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Iowa's changing economic forecasts are rippling through the state's finances and it seems our public universities have a budgetary bullseye on their backs. We sit down with Iowa Board of Regents President Bruce Rastetter on this edition of Iowa Press.

Funding for Iowa Press was provided by Friends, the Iowa PBS 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.

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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 PBS, this is the Friday, January 27 edition of Iowa Press. Here is David Yepsen.

Yepsen: Since Bruce Rastetter's appointment to the Board of Regents in 2011 funding has been a central challenge for Iowa's state universities. Mr. Rastetter has been seeking a combination of public dollars to prevent tuition increases and more private fundraising at the highest levels in Ames, Cedar Falls and Iowa City. This month Regents institutions were thrown an economic curveball by Governor Branstad's proposed mid-year budget cuts. Also, Mr. Rastetter's current tenure on the Board of Regents expires at the end of April. And he joins us today at the Iowa Press table. Mr. Rastetter, thanks for being with us again today.

Rastetter: Thanks for having me, David. And welcome back to Iowa.

Yepsen: Good to be back. Thank you. And joining us for the conversation are the Des Moines Register's Political Columnist Kathie Obradovich and Radio Iowa News Director Kay Henderson.

Henderson: Mr. Rastetter, the President of Iowa State University has been saying for the past couple of years that his institution is at a tipping point because of previous years of frozen tuition. What guidance can you give for anxious parents and students who are trying to plan for the fall semester?

Rastetter: I don't think it was from previous years of frozen tuition because when we froze tuition for two and a half years in a row, first time in 40 years, we received significant increases in state appropriations, which is the partnership with the legislature why we froze tuition. But Iowa State University has been a university that has been really popular amongst parents and their kids to send there. It has grown from 28,000 to 36,000, engineering has grown from 6,000 to 9,600, college of agriculture 2,800 to 4,200 and so the Board has been concerned and I know President Leath has about enrollment management and making sure that the university has the resources, he has hired over 200 new professors. And so we hear good things about the graduates and their graduation and we're trying to make sure that those resources are there.

Henderson: So what can you tell parents and students about tuition for the fall?

Rastetter: Well, I think what we can tell them about tuition in the fall, that the Board has voted, it's going to be set. We decided when we went through the process last summer and fall that we were going to have clarity on how much tuition raises would be, the two-year budget plan with the state, the two plus two, we'll raise tuition two percent to in-state students and we will then ask the state for two percent appropriation increase.

Henderson: Regardless of what the legislature does?

Rastetter: Well, the legislature we've gone through the deappropriation, which we didn't know about when we voted on tuition last fall. Fortunately the universities have been involved in efficiency studies. From what I understand those cuts are being made to this year's budget, not next year, and there will still be a total revenue increase if we're successful with the two percent for tuition and appropriations to all three universities. So we're focused on the next round knowing that we're able to slightly impact that unfortunate deappropriation that just happened.

Obradovich: The legislature gave the universities $18 million total in cuts and then divided it up for you, $8 million to Iowa State University, $8 million to University of Iowa, $2 million to UNI. Normally the legislature would let the Regents make that decision. Why didn't they trust you with that?

Rastetter: No, actually, Kathie, all our appropriations come to specific each university. So I think they looked at it, divided up under the appropriations that was there reflective of what the universities receive and also I think reflective of the challenge that the University of Northern Iowa has where it's more dependent upon state appropriation, in-state students and has a more limited ability to take budget cuts.

Obradovich: But you only have a half a year to make these cuts and you're saying that they won't have a significant impact on the universities?

Rastetter: Well, I think what they're looking at is holding off on hiring people, they're looking at some low enrollment classes, they're looking at other costs that they can hold off on or wait until other efficiencies happen. Sure, any cut like that has an impact and we would have rather it been spread across a broader portion of the state, but it isn't and so we're committed to dealing with that, we lobbied to try and lower it, got it lowered from $25 million to $18 million. But we're going to focus on how it can have the least amount of impact on the quality of education. There is administrative things that can happen.

Henderson: We have more questions about your role as Regents leader, but you have also had a role on the Trump transition team. You were an agricultural advisor to President-elect Trump. Now that President Trump has taken office he has said, no TPP, he has suggested that NAFTA will be renegotiated, there has been some tense moments between the U.S. and Mexico. What can you tell farmers about how a trade war might impact them?

Rastetter: Well, I think what I would tell farmers and putting on my other farmer hat because I happen to be that on certain days on corn and soybeans, and corn and soybean prices are not good and often times they're below the cost of production in the last year and a half and so it's challenging. But what I would suggest, the President knows the value of trade and there is a difference between free trade and fair trade. And one of the examples I gave recently is that ethanol plants in Iowa a few months ago had China impose a 35% tariff while distiller's grain was being shipped to China. And so it just came out of the blue. So we faced a variety of these things from other countries and they need to be talked about. Cattle producers are facing those same kind of tariffs in Japan while we let Brazilian beef into the U.S. tariff free. So I think we've got to have people evaluate it in totality. But trade is extremely important to agriculture, it's really important to Iowa. I would expect that will continue.

Obradovich: What kind of message did you take from President Trump loading up his cabinet with petroleum people or people from petroleum heavy states such as Governor Perry in energy, Scott Pruitt from Oklahoma in the EPA, Rex Tillerson, former Exxon CEO? What message do you take? And should ethanol producers be worried about that?

Rastetter: I think it is always important to be watchful on all those things but I think we've heard and I personally have heard President Trump say he supports ethanol and he supports blending ethanol and he supports all sources of energy, which do I. But the RFS is market access and so it needs to be maintained.

Obradovich: And that's the Renewable Fuel Standard.

Rastetter: The good news is those energy guys are not in charge of the USDA and I think they know that the President believes it's important for the U.S. to have value-added agriculture and that's an important part, it's over 10% of our energy supply right now on gasoline.

Obradovich: And there was a little bit of furrowed brows with the choice of Sonny Perdue as USDA Secretary. But you know him, right? You've done some work with him?

Rastetter: I know of Sonny Perdue and I've reached out to him, Governor of Georgia, former Governor of Georgia. He was a veterinarian by background and so he understand animal agriculture and how important that is to the U.S. and protein production.

Obradovich: Do you think he understands the needs of Midwest agriculture, which is very different from what they do in the South?

Rastetter: I think if he doesn't he soon will. He has good friends like Governor Branstad and others and a number of us are going to make sure that we encourage him to be part of that and that's part of the process of whatever ag secretary would have been chosen to make sure that they're in line with the basic areas of the country that are really important.

Henderson: As David mentioned a few moments ago, your current term as a member of the Board of Regents is soon to expire. Do you wish to be reappointed?

Rastetter: That's a good question --

Henderson: What is the answer?

Rastetter: I've been thinking about that and it has been one of the really unique challenging experiences that I've had in life and I think we have made a significant impact, re-establishing a relationship with the legislature in a very open, transparent way, we've had funding increases actually of $80 million over the last six years, we've hired three new presidents and we've got dramatic growth both in the universities, University of Iowa Hospitals and Clinics, we tried to establish a strategic view as a board. There's a lot of work to be done but I also have another life at Summit and all the things that we're doing and a great group there. So I've just got to balance that and decide what I kind of want to do going forward and also have those conversations.

Henderson: Is it worth it to be the lightening rod that you've proven to be over the past --

Rastetter: Kay, that's a good question but I don't think that if we challenge the system we'd have two and a half years of tuition freeze, first time in 40 years. It's really important to parents and their kids that that happen. These are public universities, they need to be accessible. They were accessible for me. I grew up on a small farm, went to community college, went to the University of Iowa, I think that that's critical. And our efficiency study, the initiatives the Board has had, the challenges we've had with the legislature but how directly we face those and how they have supported us, it has become a partnership that we can feel good about.

Henderson: If you were reappointed, would you be confirmed by the Iowa Senate?

Rastetter: That would be a decision by the Iowa Senate.

Henderson: Have you done a vote count?

Rastetter: No I haven't.

Henderson: Has someone done one on your behalf?

Rastetter: There's a bunch of terrific people there and I had a good relationship with Mike Gronstal, he's not there today, but we'll just see. I haven't decided yet. We'll decide that in the next couple of weeks.

Obradovich: There were democrats though already last fall before they lost the majority going around the state saying that they have concerns about the operation of the Board of Regents under your leadership including concerns about the way that Bruce Harreld was hired as the President of the University of Iowa, they're concerned that was a little bit too cozy, they had some concerns about some conflicts of interest, they had raised concerns about land sale to President Leath, for example, and ag project in Africa. Can you assure legislators and Iowans that you have a good handle on management of the Board of Regents?

Rastetter: Kathie, you just need to look at the results. We have stopped the funding loss in the legislature. I can't stop state revenue changes this last year, but we stopped the funding loss. And if you ask republicans in the House there is a new open transparency between the Regents and the House of Representatives. If you ask the Senate on the work that I've done personally up to the Capitol trying to articulate a vision for the university, asking the university presidents to get reinvolved, but these are big universities, there's going to be challenges. I do a variety of things. I've tried to disclose that. But if you look back, and you've been here a while, Marvin Pomerantz, Michael Gartner, David Miles, Craig Lang, John Forsythe, all of the presidents of the Board of Regents have not been without their own challenges on moving the system forward. It's a big system, Iowans take it seriously, I do and I tried to accomplish things as President of the Board and I've tried to do that.

Obradovich: But would you acknowledge though that some mistakes were made, especially when you look at you just mentioned transparency, there were a lot of questions raised about how President Leath's airplane mishaps were handled and the process between the foundation and the university in supplying those airplanes.

Rastetter: Sure there has and I think when that came up last fall and obviously that was a rough time for President Leath and that whole process, the Board reacted to it properly by as we learned things we conducted an independent audit, had every flight audited, you've seen the audit report. The Board held a special meeting and we had executive session with President Leath and he has had both public statements, private statements and the Board has and the Board is now about additionally strengthening our policy on travel, which we learned a lot during that audit and during this process. And I think it's how a board responds to that. No one tried to hide anything, we had that public audit and we tried to be very open that people are going to make mistakes, we're going to make mistakes but it's how we react to hose in a very open way that I think is important.

Yepsen: I want to go back to something Kay was asking about. You said you aren't sure that you want another term as President of the Board of Regents. There has been some speculation that you might be in line for a job in the Trump administration. You were an advisor during the campaign, you have met with those folks since the election. Is it possible that we'll see you winding up in some federal position?

Rastetter: I don't think you will. And, in fact, I enjoy the life that I have and variety of investments that we do and agriculture and the Board of Regents. I do want to make sure that I can where I can make an impact on ag policy, similar to the trade question that was just asked. I think that's important. If one has those opportunities to articulate and speak up for the farmers and the people in the state that you care about so that we have a better economy in Iowa and I view that role. But I'm not looking for a job nor do I intend to get one there.

Henderson: There are a couple of proposals that have emerged at the Statehouse. One seeks to get rid of tenure. You have weighed in on that. Why should tenure be maintained?

Rastetter: I think tenure should be maintained within the evolution that we've seen it happen where there is additional reviews that happen, where there is additional scrutiny on when people are tenured, but it has been an important part of the system, the reality also it's a part of the national system. For us to have high quality professors we're going to have to have tenure. That's a reality. And we're going to have to pay people well that are very good at their job and I think that's true in private business, true at the universities, so I weighed in on that. I don't think the bill that Senator Zaun proposed is an appropriate way to deal with it and he should know that the universities are focused and the faculty is on wanting high quality people that work every day and are there to make the university better and the student experience better and that learning experience better.

Henderson: The son of the Iowa GOP's Chairman, Bobby Kaufmann, who is a state representative, has introduced something called the suck it up buttercup bill. Regardless of the merits of it, does that show that there is a schism in Iowa between what happens in these Regents communities and the rest of the state, that the rest of the state isn't comfortable with what is happening at the Regents institutions?

Rastetter: I think it's just a reflection of difference of opinion. I think that has always been there. Universities are different than rural Iowa areas just by the nature of the community and what it does. And so I think that was a political opinion on his part. I get that. And also we will all move forward and people can have their opinions, that is why we have the society we live in.

Henderson: Do you think there was inappropriate activity on the campuses to support the emotional welfare of students who were inconsolable about the election?

Rastetter: I think closing down Interstate 80 was inappropriate and was a real safety issue. And I think that what we've heard from Iowa State on the counseling sessions they were going to do that after the election. I may have varying views on that, we all win some in life, we lose some in life and we all try to move forward together. So I think that's the key message that I heard being sent that I'd continue to support.

Yepsen: Mr. Rastetter, one of the jobs of the Board of Regents is to be a buffer between politicians and the legislature and Governors and the universities. Now, how do people in the state universities feel about the Governor and the legislature? My sense is they're not very happy with appropriations, with bills like Kay just mentioned here. Is that a problem that our campuses have to worry about?

Rastetter: That's not a problem and naturally, David, as you look at it, over the last six years we have received $80 million increase in state appropriation. Over a ten year period of time, just simple math tells you that's $800 million that doesn't have to come out of parents' tuition pockets and increase student debt. We have the largest building projects going on at our three universities, in particular the two larger ones, that we've had in history. Part of it is the flood in Iowa City, but we have a new bioscience building at Iowa State, a new innovation building, a new research park building, we have a new pharmacy building at the University of Iowa, we have Schindler Hall remodel. All of that was supported by the Governor and the legislature. So while people may always ask for more funding, we've had significant support from this state and from this Governor on funding. And I think that's important to recognize. And also it has come at a time when nationally everyone is trying to do something about student debt and not just have these dramatic price increases in tuition become unbearable and then we wake up ten, fifteen years from now and say why do we have this monster student debt going on? So I think it all goes hand-in-hand.

Yepsen: So when you see bills like she was talking about, that's just one or two legislators popping off? I've watched the state universities my whole life and there has never been a time when there isn't a few legislators who are upset about something going on, on campus. Is that what's happening here?

Rastetter: The reality is, and we have weekly legislative calls, and the reality is everyone just on some of those bills needs to take a deep breath and some of those legislators hear from me that that's not a brilliant bill and it might even be a stupid bill. But, you know what, they have the right to do that. And we don't have the right to control that. So we'll all just deal with that and we'll have reasonable conversations. Kay, you saw me at the legislature the other day, I was kind of excited about a couple of things as I didn't agree with a couple of those bills. But, you know what, they know that we can have that kind of dialogue and I can disagree with them. So that's our system. And it works pretty well.

Obradovich: And by excited you mean mad?

Rastetter: On occasion. But I get over it.

Obradovich: One of the messages that people like me took from the last election was that rural America feels like they have been left out of this economy. How do state universities help rural America with the concerns that they have looking at the overall economy?

Rastetter: In coming from rural Iowa and having grown up there and gone back, they have been left out of the economy. You can only have to drive around, and it's true in the Midwest, and I think that's one of the reasons we had the election results, the decline in our rural communities because of loss of manufacturing jobs and the trade deficits has destroyed a lot of rural communities. You see it in the public school system, you see it in the communities on job creation and the quality of life. And I think that's really unfortunate. So I think the public universities have a real role with that of making sure that Iowa State Extension, that the Research Park in Ames, does things in the cultivation corridor that create high quality jobs in Iowa and not just the Des Moines corridor but all over Iowa. I think the University of Iowa has a great role in health care, at reaching out to rural hospitals that don't have the quality of doctors and quality of health care that the University of Iowa Hospitals and Clinics does. So there is a variety of things that can be done with two of the nation's largest research institutions and a great education business school institution in UNI.

Obradovich: Does something have to happen or is this something that is really going on already?

Rastetter: I think it's something that the Board has emphasized over the last years and I'd like to think that we've done a good job, the presidents have responded with that. We hear it in rural Iowa everywhere that that's happening.

Henderson: Speaking of the presidents, you have a new UNI president starting. What are his marching orders?

Rastetter: I think his marching orders are to re-establish the College of Education at UNI as the preeminent college of education in the state, in the Midwest. It's an important part, 70% of Iowa teachers graduate from there. I think the other aspect is to make sure that it grows and diversifies its student body, it has been extremely dependent upon in-state students where challenging state budgets become a problem and also continuing to work with and collaborate with the other two universities. Iowa State has a two plus two program in engineering. College of Agriculture is developing programs there that make sense for UNI, make sense to alleviate some of the growth at Iowa State and balancing that. But I think it is to establish UNI's identity, it's to fix the budget model.

Henderson: What has ever happened to that? There was much discussion about recalibrating the way that money is distributed from the state to Iowa State, U of I and UNI.

Rastetter: I think one of the recognitions of that, that the legislature has had, is we have about a $10.5 million increase in UNI's budget of special appropriations. Some of that was recurring appropriations, some of it wasn't, but the majority of it was. This year we're asking for another $2.5 million. UNI has room to grow a couple thousand students and so it can do that. And we have engagement of the faculty there, they're recruiting students and we see good things happening and that enrollment change is happening every day there.

Yepsen: I want to ask you about another money issue and that involves the athletics department. Shouldn't the athletics departments at Iowa State and Iowa be putting some money back into the general university to take care of some of these budget cuts that you're having to make? The football programs and the basketball programs, they make money. And isn't it time for those entities to start taking care of the motherships?

Rastetter: I think that one of the things that isn't often recognized, David, is the athletic departments do contribute to the university in a significant way. First of all, they pay scholarship dollars on tuition, room and board to the university. Second, it becomes a huge fundraising opportunity at the universities to bring alums, donors in that results in significant investment in the university. And too there is a trend going on nationally on athletic departments reinvesting in the university in certain ways to do that. And I know those discussions, of instance, are going on at the University of Iowa. President Harreld and Gary Barta are having those and I think you'll see that happen.

Yepsen: Well, what have you got in mind?

Rastetter: I think there are ways that it can help enhance student body, lower student fees, scholarship funds beyond that. But at the end of the day they need to be careful that they not limit their ability to compete by taking too many dollars and then they won't have the revenue stream to give the dollars. I think that's happening today.

Yepsen: What do you say to people who look at those salaries that some of those coaches make and say, this is ridiculous in a state like Iowa to have people making that kind of money, we have our priorities mixed up.

Rastetter: Well, the reality is, where those salaries are in play it is not state tax dollars, it's not tuition dollars, it's all either ticket dollars or it's donor dollars. And to be competitive nationally sure you can pay less and when you lose those people won't be very happy.

Henderson: What should be the priority, Friday night football in hometown Iowa or Friday night football at the University of Iowa?

Rastetter: That was one of those bills I thought you were talking about earlier.

Obradovich: Was that one of the stupid bills?

Rastetter: We have said that wasn't on the list of stupid bills, but it is something that's important and Friday night football is but also in that situation the University of Iowa is part of the Big Ten. If the Big Ten is going to have Friday night games, the University of Iowa probably needs to do that. What we said is that is an athletic decision, not a Board of Regents decision.

Yepsen: We've got to leave it there. Thank you very much, Mr. Rastetter, for being with us out here.

Rastetter: Thank you.

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

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Funding for Iowa Press was provided by Friends, the Iowa PBS 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.

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