DES MOINES -- With the presidential caucuses come and gone, the spotlight shifts to the State Capitol, where the 2008 Legislature convenes Monday.

Gov. Chet Culver, a Democrat, and legislative leaders have said they want to help out Iowa's middle class this year.

Culver points out that last year, the state raised the minimum wage and expanded the Earned Income Tax Credit to assist working families.

"We want to build on that record of helping the middle class and helping others get an opportunity to move into the middle class," Culver said in an interview with Lee Enterprises.

To build on that success, Culver thinks lawmakers will discuss what can be done to raise worker salaries.

Iowa has long been considered a "low wage" state, and leaders have moved to develop more lucrative positions. Culver wants to build on those efforts, although he has not given a preview of his plans.

"We'd like to do something to increase the wages of workers. Right now, we're 42nd in the nation. That's not good enough," Culver said.

With lawmakers set to gavel in the 2008 session, Culver stresses a need for discipline on spending and has asked state agencies to limit their budgets.

At the same time he has promised to maintain spending commitments made last year to raise teacher salaries, fund preschool initiatives and the Iowa Power Fund, a $100 million effort to spur the renewable energy industry.

Iowa House Minority Leader Christopher Rants, R-Sioux City, said Republicans are worried about the spending increases Culver has approved.

"It's kind of like the guy who suddenly wakes up after New Year's Eve, and gets his first credit card bill and says, 'Oh my gosh. Who charged all this stuff? How am I going to pay off these debts?' " Rants said.

House Majority Leader Kevin McCarthy, D-Des Moines, describes the session's agenda as standing up for the middle class and being responsible with the state's pocketbook.

With fewer dollars to spend this year, lawmakers are likely to zero in on policy initiatives. Among the simmering issues:

- Illegal immigration. House Democrats say one focus will be creating penalties for employers who knowingly hire illegal immigrants. They say the federal government has failed in its enforcement role, and the state must step in.

- Affordable health care. A special commission studying Iowa's health-care system recommended Iowa achieve universal coverage. The commission said the first step is insuring all of Iowa's children and signing up those who are eligible, but not enrolled, in health-care programs for the poor.

- Local smoking restrictions. McCarthy said the House likely will consider proposals to allow local governments to enact smoking restrictions. He predicts the Legislature will stop short of passing a statewide ban in public places.

Even with spending limitations, legislators appear ready to take on some expensive projects this session.

- Building a new prison in Fort Madison. Talk of replacing the aging maximum security prison, built in 1839, has swirled around the Legislature since two inmates escaped in 2005. Some have raised questions whether Fort Madison, in the far southeast corner of the state, is the best place for facility. But Democratic leaders say a new prison is likely, and have begun discussions on how to pay for it.

- Road funding. The Legislature will look at the estimated $200 million annual shortfall in funding for road construction and maintenance. Culver has nixed the idea of raising Iowa's gasoline tax, and legislators are likely to consider raising registration fees for pickup trucks.

- Statewide sales tax for schools. The Legislature will study ways to replace county-by-county local option sales taxes used to pay for school infrastructure projects with a statewide penny tax.

Looming over this year's session is the November election. All 100 Iowa House seats will be at stake and 25 of the Senate's 50 seats.

Democrats hope to widen their majorities in both houses, while Republicans hope to win back control.

With few competitive races expected, the focus will be on the narrowly divided House.

Rants believes the House will be in play, and said the GOP has worked hard to recruit House candidates.

"We've got a lot of good people stepping forward," Rants said.

Charlotte Eby can be reached at (515) 243-0138 or {M3chareby@aol.com.