ANYTHING TO FUNDAMENTALLY GROW THIS ECONOMY LONG TERM. THE BALANCE OF THE VALUES FUND IS A PROMISE OF A LOT OF JOBS TO BE CREATED. I BELIEVE THAT IT'S GOING TO HAVE SOME SUCCESS. BUT TO SIT HERE TODAY AND CALL THIS AN OVERWHELMING SUCCESS I THINK IS VERY PREMATURE. THAT IS WHY WE ARE SO FOCUSED ON A MULTIFACETED APPROACH TO ECONOMIC DEVELOPMENT. WE THINK THE OTHER ELEMENTS HAVE TO COME INTO PLAY. WE'RE WILLING TO TALK WITH THE GOVERNOR ABOUT IT, BUT IT'S NOT ACCEPTABLE FOR HIM TO SIMPLY SAY, "IT'S MY WAY OR NO WAY." LET'S REMEMBER, WE ARE HERE TODAY FOR ONE REASON, AND IT'S BASED UPON THE GOVERNOR'S UNCONSTITUTIONAL LINE-ITEM VETO. WE WOULD NOT BE HERE TODAY IF HE HAD ABIDED BY THE CONSTITUTION. Glover: SENATOR HATCH, SAME QUESTION TO YOU. YOU'VE JUST MADE THE CASE FOR AN IOWA VALUES FUND TO GROW THE ECONOMY, A LEGITIMATE POLITICAL CASE, WHETHER YOU AGREE WITH IT OR NOT. BUT THE PLAYERS ARE STILL THE SAME AS THEY WERE IN 2003. THE ARGUMENT IS STILL THE SAME AS THEY WERE IN 2003. WHY IS IT GOING TO BE DIFFERENT? Hatch: IT'S NOT GOING TO BE DIFFERENT, WHICH IS WHY, IF WE GO BACK, THE ONLY THING WE SHOULD DO IS CORRECT THE IOWA VALUES FUND SO THAT IT MEETS CONSTITUTIONAL CONDITIONS AND LEAVE THE DISCUSSION FOR THIS ELECTION. THE REPUBLICANS HAVE FAILED AT PROVIDING A LEGITIMATE STRATEGY THAT HAD BIPARTISAN SUPPORT IN TWO YEARS OF THEIR CONTROL OF THE LEGISLATURE. YOU'RE NOT GOING TO CREATE A BIPARTISAN SUPPORT IN TWO WEEKS. Yepsen: SENATOR LAMBERTI, A COUPLE OF FOLLOW-UP QUESTIONS. WHEN THIS PACKAGE WAS PUT TOGETHER THE FIRST TIME, THERE WAS A LOT OF REPUBLICAN OPPOSITION IN THE SENATE TO THE IDEA OF THE VALUES FUND IN THE FIRST PLACE. I MEAN I HEARD THE PHRASE "GOVERNMENT CAN'T PICK WINNERS AND LOSERS; THAT OUGHT TO BE A JOB OF THE MARKETPLACE." IS THE FACT THAT THERE HAS NOW BEEN SOME AWARDS MADE, THERE'S BEEN SOME JOBS RETAINED, DO YOU THINK YOUR COLLEAGUES IN THE SENATE ARE A LITTLE WARMER TO THE IDEA THAT THE VALUES FUND MIGHT BE A GOOD THING? Lamberti: WELL, WE WERE ABLE TO CONVINCE OUR MEMBERS THAT, AS A COMPONENT OF A BROADER STRATEGY, THAT THE VALUES FUND HAD BENEFITS. AND AS I SAID, THERE'S A LOT OF POTENTIAL THERE. AND I THINK THEY WANT TO MAINTAIN THAT, AND THEY ALSO WANT TO KEEP OUR COMMITMENTS ON THOSE CONTRACTS THAT WE'VE HAD. IT IS INTERESTING TO NOTE -- AND I REFER TO THIS AS SOME OF MY COLLEAGUES -- DEMOCRAT COLLEAGUES IN THE SENATE HAVING A JOHN KERRY MOMENT, WHERE THEY NOW THINK THE VALUES FUND WAS THE BEST THING THAT WE'VE DONE IN THE LAST TWENTY-FIVE YEARS, AND I HAVE TO REMIND THEM THEY ALL VOTED AGAINST IT. NOW, IT'S NOT QUITE AS BAD AS THE HOUSE DEMOCRATS WHO CAN ACTUALLY COME OUT AND SAY THAT THEY VOTED FOR THE VALUES FUND BEFORE THEY VOTED AGAINST IT. BUT, YOU KNOW, WE BELIEVE THAT IS AN IMPORTANT PART OF THE OVERALL ECONOMIC DEVELOPMENT STRATEGY. TO SIMPLY SAY THAT IS OUR ENTIRE STRATEGY TO GROW THIS ECONOMY IS GOING TO BE DIFFICULT BECAUSE WE RECOGNIZE IT'S A FAILED POLICY. WE HAVE -- AND WE HAVE PUT FORTH A STRONG ECONOMIC DEVELOPMENT PACKAGE. NOW, THE FACT IS WE HAVE A CLEAR DISTINCTION. WE HAVE A GOVERNOR WHO BELIEVES WE NEED TO RAISE TAXES, AND WE HAVE A REPUBLICAN-CONTROLLED LEGISLATURE WHO SAYS WE NEED TO REDUCE TAXES. THOSE ARE CLEAR DISTINCTIONS. IT MAY END UP THAT GOES TO THE PEOPLE IN NOVEMBER, BUT I DON'T THINK IT'S FAIR TO SAY THAT WE HAVEN'T PUT FORTH A STRONG PACKAGE. Yepsen: IS IT POSSIBLE, SENATOR LAMBERTI, THAT OTHER THINGS CAN NOW BE BROUGHT INTO THE MIX HERE OF A POLITICAL DEAL? I MEAN WE'RE TALKING ABOUT THE VALUES FUND, PLUS REGULATORY REFORM, PLUS TAX CUTS AND HOW THAT DIDN'T WORK. BUT WHAT ABOUT BRINGING OTHER THINGS INTO THE MIX? AND SPECIFICALLY, SENATOR, I'M THINKING OF SOMETHING THAT REPRESENTATIVE BILL DIX, THE CHAIRMAN OF THE HOUSE APPROPRIATIONS COMMITTEE, SUGGESTED, AND THAT WAS THAT SINCE THE LEGISLATURE ADJOURNED, YOU NOW HAVE MORE MONEY. THERE ARE ADDITIONAL TAX REVENUES COMING IN. SO IS ONE OPTION FOR THE LEGISLATURE, AS PART OF THIS DEAL, TO DO WHAT HE SUGGESTS, WHICH IS TO SPEND MORE MONEY ON EDUCATION AND SOME OF THESE OTHER PRIORITIES YOU WEREN'T ABLE TO FUND DURING THE REGULAR SESSION? Lamberti: WELL, I THINK CERTAINLY IT'S GOING TO BE OUT THERE. I MEAN WE OBVIOUSLY KNOW WE'RE GOING TO END THE YEAR HOPEFULLY WITH SOME ADDITIONAL REVENUE. AT THE SAME TIME, I'M GOING TO BE VERY CAUTIOUS. NUMBER ONE, IT'S MONEY WE DON'T HAVE IN THE BANK YET. I MEAN IT'S A PROJECTION AT THIS POINT. WE HAVEN'T CLOSED THE BOOKS ON THE YEAR, AND AS WE'VE SEEN IN THE LAST COUPLE YEARS, WE'VE HAD PROBLEMS WITH THIS ACCOUNTING MANEUVER CALLED ACCRUALS, WHERE WE'VE ENDED THE YEAR SHORT. SO I THINK WE'VE GOT TO BE VERY CAUTIOUS ABOUT SPENDING MONEY WE DON'T HAVE UNTIL WE KNOW EXACTLY WHAT WE DO HAVE. Yepsen: SENATOR HATCH, THE SAME QUESTION. ARE THERE THINGS THAT YOU SEE THE DEMOCRATS COULD ACCEPT TO SWEETEN THIS POT? Hatch: THIS IS A CLEAR INDICATION THAT THE REPUBLICANS ARE DESPERATE. FOR THE HOUSE APPROPRIATIONS COMMITTEE CHAIR TO SUGGEST THAT THERE'S A HUNDRED MILLION DOLLARS, AS WAS REPORTED IN FRIDAY'S PAPER, OF ADDITIONAL SPENDING AVAILABLE TO PUT IN A POT TO SWEETEN THIS DEAL I THINK IS FOLLOWING THE SAME FORMULA FOR DISASTER THAT THE REPUBLICANS HAVE BEEN FOLLOWING FOR SEVERAL YEARS. AND THAT IS NOT HAVING A CLEAR STRATEGY ON DEVELOPING THIS ECONOMY AND MEETING OUR REQUIREMENTS FOR PROPERTY TAX REFORM AND FOR EDUCATION. AND I THINK THAT'S JUST -- THINK IT'S SHAMEFUL THAT THEY'RE GOING TO TRY TO DO THIS AGAIN IN THE NEXT TWO WEEKS. Yepsen: ISN'T IT TRUE, SENATOR HATCH, THAT MINORITY DEMOCRATS REALLY DON'T WANT THE LEGISLATURE TO DO ANYTHING, THAT YOU'D RATHER HAVE, AT THIS STAGE IN THE CAMPAIGN, 130 DAYS FROM -- YOU'D RATHER HAVE AN ISSUE, WHICH YOU'VE MENTIONED SEVERAL TIMES HERE, THE ACCUSATION REPUBLICANS HAVEN'T DONE ANYTHING. YOU IN FACT WOULD REALLY RATHER HAVE AN ISSUE TO BEAT UP REPUBLICANS WITH THAN YOU WOULD HAVE A VALUES FUND? Hatch: NO, ACTUALLY -- WELL, PARTLY. I THINK WE WANT TO COME BACK AND STRAIGHTEN OUT THE IOWA VALUES FUND. I THINK THAT IS A RESPONSIBILITY OF GOOD PUBLIC SERVANTS. AND IF WE NEED TO COME BACK, I THINK WE SHOULD DO THAT FOR THAT PURPOSE ALONE. BUT TO MARRY THAT WITH A BUNCH OF IDEAS THAT INDICATE THAT THE REPUBLICAN MAJORITY IN THE LEGISLATURE IS NOW SERIOUS ABOUT FUNDING EDUCATION, FUNDING PROPERTY TAX CREDITS, IN THE ELEVENTH HOUR OF THIS YEAR WHEN THEY COULDN'T DO IT FOR TWO YEARS, I THINK IS A POLITICAL GAME THAT IS SHAMEFUL IN THIS ELECTION YEAR. Henderson: EARLIER THIS MONTH GOVERNOR VILSACK SAID THERE WOULD BE DOZENS OF STATE EMPLOYEES LAID OFF BECAUSE OF THE BUDGET PLAN THAT WAS DEVELOPED. IF INDEED THERE IS EXTRA MONEY, SHOULD SOME OF THAT EXTRA MONEY BE USED TO ENSURE THAT STATE GOVERNMENT ISN'T PARED ANY THINNER THAN IT ALREADY IS? Lamberti: WELL, YOU KNOW, IT'S INTERESTING, WELL BEFORE WE CAME INTO SESSION, THE GOVERNOR ANNOUNCED THAT HE WOULD NOT BE PROPOSING ANY FUNDING FOR SALARIES FOR STATE EMPLOYEES. I THINK HE MADE THAT DECISION. AND DESPITE THE FACT THAT HE PROPOSED $300 MILLION IN NEW TAXES, HE STILL PROPOSED ZERO DOLLARS FOR STATE EMPLOYEES. AND HE FELT THAT OVER THE COURSE OF EIGHTEEN MONTHS THAT THEY COULD ABSORB SOME OF THAT. AND IN CRITICAL AREAS, PUBLIC SAFETY, PRISONS, WE DID THAT ALREADY. SO I'M GOING TO BE VERY CAUTIOUS ABOUT GOING AND SPENDING MONEY WE DON'T HAVE. THE OTHER THING THAT HASN'T BEEN DISCUSSED HERE ABOUT SPENDING MONEY YOU DON'T HAVE IS WE HAVE USED MONEY FROM OUR SENIOR LIVING TRUST FUND, FROM OUR TOBACCO ENDOWMENT TO PROP THIS BUDGET UP, AND WE MADE A COMMITMENT TO REPAY IT. IT SEEMS TO ME WE OUGHT TO KEEP THAT COMMITMENT BEFORE WE START SPENDING MONEY. Henderson: SO IT SOUNDS AS IF YOU ARE NOT ON THE BILL DIX BOAT WAGON HERE IN REGARD TO SPENDING THE $100 MILLION. Lamberti: THAT WOULD BE CORRECT. Glover: SENATOR LAMBERTI, I'VE HEARD TWO CONTRASTING APPROACHES TO RESTARTING THIS STATE'S ECONOMY MADE HERE TODAY. ISN'T THAT A RECIPE FOR AN ELECTION? ISN'T IT TIME TO TAKE THESE ARGUMENTS TO THE VOTERS AND SAY WHICH DIRECTION DO YOU WANT TO GO? Lamberti: THAT MAY ULTIMATELY BE WHERE WE END UP. BUT AT THE SAME TIME, WE HAVE AN ISSUE HERE WE HAVE TO DEAL WITH, AND THAT IS THE RESULT OF THE COURT CASE AND THE VALUES FUND AND DEALING WITH THOSE CONTRACTS. Glover: BUT HASN'T THIS GROUP OF ELECTED OFFICIALS DEMONSTRATED THEY ARE INCAPABLE OF RESOLVING THAT ISSUE? DIDN'T YOU DEMONSTRATE THAT IN 2003? Lamberti: NOT NECESSARILY. WE BELIEVED THE OUTCOME OF THE COURT CASE WOULD HAVE HAD OUR POLICY GO INTO EFFECT. I THINK IT'S PREMATURE TO SAY WE DEMONSTRATED WE COULDN'T GET ALONG. AND YOU KNOW, UNLIKE -- IT IS TRUE BEING IN THE MINORITY, YOU'RE REALLY NOT RESPONSIBLE FOR PASSING LEGISLATION. WE ARE, THE GOVERNOR IS, AND I THINK IT WOULD BE IRRESPONSIBLE FOR US TO SIMPLY SAY WE'RE NOT GOING TO SIT DOWN AND TRY TO WORK THIS OUT. Glover: HELP ME OUT HERE. I'M STILL STRUGGLING TO UNDERSTAND HOW THINGS WORK UP THERE. WHAT'S CHANGED SINCE 2003? Lamberti: WHAT'S CHANGED IS THAT WE NOW HAVE SOMETHING CLOSE TO $70 MILLION IN CONTRACTS OUTSTANDING AND AN ISSUE WE HAVE TO DEAL WITH CAUSED BY THE GOVERNOR'S UNCONSTITUTIONAL ACTION. HE HAS A PROBLEM THAT HE HAS TO SOLVE. WE HAVE A PROBLEM THAT WE HAVE TO SOLVE. THAT'S A LITTLE DIFFERENT THAN WHERE WE WERE LAST YEAR. Glover: SENATOR HATCH, ISN'T THIS THE TIME TO HAVE AN ELECTION. I MEAN YOU HAVE JUST TWO CONTRASTING POINTS OF VIEW, IT SEEMS TO ME. Hatch: THIS IS THE TIME THAT WE NEED TO TAKE THIS TO THE VOTERS FOR A DIALOGUE. WE HAVE SAID ALL ALONG THAT THE REPUBLICAN MAJORITY JUST HAS NOT BEEN LISTENING TO THE VOTERS OF THE STATE. THEY HAVEN'T BEEN LISTENING TO THEIR OWN COMMUNITIES. WHETHER OR NOT IT'S DES MOINES THAT'S TRYING TO GRAB PART OF THE UTILITY TAX -- THE SALES TAX THAT WE REPEALED OR SMALL TOWNS TRYING TO STRUGGLE WITH THE PROPERTY TAX CREDIT THAT WAS TAKEN AWAY FROM THEM, IT IS TIME FOR NOW THE VOTERS TO DECIDE WHICH WAY DO YOU WANT TO GO. AND I THINK THAT'S REALLY THE KEY HERE. AND FOR THE REPUBLICANS TRYING TO PEDAL BACK, REPRESENTATIVE DIX TRIED TO DO THAT IN TODAY'S PAPER, THAT WHAT WE WANT TO DO IS IDENTIFY AREAS OF POLITICAL CONFLICT THAT THEY COULD SOFTEN BEFORE THE ELECTION. LET'S TAKE THIS TO THE CITIZENS. Henderson: SENATOR LAMBERTI HAS SUGGESTED, THOUGH, THAT YOU AT LEAST NEED TO PUT SOME LEGAL FOOTING UNDER THE CONTRACTS THAT YOU'VE ALREADY MADE WITH THESE 36 COMPANIES. I MEAN YOU'VE INDICATED THAT MAYBE YOU DON'T NEED A SPECIAL SESSION. DON'T YOU AT LEAST NEED A SPECIAL SESSION TO HAVE LEGISLATORS SORT OF LEGALIZE THE CONTRACTS THAT ALREADY EXIST? Hatch: IF IT'S DETERMINED. AND AT THIS DAY RIGHT NOW, WE DON'T KNOW IT'S DETERMINED WHETHER OR NOT YOU NEED THAT LEGAL FOOTING. WE KNOW THE APPROPRIATIONS HAVE BEEN SPENT. WE KNOW THE CONTRACTS HAVE BEEN SIGNED. IF IT DOES NEED THE LEGAL FOOTING, WE SHOULD GO BACK AND CORRECT THAT ISSUE ALONE. WE CAN'T AGREE, AS DEMONSTRATED TODAY, SENATOR LAMBERTI AND I AND OUR DIFFERENT CAUCUSES, AND ACTUALLY THE CAUCUS OF THE REPUBLICANS IN THE SENATE AND THE CAUCUS OF THE REPUBLICANS IN THE HOUSE ARE DIFFERENT BETWEEN THE TWO OF THEM. AND YOU'LL NEVER GET THE AGREEMENT NECESSARY TO REALLY ESTABLISH A LONG-TERM POLICY. I THINK WE HAVE TO TAKE THAT AND HAVE A DIALOGUE WITH THE VOTERS. Henderson: I GREW UP ON A FARM AND THE OLD SAYING WAS WE NEED TO MAKE HAY WHILE THE SUN SHINES. IF REPUBLICANS DO AS SOME HAVE SUGGESTED, JUST PASS THE LEGISLATION THAT YOU PASSED IN 2003 AND MAKE GOVERNOR TOM VILSACK EAT IT, ARE YOU DOING THAT BECAUSE HE IS NOW A PLAYER ON THE NATIONAL STAGE, IN ORDER TO EMBARRASS HIM, IN ORDER TO MAKE HIM ACCEPT TAX CUTS THAT HE DOESN'T WISH TO SIGN INTO LAW? Lamberti: WHEN WE PASSED HOUSE FILE 692, WE DID IT BECAUSE WE BELIEVED IT WAS THE RIGHT STRATEGY FOR IOWA. IT WAS A THREE-PRONGED APPROACH TO ECONOMIC DEVELOPMENT. IT WAS THE VALUES FUND. IT WAS TAX REFORM. IT WAS REGULATORY REFORM. AND, YOU KNOW, WE TALK ABOUT THIS TAKING IT TO THE PEOPLE. I'M PERFECTLY WILLING TO TAKE THAT TO THE PEOPLE AND SAY THIS IS HOW WE -- THIS IS OUR PLAN FOR GROWING THE ECONOMY. SO IF WE DECIDE THAT THAT'S THE PATH WE'RE GOING TO TAKE IN A SPECIAL SESSION, IT'S NOT GOING TO BE TO EMBARRASS THE GOVERNOR, IT'S GOING TO BE BECAUSE THAT'S WHAT WE BELIEVE IS NEEDED TO GROW THE ECONOMY. Glover: SENATOR LAMBERTI, AREN'T WE KIND OF KIDDING OURSELVES WITH ALL THIS ARGUING ABOUT THE STATE -- RECHARGING THE STATE'S ECONOMY? ISN'T THE GOVERNMENT REALLY A FAIRLY SMALL PLAYER. ISN'T THE ECONOMY A MUCH LARGER PICTURE AND WHATEVER THE STATE GOVERNMENT DOES IS GOING TO HAVE RELATIVELY MINIMAL EFFECT ON IT? Lamberti: THAT IS TRUE AND I THINK THAT'S WHERE WE TALK ABOUT -- Glover: WELL, THEN WHY ALL THE NOISE? Lamberti: WELL, BECAUSE WHAT STATE GOVERNMENT CAN DO IS CREATE AN ENVIRONMENT WHERE BUSINESSES, PARTICULARLY SMALL BUSINESSES, CAN THRIVE, AND THAT IS THE ROLE OF STATE GOVERNMENT. AND THAT POINTS DIRECTLY BACK TO THE THINGS THE STATE CAN DO. IT CAN REFORM REGULATION TO MAKE IT EASIER TO DO BUSINESS IN IOWA. IT CAN REDUCE THE TAX BURDEN. WE'RE SEEING ON THE NATIONAL SCENE, AS A RESULT OF THE TAX CUTS THAT CONGRESS PASSED, AN ECONOMY THAT'S STARTING TO REBOUND AND REBOUND SIGNIFICANTLY, SOMETHING LIKE A MILLION JOBS SINCE AUGUST. WE WANT IOWANS TO BENEFIT FROM THAT AS WELL. THAT IS A ROLE FOR GOVERNMENT. WE CAN IMPROVE THE ECONOMIC CONDITIONS. BUT LET'S REMEMBER, RATHER THAN HANDING OUT GRANTS TO A HANDFUL OF BUSINESSES, THE DRIVER OF THIS ECONOMY IN IOWA IS THE THOUSANDS OF SMALL BUSINESSES ACROSS THE STATE. WHAT AFFECTS THEM MOST DIRECTLY ARE TAXES AND REGULATIONS. WE DO HAVE A ROLE THERE. Glover: SENATOR HATCH, SAME QUESTION TO YOU. ISN'T STATE GOVERNMENT -- OF ALL THE LEVELS OF THE GOVERNMENT, OF ALL THE FORCES IN THE ECONOMY, ISN'T STATE GOVERNMENT A RELATIVELY MINOR PLAYER? Hatch: WELL, MOST OF THEM ARE MINOR PLAYERS. WE CAN ONLY GENERATE IDEAS AND STIMULATE COMPANIES AND LOCAL GOVERNMENTS TO INVEST IN THEIR OWN INFRASTRUCTURE, WHETHER IT BE JOBS OR ROADS. BUT ONE THING WE HAVE -- WHAT WE CAN DO -- ONE OF THE THINGS WE CAN DO REALLY VERY CLEARLY IS MAKE IT EASIER FOR MIDDLE-CLASS IOWA FAMILIES. WE DON'T HAVE TO RAISE THEIR PROPERTY TAXES. WE DON'T HAVE TO MAKE IT TOUGHER TO GO TO SCHOOL. WE DON'T HAVE TO MAKE IT TOUGHER TO SEND OUR PARENTS INTO ASSISTED LIVING PROGRAMS. AND THAT'S WHAT THIS LEGISLATURE HAS DONE, AND THAT'S REALLY THE WAY THE DEBATE SHOULD BE, NOT SO MUCH ON WHETHER OR NOT WE'RE GOING TO GIVE GRANTS TO BUSINESSES BUT WHETHER OR NOT WE'RE GOING TO HELP IOWA FAMILIES. YOU KNOW, WHAT GOES ON EVERY DAY IN OUR KITCHENS, TALKING ABOUT HOW CAN WE PREPARE FOR THE NEXT DAY, HOW CAN I GET A BETTER JOB, HOW CAN I PROVIDE HEALTH CARE TO MY FAMILY, THOSE ARE THE ISSUES THAT IOWANS WANT. THOSE ARE THE ISSUES THAT EVERYDAY IOWANS NEED, AND THAT'S WHERE THE DEBATE SHOULD FOCUS ON. Yepsen: SENATOR LAMBERTI, SINCE THE LEGISLATURE ADJOURNED, A NEW ISSUE HAS EMERGED IN IOWA, AND THAT IS THE PHENOMENON OF MANY CITIES TALKING ABOUT RAISING WHAT THEY CALL THEIR FRANCHISE FEE, WHICH IS BASICALLY A SALES TAX THAT THEY IMPOSE ON RESIDENTAL UTILITY BILLS. NOW, YOU FOLKS -- THE REPUBLICANS AND THE DEMOCRATIC GOVERNOR AGREED WE WERE GOING TO PHASE OUT THE SALES TAX ON UTILITY BILLS. NOW THE CITIES ARE PROPOSING TO COME IN AND CAPTURE IT FOR THEMSELVES. SENATOR LAMBERTI, WILL THE LEGISLATURE TAKE ACTION IN ANY SPECIAL SESSION TO STOP THAT FROM HAPPENING? Lamberti: IT'S KIND OF HARD TO PREDICT. I THINK WE WILL HAVE THOSE DISCUSSIONS, BECAUSE MY REACTION HAS NOT BEEN GOOD TO WHAT'S BEEN PROPOSED. WE SPENT THE BETTER PART OF THREE SESSIONS PHASING OUT THE SALES TAX ON RESIDENTAL UTILITIES. AND NOW WE HAVE CITIES, PARTICULARLY DES MOINES, PROPOSING TO ESSENTIALLY REINSTATE THAT THROUGH A FRANCHISE TAX. IT'S A REGRESSIVE TAX. IT HITS LOW-INCOME PEOPLE HARDER THAN OTHERS. AND IF THAT IS THE ROUTE THAT WE'RE SEEING THAT CITIES ARE GOING TO TAKE, WE MAY COME IN AND ACT. IT WOULD BE BETTER IF WE HAD THAT DISCUSSION IN THE BROADER CONTEXT OF OVERALL TAX REFORM FOR LOCAL GOVERNMENTS, PROPERTY TAX REFORM. AND YOU MIGHT PRESERVE THAT AS A WAY TO DIVERSIFY YOUR TAX BASE AT THE LOCAL LEVEL. BUT SIMPLY COMING IN AND IMPOSING THAT TAX THAT WE WORKED HARD TO TAKE AWAY I THINK IS GOING TO BE UNIVERSALLY UNPOPULAR AT THE LEGISLATURE. AND I THINK IF WE DO COME BACK IN TO A SPECIAL SESSION, WE WILL AT LEAST SPEND SOME TIME TALKING ABOUT IT. Yepsen: SENATOR HATCH, HOW DO DEMOCRATS -- AREN'T THE CITIES TRYING TO GET THIS IN UNDER THE WIRE BEFORE YOU COME BACK IN THE REGULAR SESSION IN JANUARY? DON'T YOU HAVE TO PUT A STOP TO IT? Hatch: THEY'RE DESPERATE BECAUSE THE POLICIES OF THIS LEGISLATURE HAS FORCED THEM TO FIND DIFFERENT WAYS OF REVENUE. Yepsen: OKAY. BUT REGARDLESS OF WHY THEY'RE DOING IT, SHOULD THEY BE DO DOING IT WHEN THEY'RE TAKING AWAY A TAX BREAK THAT -- Hatch: WELL, CLEARLY -- I MUST CORRECT YOU. IT WAS, I THINK, SENATOR CONNOLLY THAT RECOMMENDED THIS PROPOSAL IN THE SENATE THREE YEARS AGO, AND THE REPUBLICANS AND THE DEMOCRATS AGREED TO REPEALING THAT SALES TAX ON UTILITIES. HOWEVER, WHAT HAS TRANSPIRED SINCE THEN IS THAT THE CITIES HAVE BEEN SO DESPERATE, THEY'RE LOOKING AT NEW REVENUE SOURCES. YES, WE SHOULD NOT HAVE THAT TRANSFER. WE SHOULD GO BACK AND CLEARLY STATE THAT THE CITIES AND TOWNS SHOULD NOT GRAB THAT MONEY; HOWEVER, WE HAVE TO GIVE THE CITIES AND TOWNS BACK THEIR PROPERTY TAX CREDITS THAT THE LEGISLATURE TOOK AWAY THE LAST TWO YEARS. Henderson: EARLIER THIS MONTH, THE IOWA RACING AND GAMING COMMISSION VOTED TO LIFT ITS MORATORIUM ON NEW GAMBLING LICENSES, OPENING THE FLOODGATES FOR APPLICATIONS. SENATOR LAMBERTI, AS SOMEONE WHO REPRESENTS AN ALREADY EXISTING INSTITUTION, ARE YOU CONCERNED THAT POLK COUNTY MAY LAND A COMPETITOR FOR THAT ALREADY EXISTING INSTITUTION? Lamberti: WELL, I THINK THERE IS SOME CONCERN ABOUT THE DISCUSSIONS, NOT JUST IN POLK COUNTY BUT DALLAS COUNTY, FOR EXAMPLE. AND MY HOPE WOULD BE THAT THE RACING AND GAMING COMMISSION WILL DO WHAT THEY'VE DONE IN THE PAST: LOOK AT ALL THE COMPETITIVE ANGLES ABOUT WHAT KIND OF IMPACT THIS WOULD HAVE ON EXISTING FACILITIES, BEFORE THEY APPROVED ANOTHER LICENSE. AND ALSO, I THINK, IF ANOTHER LICENSE IS GOING TO HAPPEN IN POLK COUNTY, MY THOUGHT IS THERE'S GOING TO HAVE TO BE SOME KIND OF COOPERATIVE ARRANGEMENT BETWEEN THE CITY, THE COUNTY, PRAIRIE MEADOWS. I JUST DON'T SEE THE PEOPLE OF POLK COUNTY APPROVING ANOTHER LICENSE IN DIRECT COMPETITION WITH PRAIRIE MEADOWS. Henderson: SENATOR HATCH, DO YOU SHARE THAT VIEW? YOU SPOKE OUT DURING THE LEGISLATIVE SESSION AGAINST HAVING A CASINO IN DOWNTOWN DES MOINES. Hatch: THAT'S CORRECT. I THINK THERE ARE PLACES THAT YOU MIGHT HAVE A CASINO IN POLK COUNTY. BUT THAT ARGUMENT PROBABLY SPEAKS TO THE NEED FOR CITY AND COUNTY TO MERGE, WHICH THE REFERENDUM WILL BE THIS NOVEMBER. THEN YOU WON'T HAVE THIS BICKERING BETWEEN THE CITY AND COUNTY -- Glover: BUT THAT'S AN ENTIRELY DIFFERENT SHOW, SENATOR. [ LAUGHTER ] SENATOR LAMBERTI, THE SUPREME COURT DID SOMETHING ELSE TO YOU LAST WEEK. THE SUPREME COURT TOOK AWAY SOME OF THE PROTECTIONS AGAINST LAWSUITS BY LARGE HOG-LOT OPERATORS. IS THE LEGISLATURE GOING TO WANDER BACK INTO THAT TO TRY TO RENEW SOME OF THOSE PROTECTIONS? Lamberti: I DOUBT IT. I THINK WHEN YOU START TALKING ABOUT NUISANCE PROTECTION, I THINK THE DECISION OF THE COURT WAS FAIRLY CLEAR AND SET PARAMETERS FOR WHAT WE CAN AND CANNOT DO. YOU KNOW, WE'D BE WILLING TO TALK TO PEOPLE, BUT I THINK IT WAS A PRETTY CLEAR-CUT CASE, AND I'M NOT SURE THERE'S A LOT WE CAN DO ON THAT ISSUE. Glover: SENATOR HATCH, THE SAME QUESTION TO YOU. DO YOU SEE THE LEGISLATURE TRYING TO WANDER BACK INTO THIS, TO OFFER NEW PROTECTIONS, TO TRY TO TAKE AWAY SOME PROTECTIONS? DO YOU SEE THE LEGISLATURE HAVING ANY WILL TO ACT HERE? Hatch: WELL, I THINK THERE'S SOME -- THERE'S SOME COMMUNITY GROUPS THAT WANT US TO DISCUSS THIS ISSUE. AND I THINK THAT, AT LEAST UNDER A DEMOCRATIC LEGISLATURE, THAT IS IN THE MAJORITY, WE WILL LISTEN TO THE PEOPLE OF THE STATE UNDER ANY CIRCUMSTANCE. WHETHER OR NOT WE ACTUALLY CAN FORM A BIPARTISAN COALITION TO GET SOMETHING MORE DONE, I CAN'T SPEAK. Glover: SENATOR LAMBERTI, WE'VE ONLY GOT A MINUTE OR SO LEFT. LET'S ANSWER THE QUESTION THAT SEEMS TO BE RUNNING THROUGH EVERYTHING THAT'S BEEN TALKED ABOUT HERE TODAY. WILL THE REPUBLICANS CONTROL THIS LEGISLATURE AFTER NOVEMBER? Lamberti: I BELIEVE SO. WE HAVE THE BEST CANDIDATES. Glover: SENATOR HATCH, DO DEMOCRATS HAVE A REALISTIC SHOT AT GETTING EITHER CHAMBER IN THE LEGISLATURE IN NOVEMBER? Hatch: WE PROBABLY HAVE THE BEST SHOT IN THE LAST TEN YEARS BECAUSE OF OUR CANDIDATES, BUT MOSTLY -- MOSTLY BECAUSE THE ISSUES THAT HAVE BEEN UNRESOLVED ARE THE ISSUES THAT ARE MOST IN THE MINDS OF THE PEOPLE OF THIS STATE: EDUCATION, ECONOMIC DEVELOPMENT. THE REPUBLICANS FAILED TO ANSWER THOSE QUESTIONS, PROVIDE THE SOLUTIONS THAT ARE NECESSARY. AND I BELIEVE WE HAVE THE ABILITY TO TAKE THAT TO EACH VOTER AND TO COME UP WITH, I THINK, A MAJORITY IN -- Glover: WHICH CHAMBER DO YOU GET? Hatch: WE'RE GOING TO GET BOTH OF THEM. Yepsen: SENATOR LAMBERTI, TEN SECONDS. THE COURT ADMITTED IT MADE A MISTAKE TOO IN PREVIOUS RULINGS. IS THIS GOING TO CHANGE THE WAY THE LEGISLATURE DOES BUSINESS WITH GOVERNORS IN THE FUTURE? Lamberti: I THINK IT WILL. I THINK WE HAVE A MUCH CLEARER DEFINITION OF WHAT AN APPROPRIATION BILL IS AND WHERE THE LINES ARE DRAWN, AND THIS TRULY WAS A HISTORIC DECISION. Yepsen: THANK YOU. THANK YOU, SENATOR HATCH. APPRECIATE YOU BOTH BEING WITH US TODAY. AND THAT'S IT FOR THIS WEEK'S EDITION OF "IOWA PRESS." I'M DAVID YEPSEN OF "THE DES MOINES REGISTER" SITTING IN FOR DEAN BORG. THANK YOU FOR JOINING US HERE ON STATEWIDE IOWA PUBLIC TELEVISION.
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