Governor Chet Culver's proposed budget for Fiscal Year 2011 exceeds the state's 99-percent spending limitation and fails to address roughly $400 million in state costs, State Auditor David Vaudt said this week.
"He's actually spending $25 million more than the expenditure limitation, rather than the $61 million under the spending limitation that he presents in his budget document," said Vaudt, a Republican. "The governor's budget numbers just don't add up."
Culver defended his proposed budget, maintaining that it's balanced and spends less in his fourth year in office than when he began his term as governor in 2007.
"The bottom line is the budget I submitted to the legislature was smaller than the one that I inherited," Culver said in an interview with reporters. "So we are reducing the size of government, we're making it more lean, we're making it more efficient."
Vaudt said Culver's budget relies on $341 million in savings proposed by consultant Public Works of Philadelphia, but a nonpartisan analysis shows the savings will be far less. Even if all of the consultant's cost-saving recommendations are implemented, Vaudt said $83 million - or almost 25 percent - will have no impact on the state general fund.
"You can't include savings from other funds in your calculation of what you're going to save in the general fund," Vaudt said.
Vaudt declined to outline legal ramifications for violating the spending limitation in state law, although he said he'd be sharing the information with the attorney general's office. He pointed out that last year, Culver had to revise his budget proposal after there was a change in state revenues.
Vaudt said Culver's proposed budget underfunds school aid, state-worker pay raises, and unpaid leave days - which could result in property-tax increases, additional furloughs, and layoffs.
Vaudt said it would cost the state approximately $2.7 billion to fully fund the 2-percent allowable growth in school spending, but the governor only provides $2.4 billion - about $270 million short.
"There is a very good likelihood that if the schools can't do additional cuts, ... we'll see it in the form of higher property taxes," Vaudt said.
Lawmakers Work to Regulate Corporate Campaign Ads
The Iowa legislature is moving quickly to regulate corporate spending in elections following the recent U.S. Supreme Court ruling that allowed such spending, but a package of new regulations proposed by Democrats is getting a chilly response from Republicans.
"It appears on the surface to be a bill that would literally make it impossible for corporations to participate by placing onerous burdens on them," said Senate Minority Leader Paul McKinley (R-Chariton).
Democrats said Thursday that they're trying to craft the strongest campaign law in the nation regulating corporate spending.
"Iowa will continue its reputation for clean politics," said Senator Jeff Danielson (D-Cedar Falls). "We believe that transparency and disclosure equal accountability in the political process."
Danielson said the legislation is even more important given Iowa's status of having the first-in-the-nation presidential caucuses.
"We tend to be a testing ground for these new political activities. There's a lot of interest in Iowa politics," he said. "And we have to lead when it comes to strengthening our laws so that the average, everyday Iowa citizen's voice can still be heard in that process."
The bill in its final form is expected to:
- Prohibit foreign-controlled companies from playing any role in Iowa elections.
- Require board, CEO, or stockholder approval before a corporation can use funds for independent expenditures.
- Require additional reporting of receipts and independent expenditures by corporations engaged in independent campaign activities.
- Require disclaimers on advertisements paid for by corporations.
- Bar collusion by corporate donors and political candidates and prohibit them from using the same consultants, advertising firms, and campaign advisers.
Senate Majority Leader Mike Gronstal (D-Council Bluffs) said this legislation comes after Democrats consulted with Charlie Smithson, director of the Iowa Ethics & Campaign Disclosure Board, and Iowa Attorney General Tom Miller. He said the idea is to pass legislation that will withstand any legal challenge.
"The one bright spot in the Supreme Court decision was it seems to strengthen our hand in our ability to require disclosure," Gronstal said.
Bill Would End Greyhound Racing but Add Millions in State Revenue
State lawmakers say they intend to move forward with bills that would end live greyhound racing in Iowa while bringing the state millions of dollars in revenue for years to come, but dog breeders say that would bring the loss of 1,500 jobs at 150 greyhound farms across the state.
"The bill does away with our livelihood," said David Robinette of Elliott, a father of five who owns Pilot Grove dog kennel and raises about 150 greyhounds that race in Dubuque and Council Bluffs.
"Fifteen hundred jobs would be lost if this bill becomes law," said Tom Cope, a lobbyist for the Iowa Greyhound Association.
The bill, approved 12-9 by the House State Government Committee, would allow Bluffs Run Greyhound Park in Council Bluffs and Mystique, formerly called the Dubuque Greyhound Park & Casino, to maintain their gaming licenses and discontinue live dog races if they pay a "racing exemption fee."
The bill is being pushed by Harrah's Entertainment, which owns the Council Bluffs greyhound racetrack and casino. The casino giant argues that Iowa is one of only seven states that still actively race dogs, and money spent to subsidize the industry would be better spent elsewhere. The dog industry has received $140 million in purse supplements since 1995.
"It's a fact that dogs are dying all across the United States and this is just ... a false economy," said Jim Carney, a lobbyist for Harrah's. "We race 301 days a year. If you look outside and think about the weather right now, we'll have dogs running tonight around a track with no one there. We have dogs running all week - rain, snow, ice, you name it. They're out there running around the track, no one's there, no one's wagering. The wagering doesn't carry the industry. It's not supporting itself."
Carney said greyhound racetracks closed last year in Kansas, Wisconsin, Colorado, and Arizona, and in Massachusetts it was voted out by a ballot measure.
State Representative Mary Mascher (D-Iowa City), chair of the House State Government Committee, is backing the legislation despite the projected loss of jobs.
"Obviously, we want to help retrain those individuals, make sure they have employment, take care of their families, keep them here in the state. And we'll look for opportunities to do that," she said. "We talked about job retraining funds, we talked about subsidizing salaries ... until they're able to get other employment. There's a lot of other options out there. ... We will be looking for options for them. I think we owe them something."
Same-Sex-Marriage Amendment Appears Dead
An attempt by Republicans to bring a constitutional amendment banning gay marriage up for a vote in the Iowa House failed this week on a 54-45 vote. Representative Dolores Mertz (D-Ottosen) was the only Democrat to vote with Republicans.
An hour earlier, a similar effort was made in the Senate by Senate Minority Leader Paul McKinley (R-Chariton) and Senator David Johnson (R-Ocheyedan). They brought forward a discharge petition to bring the issue up for a vote, although Johnson said he regretted the petition was short of the 26 votes necessary. All 18 Senate Republicans signed the petition along with Senator Tom Hancock (D-Epworth).
With the House defeat, the issue is effectively dead this session, said House Minority Leader Kraig Paulsen (R-Hiawatha), who acknowledged beforehand that he didn't think the votes were there.
"This is it. Either there's 51 people who want to do it or there's not," Paulsen said in an interview with reporters. "There's a lot of folks who say they support traditional marriage. This is an opportunity to back those words up."
The vote wasn't as widely attended by the public as one taken last year. Former state Representative Danny Carroll (R-Grinnell), board chair of Iowa Family Policy Center Action, was in the gallery.
Iowa Family Policy Center Action spokesperson Bryan English accused House Democrats of turning their backs on the Constitution and the people of Iowa by refusing to take action on the marriage amendment.
"Democrat members will now go home and try to say that procedural votes don't matter, but nobody is buying that story any more," English said. "Members of the House have had an opportunity to reassert their proper role as lawmakers, and to reaffirm the only definition of marriage, both last session and again this morning. On both occasions, they failed to do the right thing."
Supporters of same-sex marriage visited the Capitol later in the week for One Iowa's lobby day, sharing their thoughts and some wedding cake with legislators.
Charges Filed in Film-Office Investigation
The Iowa attorney general's office on Monday filed criminal charges in Polk County District Court against former Iowa Film Office Director Thomas Wheeler and producers involved with a film called The Scientist.
"The values of the services provided to The Scientist were inflated far above fair market value as part of a scheme to obtain tax credits from the State of Iowa in excess of the amount for which this project could properly qualify," the complaint said.
The criminal complaints charge Wendy Runge and Matthias Saunders with first-degree theft for unlawfully reporting inflated values on applications for tax credits. Three related companies are also listed as defendants. First-degree theft, a Class C felony, carries a penalty of no more than 10 years in prison and a fine of up to $10,000.
Wheeler is charged with unfelonious misconduct in office for failing to verify the eligibility of an applicant for tax credits, a serious misdemeanor that carries a fine of up to $1,875. The court may also order a prison term of up to one year.
Culver Signs Early-Retirement Bill
Flanked by Democratic lawmakers, Culver signed into law an early-retirement package for state workers that he said is the first step toward reducing the size of state government.
"This is really a victory for those taxpayers, those hardworking Iowans across our state," Culver said during a bill-signing ceremony in the Iowa Capitol rotunda. "This is a $60-million step forward in our effort this legislative session to find more than $300 million in cost savings."
But State Auditor David Vaudt said more than half of those anticipated savings - about $31 million - will come from other funds and will not save the state general fund money at all. That's because certain workers who will take early retirement - in the Department of Transportation, for example - are paid from other funds.
The law aims at enticing an estimated 2,261 eligible state employees to take early retirement. Participating employees that have worked for the state for at least 10 years would receive $1,000 for each year of employment up to 25 years. They would also receive monthly health-care-premium costs over a five-year period beginning this September.
This weekly summary comes from IowaPolitics.com, an online government and politics news service. Reporter Andrew Duffelmeyer and other correspondents contributed to this report.
