Governor Chet Culver used a speech before the Iowa Taxpayers Association to unveil 90 cost-saving recommendations proposed by consultant Public Works of Philadelphia that he said have the potential to save $341 million in the first year, and nearly $1.7 billion in the next five years.
Many of the proposals call for consolidation. They include consolidating the state's 223 data centers, 23 e-mail systems, and $2 million in wireless-equipment contracts now purchased from seven vendors. They also call for consolidating mailrooms, Department of Natural Resources offices in Des Moines, and administrative functions at Department of Human Services institutions.
The report also calls for reducing the state's car fleet, consolidating property management, and selling surplus properties, including 5 to 10 percent of the 8,000 acres of state-owned prison farms that are no longer mission-critical.
And it calls for reducing human-resource staff in departments, using state master contracts for commonly purchased goods, negotiating Medicaid durable-medical-equipment prices, increasing efforts to collect debt, and making it easier to collect unpaid taxes.
A few days after Culver's speech, the legislature's State Government Reorganization Commission voted 10-0 to approve a list of nearly 100 recommendations designed to make state government more efficient, and the commission's co-chair said a bill will be on the Senate floor by the end of January.
The recommendations cover a large territory, including consolidating e-mail services, requiring consolidated purchasing in the executive branch, downsizing vehicle fleets, sunsetting tax credits and boards, reducing managerial positions, and eliminating funded but unfilled positions.
Commission co-chair Senator Staci Appel (D-Ackworth) said she expects the recommendations to be drafted into a bill and in the hands of lawmakers by the first week of the 2010 session.
Some of the recommendations outlined by Culver are expected to be enacted early next week with an executive order. Other recommendations would require legislative approval, such as reorganizing correctional and mental-health facilities.
Appel said she's gone through the Public Works report twice, and there is a lot of overlap between that report and the committee recommendations. Both reports call for consolidating e-government and agency purchasing, for example.
Representative Erik Helland (R-Grimes), one of four Republicans on the commission, said he appreciates the bipartisan efforts of the group, although he would like to see a deeper examination take place at the county and municipal levels as well.
"I think there are some of us around the table that would obviously love to see a more aggressive package, but this is a starting point and we appreciate that," Helland said.
Helland said his party would pressure the majority Democrats to consider these recommendations "quick and often," although he said Democrats would call the shots on what comes to the floor and when that happens.
"But the bottom line is this is a step forward," Helland said. "It's the right direction. A number of those recommendations were recommendations the House Republicans offered last year, so I was heartened to see those in there. But the bottom line is we still need to shrink state government more."
Already the Iowa Council on Human Services has approved consolidation of nine administrative divisions into six in the Department of Human Services' central office, and consolidation of eight regional offices into five.
The major reorganization in the state's largest agency is expected to take effect in January.
Discussion Begins on Changing Revenue-Estimating Process
A member of Culver's Council of Economic Advisers has proposed replacing the state's current revenue-estimating process with a formula-driven budget limit.
Under the proposal by Jon Muller, president of Muller Consulting Inc., the state law limiting state spending to 99 percent of the December revenue estimate would be replaced with a limit based on a three-year moving average of known receipts in recent years, adjusted for inflation.
"This makes state government a counter-cyclical participant in the economy and avoids budget meltdowns," said Muller, who argued that the state could have had a $2.4-billion surplus in fiscal year 2009 if this formula-driven approach had been used.
Liesl Eathington, a census-data analyst at Iowa State University, agreed that "it's definitely time to revisit" the state's revenue forecasting and budgeting process.
But two other council members said that having such a large surplus would be a big target during the legislative session.
Culver said he'll take the idea to change the state's revenue-estimating process to the legislature when it convenes next month.
Culver wouldn't yet commit to supporting the proposal, but said the meeting accomplished his goal of having an honest discussion about ways to improve the state's revenue-estimating process.
"Perhaps this formula-driven approach that factors in three, five, or seven years will do that, but today was the first I heard about it and I'll move this concept and this idea to not only the REC [Revenue Estimating Conference] but to the legislature and we'll see if there's agreement," Culver said. "It's possible that people won't agree that that will make a difference, that this formula-driven approach will improve our ability to estimate, but we'll find out."
Addressing that idea, House Minority Leader Kraig Paulsen said: "I'm supportive of doing anything that makes our estimates and projections more accurate. I don't know whether that's the exact right solution. Maybe it will take us down the road where we do multi-year budgeting."
Economic Advisers Say Iowa on the Road to Recovery
Iowa is beginning to recover from the national recession, several members of the Governor's Council of Economic Advisers said this week.
"Iowa is in the beginning stages of recovery," said Mark Schuling, director of the Iowa Department of Revenue, pointing to how the Iowa Leading Indicators Index improved in October, ending an 18-month streak of declines. "Iowa is one of the states starting to come out of it."
Charles Whiteman, interim director of the University of Iowa's Institute for Economic Research, pointed to how Moody's Economy.com last month listed Iowa as one of 11 states emerging from the recession. "There are some signs that the turn is upon us and perhaps things are going to look up," he said.
Ann Wagner of Iowa Workforce Development agreed that "we've seen some slow improvement." She cited fewer layoffs, restored hours, and wages. She said John Deere Ottumwa Works has brought some people back to ramp up production.
"Our biggest problem is long-term joblessness," she said, noting how 113,000 remain unemployed and unemployment will remain high for a while.
Culver said the news doesn't suggest that Iowa will recover fast enough to avoid the budget challenges in the upcoming year.
"We're still going through a really tough time," Culver said. "We're not out of the woods yet. We're going to have a real challenge in terms of putting the budget together for fiscal year '11, but I've heard worse news. I think there was a general feeling that we're slowly seeing some signs of improvement and that's good news for the people of this state."
Microsoft Settlement Means Millions for Iowa Schools
Culver and others announced that Iowa schools are eligible for $60.3 million in technology vouchers through an antitrust settlement the state has reached with Microsoft.
"Starting as early as next month, eligible schools will be able to apply for these vouchers, and they will be a part of our new model core curriculum that Director [Judy] Jeffrey with the Department of Education has worked so hard on," Culver said.
The announcement was made at Capitol View Elementary School in Des Moines in front of students and members of the media. That school will be eligible for about $100,000 in vouchers to purchase hardware, software, professional development, and support to help implement the state's core curriculum.
Roxanne Conlin, the Des Moines attorney and Democratic candidate for U.S. Senate who was the co-lead counsel in the state's class-action antitrust case against Microsoft, said schools can apply to receive between $1,000 and $450,000 in vouchers.
"I'm pleased to tell Iowans who care deeply about education that more than $60 million ... of the Microsoft settlement will be distributed to Iowa schools," Conlin said. "About 1,000 schools, serving 330,000 students, will receive a portion of this amount."
Republican Party of Iowa Chair Matt Strawn challenged Conlin to donate "a substantial portion of her windfall" from the Microsoft settlement to Iowa schools.
"Roxanne Conlin got filthy rich from this case," Strawn said. "The lawyers got $75 million, and regular Iowans got, at best, 30 bucks," Strawn said.
Conlin spokesman Mark Daley said $57 million of the nearly $180-million settlement was claimed by individuals, businesses, and governments, and Conlin negotiated that half of the roughly $120 million in unclaimed funds - which would normally be returned to Microsoft - be given to Iowa schools.
Daley also said that the figure of $75 million went to the more than 100 people that billed for the seven-year case.
University Students Will Pay $100 Surcharge to Help with Budget Cuts
With no discussion, the Iowa Board of Regents voted 6-3 to approve a $100 university-student surcharge for the spring 2010 semester to restore a portion of the revenue that will be lost with the state's 10-percent across-the-board budget cut.
"This is certainly nothing I believe that any regent favors," said Regents President David Miles of West Des Moines. "We know it creates an additional burden for our students."
Student leaders who spoke at the regents' October 19 meeting said they couldn't support the tuition surcharge but understood why it was needed.
"I believe this is a regrettable but reasonable sacrifice to ask of our students in the spring semester," MIles said. "What we are asking is shared sacrifice of the 10-percent reduction. ... We tried to strike a reasonable balance and we appreciate that this will create hardships for some."
Miles said the surcharge will be included in students' regular tuition and fees. He also said the surcharge would be factored in to need-based financial packages. "While $100 is real money to all of us, it is not a large dollar figure," he said. "It is not expected to have a large impact on financial aid."
Voting in favor of the surcharge were Miles along with Rose Vasquez of Des Moines, Craig Lang of West Des Moines, Robert Downer of Iowa City, Bonnie Campbell of Des Moines, and Jack Evans of Cedar Rapids. Voting against the surcharge were Greta Johnson of LeMars, Ruth Harkin of Cumming, and Michael Gartner of Des Moines.
The Iowa Board of Regents had to cut $60 million as its share of the state's 10-percent across-the-board cut. The state's public universities will take the brunt of the regents' required cuts. The remainder will come from the regents' office, Iowa School for the Deaf, and the Iowa Braille & Sight Saving School.
The $100 student surcharge will recover about 10 percent ($6 million) of that gap. It will raise $2.4 million at Iowa State University, $2.18 million at the University of Iowa, and $1 million at the University of Northern Iowa.
A 6-percent average tuition increase for resident undergraduates at the state's public universities has been proposed for 2010-11. However, the Board of Regents deferred its vote on the proposed tuition increase until its February meeting.
Palin Book Tour Stops in Iowa
Fans lined up outside of a Sioux CIty Barnes & Noble store as early as 4 p.m. on a Saturday afternoon, braving frigid temperatures overnight in order to get a chance to meet former vice presidential candidate Sarah Palin the next day.
Palin's stop at Barnes & Noble in Southern Hills Mall was part of a nationwide book tour to promote her newly released book Going Rogue.
The book has spent the past two weeks at the top of the New York Times bestseller list, having sold more than 1 million copies in its first month on the market.
Mall officials opened the doors at 6 a.m. Sunday, allowing the crowd of around 600 people to wait inside the mall corridors away from the cold weather.
The crowd was largely made up of Republicans; however there were also independents and Democrats waiting in line.
Terri Podolanko, who described herself as a conservative, drove from Kansas City with her daughter to attend the event.
"We're just big fans, big supporters, and I wanted my daughter to have an experience of meeting someone like her," Podolanko said.
Palin arrived at the event about 90 minutes late and quickly went inside the store to begin signing autographs without stopping to talk with members of the media.
Photographers and reporters were told that they could take pictures but were not permitted to ask Palin any questions.
One reporter did, however, ask Palin, "Why Iowa?"
"Everybody wants to be in Iowa," she said.
Her visit to Iowa has fueled speculation regarding a run for the presidency in 2012.
Mary Stanley of Council Bluffs said she hopes that Palin will consider running for president. "I definitely would vote for her, she's the best" candidate, Stanley said.
Palin, however, gave no indications regarding her 2012 plans.
This weekly summary comes from IowaPolitics.com, an online government and politics news service. Reporter Andrew Duffelmeyer and other correspondents contributed to this report.
