The 2017 Iowa legislative session grinds on as lawmakers pass major bills in both chambers. We'll cover issues from the Statehouse and beyond on this Reporters' Roundtable edition of Iowa Press.

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For decades Iowa Press has brought you politicians and newsmakers from across Iowa and beyond. Now celebrating more than 40 years of broadcast excellence on statewide Iowa Public Television, this is the Friday, March 17 edition of Iowa Press. Here is David Yepsen.

Yepsen: Between two funnels. It's a familiar description for legislation at the Iowa Statehouse every mid-March. Republicans with trifecta control of state government have already decided the fate of key, albeit controversial, legislation on issues ranging from school aid to collective bargaining with more to come. And this week the state of Iowa's Revenue Estimating Conference lowered its forecast of incoming tax receipts prompting republicans to say it's raining and they need to dip into the rainy day fund to pay the bills. Here to talk about it, Erin Murphy, Statehouse Bureau Chief for Lee Enterprises, Kathie Obradovich is the Political Columnist for the Des Moines Register, Barbara Rodriguez serves as Political Reporter for the Associated Press and Kay Henderson is News Director at Radio Iowa. Erin, in honor of the fact it's St. Patrick's Day, we'll give you the first question here.

Murphy: Appreciate that.

Yepsen: The Revenue Estimating Conference, what does that mean that they met and lowered revenue estimates?

Murphy: So it's a non-partisan group that basically estimates the revenues for the coming year, the coming fiscal year and it gives state legislators numbers to work with when they craft a budget. And, as you noted, sometimes things happen in the economy that go unforeseen and so they have to make adjustments. And in this case, for a second time this year, they have had to lower the amount of expected revenue, which means the state has less money to spend on some programs it has already committed to.

Yepsen: Why is it important?

Murphy: It's important because now the state has to go back and legislators have to find, in the case of the current fiscal year, $130 million to cover programs that, again, they've already set aside to, they said they're going to use their cash reserves to cover that. But it also impacts the budget they'll be working on in the next few years here. For the coming fiscal year that number has also been dramatically reduced. And they have already made some commitments in education and Medicaid for that too, so it's probably going to mean more cuts in that budget as well.

Obradovich: David, this is a big buzz kill for republicans who finally have control of the legislature and it means that they can't do some of the priorities that they wanted to do, especially a big tax cut. The Governor has said any tax cut would not be sustainable at this point because revenues are down. So there are other priorities as well. The education savings account, for example, for putting more state money into private schools, had to fall off the table, because that was too expensive. Water quality, which was the Governor's big priority last year. You've got to have money for these things. And beyond that, they're supposed to be the party of fiscal responsibility, right, and here they are having to go to the piggy bank, the rainy day fund to balance the budget. So all of this is not really particularly exciting for republicans.

Rodriguez: And what's interesting too is they're saying, we're going to dip into cash reserves to pay for this, but they're also saying, we're going to pay it back pretty quickly. So the question then goes, would that money come from the upcoming budget? So does that actually mean we're even going to be facing a larger shortfall for the upcoming fiscal year? So there's a lot of unanswered questions about exactly how this will all play out.

Yepsen: What does this mean for the future of tax credit legislation? Just so people are clear, our viewers are clear, when we talk about the end of the fiscal year, that is between now and the end of June that they have to cut out lots of money, or find another way to pay for it. And then you're talking about the 2018 budget, the budget that ends at the end of June of 2018. So we've got two budgets at work and sometimes that can be confusing.

Rodriguez: Right. So republicans are acknowledging that hey, we need to look at the budget, we need to see where we can make cuts. So they have kind of introduced or are talking about legislation that would kind of limit how much we spend on these tax credits which essentially pay residents and entities seeking reimbursements for certain purchases. But I don't know that that's going to play a role this fiscal year or potentially next fiscal year, this legislation. But that's not enough for democrats to say that republicans are figuring out how they're going to deal with this budget shortfall.

Obradovich: The only way they do all these tax credits is if it's part of a major overhaul, a comprehensive tax reform that also significantly lowers rates, both for individuals and for corporations. And that's the only way you withstand every single interest group who has a tax credit coming up to the Capitol and lobbying for that. So I would see this playing out, I think they'll talk about the policy, they may have a framework at the end of the year. I don't think we see anything happen until next year on tax reform.

Henderson: The other thing is this budget dilemma happens in an atmosphere in which at the federal level you have a President Trump that has introduced this skinny budget. And so conservative republicans would like to see some of the same pairing of the state budget that President Trump has advanced at the federal level. And so you have a dynamic in which republicans are now the governing party for sure in Iowa and so you have this internal ideological conflict.

Yepsen: Kay, how did this get messed up? At one level it's kind of arcane, revenue estimating, revenue forecasting. But you start cutting programs that are already, have already been cut even more, it sort of asks the question, somebody blew it at the REC didn't they? How did they mess this up?

Henderson: One thing that you're seeing that is incredibly interesting to policy wonks is that state sales tax revenue is basically zero percent growth and even just a little bit below last year's levels. And one of the things that people are seeing is that more and more Iowans are buying things online, they're not going to the local hardware store, they're not going to the local store to buy their goods and when you buy things online you escape paying the sales tax. So that is one of the factors here. The other factor is refunds are larger in terms of individual income tax so far in the tax filing season. That was unexpected. And income growth is not what they had expected it to be among Iowans. And Holly Lyons, who is a member of this three-person panel, she is the director of the Legislative Services Agency, suggested it is because Iowans by and large, as an overall population, don't have the kind of skills that would merit higher paying jobs. And there are a lot of industries out there who say we just can't find people to fill the jobs at the skill level that we need.

Yepsen: Is that how we have an unemployment rate just slightly more than three percent?

Henderson: Right.

Yepsen: And we still have this vector of tax revenues slipping.

Henderson: Exactly.

Rodriguez: And the thing that is interesting though, republicans tend to focus on the fact that we have low commodity prices in the farm economy, but democrats try to showcase that it is actually because we're just not fiscally responsible with tax breaks for corporations, everybody has a different opinion for why we don't have enough money to pay our bills. And I think it's interesting too because technically Iowa, its revenue growth is going up, it's just not going up at the rate that had been predicted. And so we're healthy as a state, so why can't we pay our bills?

Murphy: But Dave Swenson, an economist who has been on this show before, has been saying that he felt the REC was a little aggressive in its prediction, its expectation of growth and so this is kind of the chicken is coming home to roost in Dave's opinion. But, to be fair, this is the first time we've had something like this, two reductions in the same fiscal year, in a while. I haven't been doing this terribly long. But REC has traditionally been pretty close to the mark.

Yepsen: I see the other day where the state Department of Revenue is telling us our refunds are going to be a little slower to get back because they're worried about identity theft. Well, that's fine, but is also true, is it not, that if they're not paying refunds out quite as quickly they get to hold onto the money?

Obradovich: Yes, yeah, exactly. And it's interesting to see, again, republicans in this position. But it's also interesting to see democrats saying, oh, all of these tax credits are draining the treasury and we're giving too many tax giveaways. Well, people maybe remember that democrats were in charge of the Senate for a number of years and things like the corporate property tax bill that passed last year that is sending a lot of money out of the state treasury to repay local governments, that was a bipartisan bill. So when they're pointing fingers at these kinds of things I think voters may have a short memory about who was in charge. But I think people at the Statehouse are going to remember who was part of that legislation.

Henderson: And back to the whole cutting taxes issue, you still have in the Senate Majority Leader Bill Dix, someone who continues to talk about completely getting rid of the Iowa income tax as his ultimate goal. So you have a tension within republican legislators, they really, really want to come out with a tax plan this year, they're finding it more and more difficult to do so.

Yepsen: Well, if you're going to do a tax cut you want to wait until an election year to do that too. The other thing on tax credits, it always seems, Barbara, that we have everybody say, oh yeah we have to look at tax credits and all these exemptions that we have, but then you start to get around and specify just which ones they are. You want to get rid of home mortgage deduction? Well, oh God, we can't do that.

Rodriguez: Right. And we're talking about roughly 40 tax credit programs, some have been around for decades, some have been passed in the last few years, some of them have caps, some of them don't. And I think we're still even considering more legislation that may sweeten that for some groups. So it'll be interesting to see where we are at the end of the legislative session and even a year from now whether we're going to be seeing these huge reductions in tax credits.

Yepsen: To be continued on this. We've got to move on. We've got a lot of stuff to talk about today. Kathie, what about the status of the abortion laws that are up there being considered?

Obradovich: It looks like there is, again, a possibility for actually bipartisan abortion legislation. The Senate passed legislation dealing with limiting abortions past 20 weeks of pregnancy. That bill passed with a bipartisan vote. And so it's possible. But what's interesting about this bill is they could have done this a couple of years ago and the problem comes from the right because some republicans are holding out for more on abortion, in particular a personhood bill that declares that life begins at conception. And there continues to be some conflict over that, whether you go for what is essentially a court case, try to push this issue up to the Supreme Court, because a personhood bill that has any teeth at all to it would be unconstitutional under Roe V. Wade. Or do you go with a bill that you think probably could take effect and actually be upheld and be bipartisan? Well, why do those two things have to be mutually exclusive? They don't. But you've got legislation, you've got people of two minds on those two issues.

Rodriguez: And you've got to look at it too from the perspective of a personhood bill has not technically been successful in other statehouses in terms of this pathway when a 20 week ban has been passed in more than 15 states. There has been some legal challenges with some of those pieces of legislation in other states but it may have more of a chance.

Obradovich: -- scuttled the bill a couple of years ago to the anger of some of the legislators on the right and what happens is that republican leadership do not want to put that bill up for a vote if some of their members are going to be in a position of voting no. So that bill, I predict that bill stalls out.

Yepsen: Erin, in Ohio they passed both bills. Governor Kasich vetoed the personhood.

Rodriguez: It was a heartbeat bill.

Yepsen: Yeah, so is that game being played here?

Murphy: Well, maybe that. It's also the personhood is kind of long play, as Kathie referred to it, and I think you have republicans now who are hopeful that with a new all republican control at the federal level too and you already have one new conservative justice that has been nominated to the Supreme Court, there's a possibility that there could be one or two more yet under President Trump's watch that if you get a conservative enough Supreme Court that this goes back and maybe Roe V. Wade is overturned. That is the long play.

Yepsen: Kay, Water Works, to switch gears. What is going on with this whole issue with the Des Moines Water Works? Where does that issue stand?

Henderson: There is a bill pending for debate in the Iowa House that would essentially change the management of the Des Moines Water Works in such a way to give the power to city councils in the Central Iowa area. Supporters of this bill think that the ultimate outcome would be the end of the lawsuit filed by Des Moines Water Works' directors that has challenged the way three northwest Iowa counties are managing drainage districts and therefore the agricultural runoff that Des Moines Water Works folks are so angry about in the Raccoon River water supply.

Yepsen: So, what does anybody think here? Is this a stick it to Des Moines bill? Anybody can weigh in here.

Obradovich: Kinda, I mean, it kinda is because you've got a lot of people in the rural areas who didn't like that lawsuit and they don't have any dog in this fight except that they don't want other cities perhaps to get the same idea and start looking for money out of rural areas to clean up their water. So there is kind of an anti-Des Moines sentiment here. The other thing is it sets up a really interesting discussion about local control and especially the republicans, how much they care about local control or profess to, and yet they can't stop themselves from meddling.

Henderson: For example, the Iowa House this past week has passed a bill that undoes the local minimum wage hikes that four Iowa counties passed. It also prohibits cities from passing local ordinances about grocery bags. So it is trying to impose the legislature's will in an area where many I guess purists would say this is local control, let it happen.

Rodriguez: And just on that point about local control, there is gun legislation that is being considered as well and there's a provision in that bill that says an individual can sue local government if they have a gun free zone. And so that's another discussion on local control. And I know you also had a piece about that discussion, it's something that republicans emphasize is a priority for them yet the legislation that is coming through this year --

Obradovich: Sanctuary cities is another one.

Yepsen: Erin, talk a little bit briefly on worker's compensation and TORT reform. What is happening with that issue?

Murphy: There is a few pieces working through right now that would change the way, as you mentioned, worker's compensation, a lot going on there, but in general it kind of lowers, at its heart lowers the level of money that an individual can receive in a worker's compensation case. There is a medical malpractice reform bill out there, one relating to asbestos use. So there is a definite package of TORT reform that mostly kind of shift the balance of power in the favor of the business versus makes it a little harder for the worker.

Rodriguez: I was just going to say that republicans again are saying that a lot of these pieces of legislation are aimed at reining in a system that has become lopsided and especially with attorney's fees. And so, again, democrats aren't really buying it and they're using this as opportunities to say, this legislature, this session is about attack on workers. So it's setting up, it is giving democrats a lot to work with I think for midterm elections.

Yepsen: Well, speaking of elections, we've got a lot of politics going on in this state right now. So I want to shift gears. Kathie, Congressman King was back in the news.

Obradovich: Oh that Steve King, oh that Steve King being Steve King, as the Governor put it. Yes, he piped up with a tweet this week that was basically about the elections, of all things, but he tossed in one of his theories that you can't restore civilization, and by that he means western civilization, with other people's babies. This is not a new topic for Steve King. He made some similar remarks during the Republican National Convention. And fellow republicans did, as they did back in August, condemn his remarks. But then they want to leave it there. They say, oh we don't agree with Steve King but, you know what, Steve King is Steve King. He can make it uncomfortable though for republicans who have to run statewide. They don't want to upset Steve King's constituents, he remains very popular in the fourth district, he hasn't had any serious competition for a long time and yet you've got maybe swing voters and maybe some more moderate republicans in eastern Iowa who think, what the heck is Steve King saying and bringing all of this embarrassing attention to Iowa.

Yepsen: Erin, is there any sense that democrats see an opportunity here in all this? He gets re-elected but they have not had the most --

Murphy: Exactly. They do. Kim Weaver who challenged him in 2016 has been hot on the fundraising trail this week in the wake of this. But they have felt that way in the past too when they've said these things, as Kathie said, this is nothing new, we've been down this road before and he still wins his elections comfortably. Maybe this year is a little different. It's the whole midterm election and the first year of a new power, party power structure. I'm sure they'll ratchet up and try and take another run at Congressman King, but to this point none of this has impacted him.

Yepsen: Kay, I was born and raised in that district and part of me says, Steve King speaks for a lot of people in that district. This is a more conservative place.

Henderson: These are the kinds of things that President Trump said on the campaign trail.

Yepsen: So isn't he representing his constituents?

Henderson: That district has a huge voter registration edge for republicans varying between 70,000 and 80,000. The way that Steve King loses that district is he loses a primary. It would be very difficult for a well-funded democrat to unseed him. We saw that happen in 2014 when Christie Vilsack, well-known throughout the state, ran against him, very well financed, was unable to defeat him because of the voter registration edge.

Yepsen: Erin's point, 2018 ought to be a pretty good year for democrats. So does anybody see anybody on the radar that could --

Rodriguez: Well, just again, 2018 is here before you know it and the question is who is going to run against Kim Reynolds for democrats? There's a lot of names that are floating around. There hasn't been too many people that have officially put their hat in the game there but we've got Todd Pritchard in the House, we've got Nate Boulton in the Senate, there's talk of Wes Breckenridge. Again, there's rumors and they're making appearances in some locations but we don't have people officially in the game yet.

Yepsen: Shouldn't democrats, if they were going to mount a serious campaign for Governor shouldn't they be farther along?

Rodriguez: Absolutely. Kim Reynolds has her, she has raised more than a million dollars at this point?

Yepsen: And she's got a primary. Is Ron Corbett going to --

Henderson: Well, he's saying at the end of his condition of the city message in Cedar Rapids a couple of weeks ago, he had been hinting for weeks that there was going to be a big thing happen at the end of this and everyone suspected it would be the launch of his gubernatorial campaign and instead it was the launch of his lounge singing career, which I'm not sure is going to go anywhere.

Obradovich: He's not running for re-election though as Mayor.

Henderson: Exactly. He faces a conundrum. He has done things as Mayor in a bipartisan way that make him untenable as a candidate for republicans. He supported project labor agreements, which great for union labor, republicans in the legislature are in the midst of trying to unravel those statewide. So he's having a hard time raising money, getting any traction. The interesting bubbling up topic about Ron Corbett as a candidate, would he ever consider running as an independent?

Yepsen: What about as a running mate?

Murphy: But to get back to your point, and it's an excellent one, it's going to take a lot of money to win the Governor's race here in Iowa. Kim Reynolds already has a head start. The national groups may get involved, the democratic governors may get involved to help out, but as funny as it sounds to the layperson it's getting well on in the game here to not have some major candidates.

Henderson: The other interesting thing in emerging candidates is you have Sherzan who ran against, who ran for the congressional seat in the third district, has announced that he would like to run again --

Yepsen: Against Dave Young.

Henderson: Against David Young. He was seen as an incredibly effective campaigner, just fell a little bit short in the primary among democrats. You have Chris Peters, the doctor from the Iowa City area, who ran a race and very much surprised a lot of people in his finish against Dave Loebsack. You have other emerging people in that district.

Yepsen: What about somebody to run against Rod Blum up in northwest Iowa?

Murphy: That is one name that comes up is Abby Finkenauer, state legislator from the Dubuque area, a younger state legislator seen as a rising star in the party. Monica Vernon who has run in that race a couple of times is not in. She's going to run for Cedar Rapids Mayor actually. And that’s another seat where it should be a fairly safe democratic district but Rod Blum has won a couple of elections now and at this point doesn't have a challenger.

Yepsen: We've got just a couple of minutes left, Erin, and I want to save time for this one question. When is Terry Branstad going to be leaving?

Murphy: It's still up in the air. The latest best guess we have is late Aprilish if I remember right. It's starting to look more and more like he will be here throughout most if not the entire legislative session.

Obradovich: And that is really good news for Kim Reynolds because now she doesn't have to be the signature on these budget cuts and all of these bills that possibly could be really polarizing in the next election. So I would guess if she has any pull with Chuck Grassley she's probably whispering in his ear, tell your Senate colleagues to slow down.

Rodriguez: But it's also important to note that if you ask Kim Reynolds directly, do you support all of these policy initiatives that are coming through the legislature, she'll say, yes and I'm not putting myself away from the Governor and what his actions are, they're my actions as well, we're a team, we have been for the last six and a half years.

Murphy: Yeah, her signature is not on the bill but she's not distancing herself from them either.

Henderson: And democrats are intentionally throwing her name in, every time they criticize something that Terry Branstad does they say, the Branstad-Reynolds administration. So they're going to tag her with every piece of legislation that Branstad signs into law this year that they are going to characterize as negative for the state of Iowa.

Yepsen: Branstad's departure to become Ambassador to China, it's later than we all expected, isn't it?

Henderson: It's because the Trump administration has not yet filled key roles in key agencies and so those confirmation votes for deputy secretaries of state haven't happened yet and those should happen before the ambassadors come before the Foreign Relations Committee.

Yepsen: Is there any sign that Governor Branstad has opposition in the Senate to this? Senators can put holds on nominations. Kathie, do you have any sense of this?

Obradovich: I have not heard a single peep of opposition. People widely expect that once he is up that he'll go through pretty quickly, it's just getting through the backlog. And some of these appointments start getting political baggage. Senator Grassley just said he's going to hold up the deputy attorney general because he's not getting the answers that he wants from the FBI on Russia. Some of these issues become political pawns.

Yepsen: We're out of time. Listen, thanks all of you for being with us on Happy St. Patrick's Day.

Thank you.

Yepsen: And we'll return with another edition of Iowa Press next week at our regular times, Friday night at 7:30 and Sunday at noon. For all of us here at Iowa Public Television, I'm David Yepsen. Thanks for joining us today.

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Funding for Iowa Press was provided by Friends, the Iowa Public Television Foundation. Iowa Community Foundations, an initiative of the Iowa Council of Foundations, connecting donors to the causes and communities they care about for good, for Iowa, for ever. Details at iowacommunityfoundations.org. The Associated General Contractors of Iowa, the public's partner in building Iowa's highway, bridge and municipal utility infrastructure. I'm a dad. I am a mom. I'm a kid. I'm a kid at heart. I'm a banker. I'm an Iowa banker. No matter who you are there is an Iowa banker who is ready to help you get where you want to go. Iowa Bankers, allowing you to discover the genuine difference of Iowa banks. Iowa Communications Network. The availability of high speed broadband service is essential to fulfilling the promise of a connected Iowa. ICN's Broadband Matters campaign showcases the importance of delivering broadband to all corners of Iowa. Information is available at broadbandmatters.com. UIeCare is helping provide access to health care services to more Iowans. By offering online visits with a University of Iowa health care provider, UIeCare helps Iowans seek medical care without leaving home. Learn more at UIeCare.com.