Governor Chet Culver this week approved plans by 34 state agencies to cut $520 million, lay off 180 workers, and eliminate 229 vacant positions.
Culver also announced that he has asked the three labor unions for state workers to reopen contract talks in an effort to prevent the layoffs of 571 people in corrections and 54 in public safety.
Culver has withheld approving budget-cutting plans for corrections and public safety until he hears back from the unions, who have until November 6 to let Culver know if they will agree to re-open their contracts.
Culver declined to say specifically what he'll ask the unions to sacrifice. He said that if an agreement cannot be reached, the layoff plans by corrections and public safety will be approved.
AFSCME Iowa Council 61, through its bargaining chairs, announced it has agreed to meet with the governor to begin holding discussions for the sole purpose of reducing layoffs.
"We are unsure of where these talks will lead, other than to say AFSCME will do its part to consider all options that are put on the table," said Danny Homan, president of AFSCME Iowa Council 61, which represents more than 21,000 Iowans who are state-government employees.
Culver has also ordered 3,258 non-contract employees, many of whom are managers who do not belong to the union, to take seven furlough days without pay between now and the end of the fiscal year June 30.
The furloughs will save $6 million that with along with transfers and other savings will allow Culver to backfill $16 million to public health, human services, education, and college aid.
U.S. Senate Race; Christie Vilsack Out, Conlin Perhaps in
The Democratic side of the 2010 U.S. Senate race is starting to come into focus, as former First Lady Christie Vilsack announced she has decided against running, but former gubernatorial candidate Roxanne Conlin said she's strongly considering a run.
Vilsack announced in a written statement that she has decided against running for U.S. Senate next year against Senator Chuck Grassley (R-Iowa).
"Committing to a campaign for the U.S. Senate next year requires more than the confidence that I have the right experience, the necessary support, and the resources to be successful," Vilsack wrote. "It must come with an understanding that it is the best way for me serve our state and my fellow Iowans in the most effective way possible at this time."
Meanwhile a new Facebook group called "Iowans for Roxanne Conlin" was formed shortly after publication of news articles that the Des Moines attorney and 1982 Democratic gubernatorial candidate will most likely run against Grassley.
The group was formed by Mark Daley, a former spokesperson for U.S. Representative Leonard Boswell, former presidential candidate Hillary Clinton, and the Iowa Democratic Party.
Within a few days, the group had 315 members, many of them encouraging her to run.
Bob Krause, a Democrat who's already declared his intention to run, called for a series of statewide debates between all Democratic candidates hoping to challenge Grassley. The debates would be hosted by media organizations and conducted by the League of Women Voters.
"The public needs to know where each of us stands on important issues, and a series of debates is the best way achieve that," Krause said. "It is also the best available method to marginalize big money and special interests in the race. I would hate to think that money is the single most important credential that a candidate can have."
Fellow declared Democrat Tom Fiegen commended Krause for agreeing to public debates, saying that when he announced his candidacy, he too invited his primary opponents to debate.
Fiegen, a Cedar Rapids bankruptcy attorney and former state senator, also responded to a claim that Conlin's wealth could potentially help Culver's re-election effort: "That would be true if Governor Culver were not an effective fundraiser. Fortunately for Governor Culver he has demonstrated his ability to raise the resources to run a successful campaign. The best way to help Governor Culver is for the Democratic U.S. Senate candidate to be able to relate to working Iowans and offer solutions to problems they are facing."
Whoever his Democratic opponent ends up being, Grassley has a substantial bankroll ready for next year's election.
Grassley closed the third quarter with $4.4 million in his re-election campaign's bank account, according to a review of his Federal Election Commission filing. He raised $831,277 from July 1 to September 30 while reporting $268,276 in disbursements. In contrast, Krause reported raising $7,393 and spending $5,294, to finish with $3,493 cash on hand. Fiegen reported raising $2,541 while spending $3,262 and banking $519.
State Prepping Challenge to Film Tax Credits
The State of Iowa is reviewing all $32 million in tax credits awarded through the state's film-tax-credit program, Eric Tabor, chief of staff in the Iowa attorney general's office, told the legislature's Government Oversight Committee this week.
"The reality here is that there's millions of dollars at stake at a time when the state is broke and the legislature and governor and all of us are trying to figure out how to deal with budget shortfalls," Tabor said.
The attorney general's office has both a criminal and civil investigation into the film-tax-credit program along with the state auditor, Polk County attorney, and Division of Criminal Investigation.
"Clearly, this is a very important, complicated, and difficult matter. Part of that difficulty is the incredibly poor record-keeping that was kept down at the film office," Tabor said. "We're trying to piece the thing together and really doing the best we can to unravel what can be called a complete mess."
Tabor outlined what went wrong in the film office and ways state law was ignored or inappropriately applied:
- Poor documentation of expenditures.
- Requirements that payments be made to Iowa residents or businesses were skirted.
- The percentage applied to investment tax credits was too large.
- The requirement that the Iowa Department of Economic Development ensure that a film project's economic impact justified it being awarded tax credits "was largely ignored."
The chairs of the committee said they don't want to be too quick to judge the program, noting that the program has done some good for economic development.
"I know there are businesses that were created. I know that there were people who got jobs. So you hate to see that end entirely," said Representative Vicki Lensing (D-Iowa City). "But it looks like there was a breakdown in how the system was supposed to work, so we need to look at that and fix it."
Senator Rich Olive (D-Story City) said that if the program did not do some good at creating well-paid jobs, stimulating tourism and the economy, "then we eliminate the program altogether." He said it's important to protect taxpayer dollars and challenge any tax credits awarded inappropriately. But he said his personal view is that the idea was a good one.
"Obviously, we needed to do a better job of accounting and working through these credits and making sure that the ones we're awarding were appropriate," Olive said. "I would like to see it continue. I thought it created some tourism in Iowa and created some jobs. In some form, I would like to see some film tax credits continue."
Ethics Committee Considers Changes to Lobbyist Reporting Rules
In the wake of a complaint against the Iowa Pharmacy Association for filing a late disclosure report, the Iowa House chief clerk's office plans to identify other lobbyists who have filed late reports, and letters will also be sent to them notifying them that it's a violation of state rule and law.
According to Iowa Citizens for Community Improvement (CCI), which filed the ethics complaint against the Iowa Pharmacy Association, 26 disclosure reports for legislative receptions of the 90 filed this year were late.
Legislative lobbyist reports that are delinquent in the future would automatically be identified and listed on a separate Web page, like a "Scarlet Letter" of sorts, under a proposal offered by the House chief clerk's office and expected to be offered as legislation in January.
"We think, to a large extent, that this will force compliance," said Iowa House Chief Clerk Mark Brandsgard. "No one wants an ethics complaint against them."
Adam Mason, state policy organizing director for Iowa CCI, said he was pleased and vindicated by the committee's actions.
"CCI members have kept their eye on who's trying to buy influence, who's trying to gain extra access to our lawmakers," Mason said. "Filing the complaint was the step that forced the House Ethics Committee to review this."
Mason said he didn't think receptions for legislators should by done away with altogether, but said the $3 gift rule for lawmakers is out-of-date and doesn't even buy a cup of coffee.
"We don't expect these lobbyist functions to go away," Mason said. "What we do want to make sure of is that Iowans to have access to the information, so we know who's trying to gain access and influence. When lobbyists ... are holding these large functions, Iowans deserve to know how much they're spending wining and dining our legislators."
The Iowa House Ethics Committee agreed that a complaint against the Iowa Pharmacy Association for filing a disclosure report about a legislative reception five months late was valid, but declined to hire an independent counsel to further look into the matter.
"It seems like a waste of our taxpayer money to appoint a special counsel when both sides agree there's been a violation," said Representative Eric Palmer (D-Oskaloosa), who's an attorney.
The Iowa Senate Ethics Committee voted 5-0 in September to take no further action on the same complaint, but promised to improve such filing early in the 2010 legislative session. Representative Scott Raecker (R-Urbandale) said efforts should be made to get the House and Senate on the same page on rules surrounding lobbyist reporting.
Universities Spread Cut Impact
Iowa's public universities will cut nearly $57 million from their budgets by reducing contributions to employees' retirement plans, charging students an extra $100 next spring, and, in some cases, requiring employees to take furloughs.
The Iowa Board of Regents on Thursday approved the universities' plans to meet a 10-percent budget cut required for all state agencies for the fiscal year ending June 30.
"I believe our institution heads have worked very hard to share these budget cuts across the divisions of their universities," Regents President David Miles said. "I don't favor adding an $100 surcharge, but neither do I favor other options. These are challenging times. It seems like a reasonable balancing."
The regents narrowly approved the mid-year tuition surcharge but decided to wait until December to discuss a proposed 6-percent average tuition increase for resident undergraduates attending the state schools in 2010-11.
Budget reductions approved Thursday will likely increase class sizes, reduce students' contact with professors, and eliminate new technology and programs that had been planned with federal economic-stimulus money, the presidents said.
Student leaders who spoke at the meeting said they couldn't support the tuition surcharge but understood why it was needed. The surcharge is expected to generate nearly $5.6 million, or about 10 percent of the overall budget cut to the state universities.
"One-hundred dollars is not exactly pocket change," said Jonathan Turk, president of Iowa State University's student government. "It's $100 toward books, rent, or food. Please remember the ramifications of taxing students, especially during the middle of the year."
University employees had mixed views about furloughs and reduced retirement contributions.
Iowa State and the University of Northern Iowa will require furloughs on a graduated scale, meaning more unpaid leave for higher-paid employees. The University of Iowa considered a similar option but decided against it, President Sally Mason said. The U of I had $13 million from the American Recovery & Reinvestment Act that will make up the bulk of the cut. That federal economic-stimulus money had been planned for a grant program that would have funded projects to improve education and save money on the Iowa City campus, Mason said.
"We tried to not have layoffs and keep money in people's pockets," Mason said.
The universities will save a combined $6.85 million by temporarily reducing their contributions to employees' retirement packages. The U of I and UNI would extend the benefit cut through June 30, 2011, but ISU will limit the reduction in benefits to the next eight months. Any longer would hurt faculty recruitment, President Gregory Geoffroy said.
"Our salaries are at the very bottom of our peers," Geoffroy said. "If we reduce our benefits permanently, at the level suggested earlier, it makes us horribly uncompetitive."
ISU Faculty Senate President Arnold van der Valk said the benefits reduction has been "universally condemned" on the Ames campus, but the faculty group reluctantly supports the furloughs. Both ISU and UNI will need to work with employee unions to execute the furloughs.
IowaPolitics.coom Forum Addresses Budget Issues
Victor Elias of the Iowa Fiscal Partnership said Thursday that raising taxes on high-income earners would have less of a detrimental affect on the economy than cutting state services.
"The conventional wisdom, which is often wrong, is that you don't raise taxes during a recession," Elias said. "That may be true for the federal government, but [it's] state governments that provide the safety net, that provide the needed public services, that need to balance their budget every year."
Elias joined State Auditor David Vaudt and Ed Wallace, president of the Iowa Taxpayers' Association, for an IowaPolitics.com forum on budget and tax issues at Drake University Thursday morning.
Vaudt said the 10-percent across-the-board cut implemented by Culver will effectively result in a property-tax increase at the local level.
"I would also say that even though the governor says he's not going to increase taxes, you have to look at what the impacts of these cuts will do," Vaudt said. "Those cuts will be pushed down to local government, those cities, counties, and school districts, and property taxes will rise."
All three panelists agreed that state government needs to look at reorganizing to save money, including consolidating local governments and school districts.
Wallace said Iowa is behind the curve when it comes to combining services over the state's 947 municipalities, 361 school districts, and 99 counties.
"The math doesn't add up," Wallace said. "We've got layers and layers of government that has an opportunity right now, under the proper leadership, to look at reorganizing, merging services, doing things that would reduce duplication."
Vaudt said the Revenue Estimating Conference predicted in March that revenue estimates for the following three months would be $161 million below initial projections, something that should have raised more alarm.
"If you looked out to what everybody was experiencing across this nation and you listen to the economists, the writing was on the wall and we intended to ignore it," Vaudt said.
Vaudt, Wallace, and Elias agreed that the state must begin planning the budget long-term to avoid future across-the-board cuts.
"The last thing you want to do in a down time like this is cut services when your citizens need them the most," Vaudt said. "It's the biggest demand we're ever having for those services, and now we have to cut back because we're not thinking long term."
Elias emphasized a need to review the state's tax credits and look at the state's revenues, as well as its spending. He said the state must make sure all tax credits are bringing in jobs that wouldn't have otherwise come to the state.
But Wallace said the state should be cautious not to eliminate effective tax credits in response to apparent mismanagement of tax credits in the Iowa Film Office.
The forum will be broadcast on the Mediacom Connections channel statewide and available for On Demand viewing on Mediacom Channel 1.
This weekly summary comes from IowaPolitics.com, an online government and politics news service. IowaPolitics.com staff contributed to this report.
