IOWA INSIDER

DES MOINES –Panelists at a forum at Drake University urged different state tax and spending policies to stave off the type of steep, mid-year budget cut state government is facing now.

A forum sponsored by IowaPolitics.com and Mediacom took an in depth-look at the state’s budget situation after Gov. Chet Culver ordered a 10-percent across-the-board cut to most areas of the state budget.

The latest cut is expected to mean the layoff of possibly hundreds of state workers and seven-day unpaid furloughs for more than 3,000. Culver has reached out to three unions that represent state workers to renegotiate their current contracts.

Republican State Auditor David Vaudt, a panelist at the forum, said the state should look at a pay cut for state workers at a time when private industry has frozen or reduced salaries.

“I think we always have to look at the cost equation, and definitely in this case, employee salaries are a big piece of what we spend taxpayer dollars on,” Vaudt said.

Vaudt said a 15 percent increase in state government spending in two prior years couldn’t be sustained when revenues grew just 3.7 percent during that same time period.

Victor Elias, senior policy associate with the Iowa Fiscal Partnership, a left-leaning public policy group, said the conventional wisdom that taxes shouldn’t be raised in a recession might be true for the federal government.

But state government provides a crucial safety net and has to balance its budget every year, he said.

“I think we need to look at the revenue side of the budget,” Elias said.

He cited a study that found layoffs of state workers and cuts in services can deepen and lengthen a recession, comparing layoffs of state workers to layoffs at Iowa manufacturers Electrolux and Maytag.

Appropriately targeted tax increases on high-income earners had a less detrimental effect on a state’s economy than cuts in essential services and layoff, Elias said the study found.

Ed Wallace, president of the Iowa Taxpayers Association, said it is time to align the state’s expenses with revenues.

“We have a scenario now where revenues are down, expenditures are up,” Wallace said.

He pointed to agencies and programs created during Culver’s first term as governor as things that have pushed up spending. They include the Rebuild Iowa Office meant to help steer flood recovery efforts. Culver also created the Iowa Office of Energy Independence and the Iowa Power Fund to help develop Iowa’s energy industry.

Elias and Vaudt concurred on the need for a review of Iowa’s array of tax credits, many of which were created to encourage economic development.

Elias wants more transparency in the cost of the tax credits that are awarded and an accounting of the job growth and economic activity they’re generating, specifically citing the state’s research activities tax credit.

“Just asserting that these incentives are bringing in jobs that wouldn’t otherwise be there doesn’t make it so,” Elias said.

Wallace described an “arms race” with other states to bring in the best jobs and the best companies and said incentives that are working should not be thrown out.

“A lot of these different incentives help the businesses that we have stay here and grow,” Wallace said.

A recap of some of the budget savings plans Gov. Chet Culver unveiled at a news conference today:

State Employee Furloughs
3,258 – Number of state executive branch employees not represented by a union contract that will be forced to take unpaid furloughs.
7 – Number of days they will see without pay between now and the fiscal year that ends June 30. Most of the employees are in management or are employees who decided not to join a union.
$6 million – How much the furloughs are expected to save

Pay cuts
10 percent – The pay cut being taken by Culver.
6 percent – The approximate pay cut state department directors will see.

Layoffs
181 – Number of layoffs included in agencies’ budget-cutting plans approved so far by Culver. Culver has rejected plans by the department of corrections and public safety, hoping to find an alternative to laying off 568 employees of those departments — especially corrections workers, state troopers and law enforcement personnel.

Back to the negotiating table
Culver has reached out to three unions that represent more than 16,000 state employees asking them to amend their current contracts. Those unions include AFSCME, Iowa United Professionals and the State Police Officers Council. Culver has declined to outline what concessions he is seeking from the unions to avoid layoffs but said “everything is on the table.”

DES MOINES – An Iowa House panel will send a letter noting a violation by the Iowa Pharmacy Association for failing to file a timely report detailing its spending on a reception attended by lawmakers.

The Iowa House Ethics Committee’s action Wednesday meant they assessed no formal penalty against the association.

But committee members vowed to take a broader look at possible reforms to disclosures required by lobbyists and lobbying groups.

Iowa Citizens for Community Improvement made a complaint against the Iowa Pharmacy Association for failing to file the report five days after the event.

The omission came to light when Gov. Chet Culver said he attended the pharmacy association’s Feb. 10 reception in the hours before state Rep. Kerry Burt’s arrest on a drunken driving charge.

The association’s Executive Vice President and CEO Thomas Temple has said he’s “fairly certain” Burt also attended the reception.

The pharmacy association has attributed the late filing to an oversight, and has said they have made changes to ensure it doesn’t happen again. The association ultimately reported spending $2,926 on the reception.

Adam Mason, state policy organizing director for CCI, said he was encouraged by the committee’s review of their ethics complaint and their willingness to make changes to the reporting process.

Mason said CCI members have kept their eye on who is trying to buy influence and gain extra access to lawmakers. CCI’s tally showed 26 lobbying groups filed late reports.

“We don’t expect these lobbyist functions to go away,” Mason said. “What we do want to make sure of is that Iowans have access to the information so that we know who’s trying to gain that access and influence.”

The ethics committee declined to ask a special counsel to investigate the matter, noting the cost and that facts surrounding what happened were not in dispute.

Rep. Helen Miller, a Democrat from Ft. Dodge and chairwoman of the ethics committee, said it was time to look at filing requirements. She said the goal is to ensure transparency.

“We want to encourage the public to look at and help us make sure that we do our jobs, and everybody else does theirs,” Miller said.

Many of the receptions held during the legislative session are not held specifically for lawmakers, Miller said, and are open to the public.

“I think that too many people think that we’re just down here partying night after night after night. Most legislators don’t even attend these events,” Miller said.

Mark Brandsgard, chief clerk of the Iowa House, proposed several changes to reporting rules for lobbyists and their clients. They include requiring functions to pre-register their events and automatically posting delinquent filers online. The time limit for filing the reports also would be extended from five business days to four weeks under the proposal.

The Senate Ethics Committee took no action against the pharmacy association in a decision last month. Senate President Jack Kibbie, D-Emmetsburg, said then that lawmakers planned to consider more oversight and sanctions for those who fail to meet the reporting requirements.