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Elections have consequences. Much like the federal government, Iowa republicans now control the executive and legislative branches. And, as the doors of the State Capitol stand open, a new chapter in Iowa government begins today at the Governor's Condition of the State Address.

(music)

Dean Borg: This is the House of Representatives at the Iowa Statehouse where the newly convened Iowa legislature, members of the House and Senate, are gathered to hear Governor Terry Branstad assess the condition of the state. Hello, I'm Dean Borg. This is Governor Branstad's 22nd Condition of the State Address, but likely the final one in his tenure as the longest serving Governor of any state ever in the history of our nation. Governor Branstad's appointment to be U.S. Ambassador to China is awaiting U.S. Senate confirmation now in the coming weeks or even months. Governor Branstad is coming to this newly convened 87th Iowa General Assembly with his fellow republicans holding majorities in both the House and the Senate. 20 years since republicans controlled the legislature and the executive branch simultaneously and Governor Branstad was Governor then too. We'll be listening for indications on how the Governor suggests using that political advantage, leverage if you will, and the agenda that he'll be leaving for Lieutenant Governor Kim Reynolds when, as expected, he leaves for the U.S. Embassy in Beijing, China. What's on the Governor's immediate agenda, eliminating some $100 million from the current state budget, state tax revenues not living up to expectations of a year ago somewhat because of bruising agricultural economy. That also means this legislature is likely to be very frugal during this session and crafting next year's state budget. Mr. Branstad already has said that Iowa's current economy won't be supporting taxes, that is cutting taxes, but legislators may have their own ideas and at least tinkering with taxes they're not controlling in both the House and the Senate. Whether the Governor mentions these items in this address, republicans are expected to be considering contentious modifications in the law concerning collective bargaining for the state's public employee union and also how the state funds its K-12 public schools and state universities and the Medicaid program now being managed by private companies. And, of course, there will be state budget cuts and the legislature will be weighing in on them too. What we're seeing now on the floor of the House of Representatives where the members of the Senate and the House are now convened in joint session are the dignitaries who will be ushered in here to listen to the Condition of the State Address. We'll listen now to the Sergeant at Arms as he announces the arrival.

--- Chief Justices and the Justices of the Supreme Court --

Borg: That's the Sergeant at Arms, Don Wederquist and he'll be presiding here until we actually see the Governor at the lectern.

(applause)

Borg: The Governor himself, as we've said, is making his 22nd Condition of the State Address here, but actually he is no stranger at all to this House of Representatives Chamber because he was a representative from Winnebago County before moving on to Lieutenant Governor. And there is the current Lieutenant Governor, of course, Kim Reynolds. She is waiting in the outer door there. She next year will be making this Condition of the State Address if all goes as expected and Governor Branstad is confirmed as the Ambassador to China. She is now being ushered down into what we call the well, that is the area just in front of the lectern where Governor Branstad eventually will be delivering the address. There's Chris Branstad being entered in.

(Sergeant at Arms announcement)

Please escort Governor Branstad's family to their seats.

(applause)

Borg: Chris Branstad outfitted in bright red. The Branstad family following in behind her going down to join Kim Reynolds in the well just in front of the lectern, the rostrum, along with members of the Iowa Supreme Court and the Court of Appeals who are already there.

The joint convention will be in order. The chair recognizes sergeant at arms.

Mr. President -- the Governor has arrived.

The committee will escort the Honorable Terry E. Branstad to the rostrum.

(applause)

Borg: That committee that they refer to is a committee composed of both House and Senate members who were appointed to go one floor below here at the State Capitol, receive the Governor in his office and escort him up here to the House of Representatives chamber. The Governor now approaching the rostrum and he will be introduced by the President of the Senate Jack Whitver of Ankeny.

(applause)

It is an honor and my privilege to introduce the longest serving Governor in the history of the United States and the great Governor of Iowa Terry Branstad for his Condition of the State message to the 2017 session of the 87th General Assembly.

(applause)

Governor Branstad: Madam Lieutenant Governor, Mr. Speaker, Madam Speaker -- let me start over again here -- Madam Lieutenant Governor, Mr. President, Madam Speaker, legislative leaders, legislators, justices and judges, elected officials, distinguished guests, family, friends and fellow Iowans, I'm honored and humbled to once again address a joint session of the General Assembly delivering the Condition of the State for the final time as your Governor. For 22 years I have addressed this body as Governor and today I want to especially welcome the 22 new legislators who are with us from both sides of the aisle who were elected in November. Your constituents sent you to work hard, to work for them and to help make Iowa a better place. I hope you're filled with the same sense of excitement and eagerness I had when I first served in the legislature in 1973. Lieutenant Governor Reynolds and I look forward to working with each of you and listening to your ideas on how to make our state an even better place for families to live, work and grow. In that spirit, I am today extending an invitation to each legislator to meet with me personally during this legislative session.

Governor Branstad: We also gather again with shared sadness, returning to do our work without our friend, Senator Joe Seng from Davenport. Joe was a devout Catholic and a true statesman. We enjoyed his contagious and positive personality and working with him.

(applause)

(applause)

Governor Branstad: As I look back at my years of public service, I'm thankful to those Iowans who have stepped forward to serve their fellow citizens. In particular, please join me in applauding those Iowans who have helped make our state and nation safer by serving in the military, law enforcement and first responders.

(applause)

(applause)

Governor Branstad: Since taking office in 2011, we have made the necessary changes to strengthen our economy and improve the quality of life across our state. We made tough decisions to give Iowans a smaller and smarter government. We have stayed the course with an unwavering commitment to create jobs, increase family incomes, reduce the size of government and give Iowa students a globally competitive education. We provided significant tax relief for Iowans the past five years, especially for commercial property taxpayers. And last month Lieutenant Governor Reynolds and leaders of the Economic Development Authority and the Department of Transportation unveiled Iowa's most comprehensive energy plan. The plan was developed with collaboration from the private sector, the public sector, educators, non-profits and utilities. Iowa is already a leader in low cost and renewable energy, the comprehensive new energy plan will help build on our past energy successes and reaffirms our commitment to maintaining Iowa's energy leadership for the future.

(applause)

Governor Branstad: I'm proud we have made government smaller and smarter. Our unemployment in the state has dropped from 6.2% to 3.8%. The state has helped attract $13.5 billion in private sector capital investments, which have translated to great paying jobs across Iowa. And more Iowans have been employed these past few years than any other period in our state's history. We've also made the tough decisions to ensure government lives within its means like Iowa families must do. We've accomplished this with a relentless focus on fiscal discipline, demanding budget predictability, fully restoring our Iowa reserve accounts and reducing the state's debt liability. Together we have made progress towards our goal of restoring Iowa schools to best in the nation through a series of landmark reforms and innovative policies. To improve Iowa's education standing, we needed to make sure more is done to help our hardworking teachers make sure they have the tools necessary to succeed given higher expectations for all students. So we created the new Teacher Leadership System that better utilizes the expertise of top teachers to improve education, instruction and foster collaboration. I'm proud to say that every public school in Iowa today is participating in the Teacher Leadership System. To ensure that our children are prepared for the 21st century we advanced a nationally recognized STEM initiative that gives students the confidence and skills for rewarding careers. The STEM initiative is led by Lieutenant Governor Kim Reynolds and Kemin Industries President & CEO Dr. Chris Nelson and has seen outstanding growth and success. Sustaining these measures over time is critical to get the right results for our students and our state. The ability of Iowans to overcome challenges bolsters my optimism about our state's future. When faced with challenges, Iowans consistently seek opportunities. Some of the challenges that we have overcome, like the Farm Crisis of the 1980s, tore at the very fabric of our communities. In the 1980s, Bloomfield, Iowa, a community in Davis County in southeast Iowa, struggled like many other communities across the state. An uninsured bank in Bloomfield closed in 1983 and caused great loss for area families and businesses and area farmers were straddled with debt and limited market opportunities for their crops. However, through a persistent focus on economic diversification and an entrepreneurial spirit to rebuild its community, Bloomfield now has new manufacturers that are growing alongside innovative startups. And to continue their effort to stay on the cutting edge, communities leaders are instituting aggressive strategies to become Iowa's first energy independent community by the year 2030. I visited Bloomfield last year and was impressed with their Main Street revitalization, a new hardware store, an M3 Fabrication manufacturing plant. And Woodbine, Iowa is another example of a community that took its future into its own hands. The community showed how an integrated approach to community revitalization that focuses on historical preservation and community sustainability can redefine a struggling, small rural community. Woodbine also had a bank close in the 1980s. But the community turned its challenge into future growth and diversification. Lieutenant Governor Reynolds and I visited Woodbine and were impressed with the success of their Main Street program. And Waterloo, Iowa, after experiencing economic challenges throughout the previous three decades, embraced the challenge of reshaping its industrial heritage to succeed in modern times. Cedar Valley Tech Works has made Waterloo a nationally recognized leader for manufacturing innovation. And John Deere continues to be a leading manufacturer and innovator in Waterloo. In the balcony today are leaders from Bloomfield, Woodbine and Waterloo. Please join me in congratulating them on their accomplishments and supporting their future success.

(applause)

Governor Branstad: Iowa's industries are increasingly high tech, including advanced manufacturing. In total, Iowa has over 6,100 manufacturers that contribute over $31 billion to Iowa's economy and employ over 200,000 Iowans. Over the next year, the Iowa Economic Development Authority will work with Iowa manufacturers to advance a year of manufacturing to help grow this important part of Iowa's economy. We should also be proud that Iowa remains an agriculture powerhouse that feeds and fuels the world, thanks to the hard work and innovation of Iowa's farmers and agriculture producers. We just set an all-time record for ethanol production. We set a new record for biodiesel production by adding an additional 55 million gallons. And we lead the nation in the percentage of electricity generated by wind. We now generated over 35 percent of our electricity from wind and we expect that number to exceed 40 percent by the year 2020.

(applause)

Governor Branstad: We love wind. Over the past 30 years, we've significantly added value to our agricultural commodities. We've diversified the Iowa economy by expanding exports and supporting growth in biofuels, wind energy, data centers, fertilizer plants, biorenewable chemicals, advanced manufacturing, insurance and financial services. These newer industries employ hundreds of thousands of Iowans in rewarding careers. And while I'm pleased with this progress and optimistic about our future, I believe there is more work to be done. We must seize the opportunity that is before us. This new General Assembly brings new dynamics, new expectations and new opportunities to deliver positive results for Iowans.

(applause)

Governor Branstad: Our state is in an admirable position. Many states are strapped with crushing debt, poor credit ratings and a bleak economic outlook. But Iowa is a shining example of what hard work and smart, tough choices can do for growing business and nurturing families. While the December revenue estimate is lower than previous projections, the estimate still shows a modest increase in state revenues. Although we faced a headwind out of Washington, D.C. that is stifling our agricultural economy, we still have positive revenue growth. But we must proceed with caution and not repeat the mistakes of the past. With that prudence in mind, I present my proposed adjustments to the current fiscal year budget to you today. These adjustments are required by law. My proposal does not include across-the-board cuts, does not reduce funding for K-12 education, does not reduce property tax credits and does not include furloughs of state employees. The budget reductions I'm recommending for this fiscal year are difficult. But they maintain our funding -- they do maintain funding for mutual priorities. I'm committed to working with legislative leaders and with all of you to implement these adjustments. For the coming biennium, I am presenting a complete two-year budget that is balanced each year and meets our five-year projections for a sustainable future. This budget is based on the principles laid out by the Iowa Taxpayers Association. It prioritizes education, health care, economic development and public safety and it redirects family planning money to organizations that focus on providing health care for women and eliminates taxpayer funding for organizations that perform abortions.

(applause)

Governor Branstad: On my first trip to China in 1984, I learned that the Chinese word for danger and opportunity is one in the same. Today, America and Iowa exist in a challenging world. We must seize the opportunity to make it a better place. In 2010, Lieutenant Governor Reynolds and I promised to reduce the size and scope of government. I'm proud to report that we do have a smaller, smarter government with a steady focus on improving services for our citizens in a more timely and efficient manner. Yet, while the size of government is smaller, the benefits for public employees at the state and local level have increased. Unfortunately, the cost of these benefits have grown dramatically. Because of our antiquated collective bargaining system that has led to over 500 health care plans, many of which are inefficient and way too costly, for public employees and Iowa taxpayers. Under our present system, just a few adverse health outcomes can destroy the budget of a city, county or school district. By replacing this system with one comprehensive statewide contract we can spread the risk and dramatically reduce the costs. Using a uniform health care benefits system similar to the IPERS program for retirement we can provide quality health care at a significantly lower cost and give local governments more flexibility to provide better wages and meet other needs. The statewide health care contract also needs to reward employees who take ownership of their own health by conducting health risk assessments and taking actions to improve their own health. We have made a commitment to examine each and every dollar of revenue and expenditure in order to maximize efficiency and respect our hardworking taxpayers. We are committed to a smaller and smarter government that seeks innovative ways to provide services rather than blind adherence to the way things have always been done. I'm asking this General Assembly to take a comprehensive review of all of Iowa's state boards and commissions to address unnecessary barriers that prevent competition and raise costs. I encourage you to ask the tough questions that challenge the status quo.

(applause)

Governor Branstad: In Iowa, 90% of our general fund budget is spent on three items, K-12 education, Medicaid and employee wages and benefits. The state has significantly increased funding for education since 2011 amounting to over $654 million additional dollars. Education and job training are the foundation for our future economic growth. Growing our state's talent pipeline needs to be a top priority, even with modest revenue growth. My recommendations include an increase of $78.8 million for K-12 education for fiscal year 2018 and an additional $63.5 million for fiscal year 2019, which equates to roughly 2 percent growth each year. So this year, let's show Iowans we can make these decisions early and meet the legal requirements of setting supplemental state aid for fiscal years 2018 and 2019 in the first 30 days.

(applause)

Governor Branstad: The second big driver in the state's budget is health and human services spending. Together we have transformed our mental health system to a community-based model. We have obtained a federal waiver for our Iowa Health and Wellness Plan which has reduced charity care for Iowa hospitals, and like 39 other states, we have modernized our Medicaid program. As a result, we have created a new system where more Iowans have access to mental health services closer to home than ever before, more Iowans have health insurance than ever before and more than 80 new value-added services are now being offered under our modernized Medicaid program. We've also replaced the old Medicaid system with a coordinated team of health care professionals to ensure that patients see the right provider at the right time. As a result of these reforms and innovation we have improved the focus on health outcomes and saved taxpayers $110 million. Our increase in education funding last year was made possible because of our modernized Medicaid efforts. Without these vital reforms the budget choices before us today would be twice as hard. In order to grow Iowa we must also look at policies and reforms that will continue growing family incomes. One way to do that is to close the skills gap, which in many ways is the biggest challenge facing us in the next decade. That's why Lieutenant Governor Reynolds and I set the Future Ready Iowa goal that 70% of Iowa's workforce should have education and training beyond high school by the year 2025. Today, less than half the workforce has that. Accomplishing this ambitious goal will create unprecedented opportunities for Iowans and better position our state to compete in the increasingly knowledge-based digital economy. That's why we established the Future Ready Iowa Alliance, which is co-chaired by Lieutenant Governor Reynolds and Dan Houston from Principal. And they will be making recommendations by October 31, 2017 to assure that more Iowans have the careers they deserve and employers can hire the skilled workers they need to grow and innovate. Even with a tight budget we should continue to prioritize initiatives that will grow Iowa's talent pipeline, like the STEM initiative, registered apprenticeships and work-based learning for Iowa students. Please help me recognize students who are here today from Jackson Elementary School in Des Moines, Bondurant-Farrar Middle School and Waukee High School, which has one of the premier work-based learning programs in the state.

(applause)

Governor Branstad: The students in the gallery represent children from across Iowa who are counting on all of us to modernize the schools for the 21st century. That's why Lieutenant Governor Reynolds and I launched the comprehensive computer science initiative. We're encouraging every high school to offer at least one high quality computer science course, every middle school to provide exploratory computer science and every elementary school to provide an introduction to computer science. All students need to learn how computers operate because it is fundamental to their life and work. Computer science will provide students a chance to join one of the fastest growing and best paying fields. No student should miss out on this opportunity because of where they live. This is another step to better align education and training with essential workforce needs.

Governor Branstad: We all care deeply about the safety of our families, our friends and our neighbors. However, a troubling trend has begun to emerge that threatens Iowa's safety on our roads. Traffic deaths were 315 in 2015 but jumped to 402 in 2016. That is unacceptable. Earlier this year I called on the Department of Public Safety and the Governor’s Traffic Safety Bureau to lead a working group to study this disturbing trend. The group, with the support of key stakeholders, including law enforcement, made recommendations that are worth your consideration. I'm asking you to take a hard look at these recommendations and evaluate which can be put into law to make our roads safer. Unfortunately, too many innocent bicyclists, motorcyclists, pedestrians and passengers have lost their lives on our roads. Last year I received a handwritten note from Christine and Darrel Harken, parents of Grace Harken, who live near Riceville. They wrote, "Our daughter Gracie's life was so sadly ended on July 29, 2015 by someone who was driving and texting. Grace was biking safely and lawfully during a morning bike ride when a driver who was texting struck and killed her." They went on to write, "Grace would have forgiven the driver and moved forward. That is what we have chosen to do. But we miss her so." Grace Harken's life was tragically ended way too early. Modern technology should come with new responsibilities. I ask all Iowans to join the Iowa law enforcement community, first responders, the League of Cities, all of our major cell phone carriers, the insurance industry and the medical community in demanding real change in the laws for distracted and impaired drivers.

(applause)

Governor Branstad: Last year I called on the legislature to send me a water quality improvement bill. I was pleased with the bipartisan progress made on this front here in the House of Representatives with the passage of House File 2541 last session. This bill was approved by the Agriculture, Ways and Means and Appropriations Committees and passed with 65 votes. This bill provided long-term, dedicated growing source of revenue to help implement projects to improve habitat and water quality directed by the Iowa Nutrient Reduction Strategy. The bill provided funding for community conservation practices and improvements for wastewater and drinking water facilities. By leading on this issue together we have the opportunity to modernize Iowa's agricultural infrastructure, create jobs in rural Iowa and promote collaboration between urban and rural communities. I believe our discussion should begin with the House-passed bill from last session. I hope we can work together to perfect and improve the legislation that will provide a long-term dedicated growing source of revenue for water quality improvements.

(applause)

Governor Branstad: I have been so blessed to serve as your Governor, serving the state I love for 22 years. I'm confident Iowa will continue to move forward because Iowans care deeply about their neighbors, their communities and creating an even better future. I'm extremely thankful for perhaps the most patient person in the state, my wife Chris, as she has served as First Lady with grace, she has welcomed Iowans and visitors from around the world to Terrace Hill and she has volunteered to help in many ways, including reading to students from Jackson Elementary School. She, Chris, and my entire family, thank you for your sacrifice during my time of public service. Thank you very much.

(applause)

Governor Branstad: Chris told me she felt bad about missing out on reading with first graders from Jackson Elementary this morning, but honey, I appreciate you being here. I am also thankful for the friendships that we have made in all 99 counties, friendships that we will always cherish. And I am grateful for the prayers from Iowans that have encouraged me along the way. There is no better job in the world than being Governor of the state that you love. But sometimes we're called to serve in ways that we never imagined. As I approach the U.S. Senate confirmation process, my priority continues to be serving the people of Iowa with the same energy and passion that I brought to this office each and every day. Thank you. God Bless You and all the people of Iowa.

(applause)

Borg: An embrace with the House Speaker Linda Upmeyer from Clear Lake and shakes with others there on the lectern. Governor Branstad concludes this 22nd Condition of the State Address, unprecedented for any Governor in the United States. Standing ovation here in a joint session of the Iowa House and Senate. Governor Branstad I think emotionally moved as he looks out over the standing ovation applause.

Will the committee please come forward and escort Governor Branstad and his family from the House chamber.

Borg: And so the formalities continue. Governor Branstad now going to be escorted back to his office here at the State Capitol one floor below this House chamber, passing now and shaking the hands of members of the Iowa Supreme Court and the Iowa Court of Appeals as he leaves the chamber, soon to be down to the area where his wife, Chris Branstad, and Lieutenant Governor Kim Reynolds are standing. His son-in-law, daughter embracing, there's Chris Branstad, a kiss. There's an embrace for Lieutenant Governor Kim Reynolds who will be up there on the rostrum next year delivering this Condition of the State message. The Governor exiting the chamber, handshakes with many people reaching over into the aisle, shake his hand and walks from this chamber where he came as a freshman legislator from Leland, Iowa and now is completing this term as Governor of the state of Iowa, longer than any other in the United States.

Borg: The Governor significantly mentioned Lieutenant Governor Kim Reynolds countless times in that address and I don't think that was an accident. That was to imply that Lieutenant Governor Kim Reynolds has been by his side almost constantly during these terms as she has been Lieutenant Governor and also highlighting the fact that she has been involved in the initiatives that he was mentioning here and I think that was by design to indicate that this is going to be a seamless transition as she takes the helm and also to give her the credibility of taking over as Governor of the state of Iowa. Standing applause many times throughout this Condition of the State Address. Once, with a chuckle, he said after getting standing applause, about Iowa now getting 35% of its energy from wind, he said, we love wind in Iowa. The Governor adding that as an ad lib in his speech. Significantly, he is again pushing for that water quality bill that made it through the Iowa House of Representatives last year and in a briefing this morning for members of the media we were told that the Governor still continues to push for better control of what goes into Iowa's farm drainage tiles and ultimately into Iowa rivers. That is called the Iowa Nutrient Reduction Strategy. Significantly too I thought, he did not in this address, as has been the case with not only Governor Branstad in the past, but other governors, who have not specifically mentioned controversial issues in this Condition of the State Address. But this time he was right out front in talking about revising collective bargaining with state employees to negotiate a statewide health insurance contract to better spread the risk over a larger pool of employees in the state, advocating also tougher penalties for drivers who hit pedestrians and bike riders, redirecting, again, controversial here, redirecting family planning tax money away, as he said, from organizations providing abortions. Not often would things like that be mentioned in a Condition of the State Address. We're going to be talking in just a moment here with two people in the Iowa Senate who are going to be instrumental in seeing how these proposals that we heard here in the Governor's Condition of the State Address, how the make it through the Iowa legislature. You have to understand that what we hear and what was being proposed, and this is the budget book and the Governor's Condition of the State message that was distributed this morning by the Governor's Office, this is only the executive branch and its proposals. Then that has to go through the Iowa legislative process.

Borg: Now, here is Rob Hogg, who is going to have a lot to say about what happens, even though the democrats no longer control the Iowa Senate, you're going to have a lot to say about how at least you project these things to the people of Iowa. First of all, Senator Hogg, as you control the minority democrats now, or at least lead them, not control but lead the minority democrats in the Iowa Senate, what is the thing that you heard in the Governor's Condition of the State message this morning and the proposals on which you have been briefed that maybe have more detail in them, what is the thing that encourages you the most?

Rob Hogg: Two things, Dean. And I will tell you we haven't gotten very much briefing yet. But the two things I thought were positive were his call for traffic safety, that's a very big issue and I hope we can have a bipartisan response on that. And second, on water quality. I think we can make a lot of progress on that, especially as we transition from Governor Branstad to Governor Reynolds at some point during this session. I think we'll be able to work with them and make progress on water quality.

Borg: Is that significant that you said as we transition to Lieutenant Governor Reynolds and not Governor Branstad? What is the significance of mentioning that?

Hogg: I just think Lieutenant Governor Reynolds is going to start with an opportunity to define herself and distinguish herself and water quality is an issue where I think she might be better positioned to get things done than Governor Branstad has been because he has vetoed a lot of clean water initiatives over the last six years and it's not credible coming from him. I think she has a fresh start there.

Borg: This passed last year in the House and then came to the Senate and died here, if I remember correctly. So you're saying that it may get a better reception in the Senate this year from democrats?

Hogg: Yeah, well I think she's got a fresh opportunity and there's a fresh opportunity this year. Look, last year they were scooping money from all over the place, they didn't have any accountability measures in it, it was not the water quality solution we need. But we're going to work on that and I'm hopeful that's a bipartisan area we can have success. The big thing today, Dean, is the budget cuts that he's making mid-year. And that's the biggest concern democrats have --

Borg: But required by state law.

Hogg: Well, so here's the deal. Number one, it doesn't add up. He says we've got smaller government, a better economy, so why are we doing this $100 plus million cut mid-year? It's because what he said isn't true about our economy. People's incomes have not gone up like he promised they would and our economy is being outperformed by other states now. We're lagging behind other states. So that's part of the answer. Second, I know he didn't want to talk about the bad news in his speech, but there's going to be bad news. That wasn't very transparent. We need to see what the details on the bad news are.

Borg: Let's go further on the bad news, bad news where?

Hogg: We're very concerned about what this is going to do to public safety. He talked about public safety going forward but this $113 million in the middle of the year is a major mid-year cut and so that money has got to come from somewhere. We're very worried about what it's going to do to higher education, our universities and our community colleges.

Borg: Because although K-12 is immune, he's not going to cut K-12, you're saying that the state universities may take some cuts?

Hogg: He's going to have to get the money from somewhere. And let's say it's $25 million out of our universities. That's $400 per student in our university system. So we're talking about really big cuts in the middle of a budget year and his staff said this morning these cuts are going to be permanent cuts. So we have real concerns about that and Iowans need to pay attention and speak up.

Borg: Your colleague here in the Senate is Bill Dix. He has joined us now. Thank you, Senator Dix, for coming up. You are from Butler County in northeast Iowa. Talking about the transition now to Lieutenant Governor Reynolds later on in this session and Senator Hogg says he believes that can be a seamless transition and Governor Branstad may be carrying some baggage, particularly on water quality, that Lieutenant Governor Reynolds won't have.

Bill Dix: I certainly look forward to working with Lieutenant Governor Reynolds. I think she's demonstrated in her teamwork with Governor Branstad over the last several years that she is clearly capable and ready to lead our state and when that transition takes place I expect it to be a seamless one and one that we're ready to go to work.

Borg: But on water quality specifically then, I appreciate the overview you've just given about the transition, but on water quality specifically, do you think that has a better reception now in the Iowa Senate? It didn't get a good reception last year.

Dix: We'll look at whatever proposals they put forward and there's a process in place that I see moving forward positively and I see no reason one way or the other, things are going to work well.

Borg: What disappointed you the most about the Condition of the State message this morning and the briefing that you've had on other details that weren't in the speech?

Dix: Nothing comes to my mind as far as a disappointment, Dean. I think Governor Branstad had clearly laid out an agenda that is one we're ready to go to work on. We also have our priorities as Iowa Senate republicans that we intend to move forward with as well. But this is a great starting point. The Governor is optimistic about the future of Iowa and so are we.

Borg: But, back to my question, what is going to have the toughest sledding in the Iowa legislature, maybe specifically the Senate, where you are leading the majority republicans? What is going to have the toughest sledding of which you've heard?

Dix: Sure. I think it's too early to tell what those are. We need to get the details of what the Governor is proposing. Right now clearly he has Iowans' best interests at heart and we're going to go over the weekend to work with him.

Borg: Can you move toward a biennial budget, I'll ask you first Senator Dix, and then Senator Hogg? That is what he's proposing, a complete two-year budget. Up to now the legislature is having trouble coming up with even an annual budget.

Dix: Sure. I think as long as we are conservative in our revenue estimates and are thoughtful as we pursue that, that the goal and the principle of that makes perfect sense. It allows for more thoughtful long-term planning and that is a concept that we embrace and we look forward to working with the Governor to accomplish as much there as we possibly can.

Borg: Senator Hogg?

Hogg: Well, obviously we have the concern about a big transfer of power from the legislature to the Governor's branch because once you make that two-year budget it takes away the legislature's ability for the checks and balances in the second year. But if that's what House and Senate republicans want to do and just sort of seat that authority to the executive branch they can make that decision and do that. That's not something we have favored the last six years when Senate democrats have been in charge and that's why, because we think it's important to have that annual review.

Borg: What did you hear this morning, both of you, that you think could be the first legislation passed by the Senate that is significant legislation? What did you hear this morning that you, Senator Dix, think will be the first -- because you in large amount control being the majority here.

Dix: I think as the Governor laid out, reviewing our policy on boards and commissions, changing the way we do business in our state is clear.

Borg: Just to let our viewers know that boards, we have dozens of boards and commissions in the state of Iowa, and the Governor this morning said that we need to examine whether or not some of those are needed, whether some of them are actually costing us money in unnecessary regulation.

Dix: That's exactly right. In fact, there are so many, Dean, that is becomes difficult to find people to even serve on some of these boards. So I think we've got to be careful because clearly that provides us with input in what the public is feeling about key important issues. But at the same time Iowans expect us to, as I've said numerous times, kick the door in on how we do business and this is I think a good first step in the right direction.

Borg: Comment on that, Senator Hogg. That is, do we have too many boards and commissions? And are in favor of working together with republicans in streamlining?

Hogg: Well, two things. First of all, I know Senator Dix likes to use the line, but I really think it's inappropriate to talk about kicking in the doors. That's not the type of state and country we want to live in. We want to use lawful processes here. But look, Senate democrats and Governor Culver in the budget crisis of 2009 due to the global recession, yeah, we took a look at boards and commissions and I think we're open to that. Last year we eliminated some of the state regulation that was interfering with natural hair braiding. So on a case-by-case basis we can look at those things. You talked about what issues could be passed soon. We passed in the Senate legislation to address traffic safety that had 44 to 6 support two years ago, we've got legislation ready to go and I hope that's something maybe we could do earlier in the session rather than later.

Borg: Going to take a while though to deal with collective bargaining and a statewide contract on health care?

Hogg: That is an enormous issue and I know that Governor Branstad this morning called it antiquated. It's not antiquated. It was passed by a republican legislature, republican Governor in the early 1970s.

Borg: Under Governor Ray.

Hogg: Yes. And it has served our state well. And the people I speak with in cities and counties and schools say labor management relations have never been better. There were very, very few school districts last year that actually had to go to arbitration. We've got a system that works. It is not a problem. Health benefits for our public employees is not the problem in today's economy.

Borg: Senator Dix, how will you approach that in leading republicans and the Senate?

Dix: Sure. Governor Branstad, I think he recognizes that if we're going to rejuvenize our economy and give more opportunities to Iowans we've got to look at how we change the way state government does business and this is clearly one that I anticipate will move through the committee process, we'll look at the details of that and try to find a way that we can advance better opportunities for local governments, more flexibilities, our schools as well and enable them to do the best that we can.

Borg: Senator Bill Dix from Butler County in northeast Iowa and also from eastern Iowa, Robb Hogg, Senator from Cedar Rapids, thanks so much for your ideas here and giving us a preview of what might be ahead in this session.

Hogg: And thank you, Dean.

Borg: You're welcome.

Dix: Thank you much.

Borg: We'll be discussing the upcoming session this Friday on Iowa Press. Governor Branstad will be joining us at that time from our onsite studio here at the Iowa Statehouse. That will be Iowa Press Friday at 7:30 and then Sunday at noon. So for our entire Iowa Public Television crew here at the State Capitol in Des Moines and our producer, executive producer Andrew Batt, thanks for joining us today.

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