Iowa Senate President Jack Whitver

Jan 26, 2018  | 27 min  | Ep 4521 | Podcast | Transcript

Podcast

Weeks into a new legislative session and various issues are already percolating to the top for lawmakers. We sit down with Iowa Senate President Jack Whitver for an update on this 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 PBS, this is the Friday, January 26 edition of Iowa Press. Here is David Yepsen.

Yepsen: After the initial weeks of the legislative session in Des Moines the first round of political posturing has often run its course. Some issues, like water quality, are already on their way to the Governor's desk, while others, like our state's budget, are far from settled. In search of some legislative clarity we're joined by Ankeny republican and President of the Iowa Senate Jack Whitver. Senator, welcome back. Good to have you with us again.

Whitver: Thank you.

Yepsen: Also joining us are Statehouse reporters James Lynch, he writes for the Gazette and Kay Henderson is News Director at Radio Iowa.

Henderson: Senator, this week Senate republicans unveiled a plan to cut $52 million from the current year's state budget for the remaining five months of the fiscal year. How will Iowans see those cuts?

Whitver: Well, as you know, we must have a balanced budget in the state of Iowa. It's part of our state law to be at 99% and I think Iowans expect us to have a balanced budget. When we left session last April we passed a budget that had about $100 million surplus for the current year. When the REC, which is the Revenue Estimating Conference, came back in December they showed that we no longer had that $100 million but we were also $35 million short. And so I believe Iowans expect us to make tough decisions. In reality it's only about 0.6% of our overall state budget. And so I think Iowans expect us to make those adjustments as needed.

Henderson: We want to talk about some of the specific cuts. Let's start with the cut to the courts. The courts have responded and said a cut of that magnitude will lead the closure of 30 county courthouses indefinitely. How do you think that will impact the justice system in Iowa?

Whitver: Well, we have, when we crafted that bill we tried to give as much flexibility as we possibly could to the administration of each department. And so we're going to let them implement the cuts where they think they can affect as few Iowans as possible. And that is going to be up to the individual directors.

Lynch: One of the other cuts in your proposal is a $19 million cut to the three Regents universities, and that is four times what the Governor recommended in her deappropriations plan. Are Iowans going to be happy with that sort of a cut? Tuition is expected to go up at least 7%. You mentioned you're saving for college education for your children. Can you put away another 7%?

Whitver: Well, the reality is we must have a balanced budget and so we have to find where we can make those types of adjustments. We decided to take K-12 education off the table, like we did last year in the midst of an even bigger budget issue. We didn't touch K-12 education. We made that same decision this year. Then you have things like Medicaid that take up 20% of our budget that we also decided not to make any adjustments there. And so you're left with limited options and the Regents is another big part of our budget. In reality the University of Iowa's entire general fund is over $200 million so you're looking at a 3% to 4% cut. I'm hopeful that the Regents and the administration can work on those issues without affecting the students.

Lynch: When you're making cuts like this, Senator, should anything be off the table? Or should everybody feel the pain?

Whitver: Well, I think what you see is a difference between how republicans are managing the situation and how democrats did seven, eight years ago when Governor Culver was here. They decided to make an across-the-board cut that affected everybody, K-12, prisons, state troopers, everything. We have tried to take a more measured approach. We had our appropriations chair Charles Schneider who did a fabulous job of really analyzing the line items, trying to make major cuts so that we can affect as few Iowans as possible.

Henderson: You are proposing a nearly $5.5 million cut to the 15 are community colleges. Does that square with the rhetoric from all sides of the legislature that Iowa needs to build its skilled workforce and enhance that kind of training that is often available only at the community college level?

Whitver: Well, again, we have given the community college presidents the flexibility to find those efficiencies. When you break it down per community college a $5 million adjustment is about $300,000 on average, it differs depending on how big that university is, or that community college is. But we have given them that flexibility. There are a lot of other programs that we have within state government that deal with the job training and skilled workforce that those were not affected by them.

Yepsen: How many layoffs are you going to have here, Senator?

Whitver: Hopefully the administration will have the flexibility to find another efficiencies and we won't have to see that.

Yepsen: But, Senator, you're talking about cutting a budget, yes it's a small amount, but it's a lot when it's only a few more months left in the fiscal year. Do you think it's at all possible for these agencies to enact these cuts without having to lay off state workers?

Whitver: I think layoffs should be the last option. And so they're going to have to look at everything and come back with their best proposals.

Yepsen: But have you gotten any estimates at all about what this could mean?

Whitver: Yeah, we have been talking with each department since December when that REC estimate came out. We've been talking with all the different parts of state government and we have given them a heads up on where we want to go. We think it's important for us as a legislature to leave a cushion still. And the Governor recommended about $35 million in adjustments, our bill did $52 million, and the reason we went bigger was because not too long ago just last session we cut in January and then we had to come back in March and had to cut again. Iowans expect us to balance this budget and so we have to make these tough decisions.

Henderson: You are proposing a $9.9 million cut to the Department of Human Services amidst discussion about child protection workers and a discussion about the state's Medicaid program, which provides insurance to poor, disabled and elderly Iowans. Where do you expect those cuts to be made in the department?

Whitver: Well, the department is a massive entity. There are suggestions that we should have cut Medicaid. I think that was in the Governor's proposal. Between the House and the Senate as a legislature we decided with some of the issues going on with Medicaid right now to not make that cut to Medicaid. So, again, it's a massive organization. I have a lot of faith in Director Foxhoven. I have known him for several years since I was at Drake Law School, he is a very competent and talented man, and we expect him to make those cuts where he thinks they can absorb them the best.

Henderson: So does that mean the closure of another institution, like a mental health institution?

Whitver: I don't expect that, no.

Yepsen: What do you expect?

Whitver: Well, we're working with him on that right now. And he has brought forward ideas, he has come in to testify in the Senate almost weekly, and so we'll continue to work with him on that.

Yepsen: Senator, it's hard for me to understand that the legislature would be contemplating things like this without having some understanding from the department heads about just what it's going to mean. You have no idea, like at DHS, what that -- he hasn't indicated to you what that's going to mean?

Whitver: He's still working out the details but our appropriations chair, Charles Schneider, has been working very closely with these department heads.

Lynch: I think probably even republicans would agree that in the last few years the legislature has cut the fat, a lot of fat, from the state budget and maybe now you're down to cutting meat from the budget. And republicans have long talked about smaller government. Are you in a position now where you're really creating smaller government through budget cuts, that you're shrinking the size of government, which is a longtime goal for republicans?

Whitver: I think the size of government has shrunk since Governor Branstad took over in 2011. I think the next step we have to look at is are all these departments that we have really necessary? Some of them have been around for decades and decades and decades. Are they really necessary? Or do we need to keep putting more money where it's the most useful and get rid of some departments that aren't? Those are conversations that you don't have in the middle of the year, in the middle of a deappropriation, but I'm sure those conversations will be had as we look at the next few years of budgets.

Lynch: You talked at one time about looking at the organization of the Regents and whether or not some changes had to be made there. Now it sounds like you're suggesting looking at the entire state operation, a reorganization of state government, which has happened a few times in my memory and it doesn't seem the government is that much smaller. Is this just rhetoric?

Whitver: I don't think you're going to see a reorganization of government this year, no. We have other priorities that the Governor laid out between taxes and water quality and the skilled workforce --

Lynch: Aren't there always other priorities?

Whitver: Yeah, but a reorganization of government is a difficult thing to do. It takes a lot of preparation and we didn't come into this session with that as a priority. And so I think at some point we do need to look at that.

Lynch: How do you do that? There's always turnover in the legislature, there's changes in leadership. How do you make that preparation and then carry out a reorganization study?

Whitver: Well, it really has to be, first of all, it has to be a joint priority of the Governor, the House and the Senate. If that's not the case it's going to be hard to do. It largely has to come from the executive branch. But, like I said, this year our priorities have been water quality, taxes, skilled workforce, that's what we're going to focus on the most this year.

Yepsen: Senator, is this just a form of kicking the can down the road? James, I've been around for a few reorganizations and you get into specifics and you make a lot of people mad. Is this just too hot for the legislature to handle in an election year?

Whitver: Well, like I said, it's not a priority for this year so we're not going to look at it this year. But what I think Iowans expect us to do is to manage their tax dollars the best way possible. If we're not looking at all the different areas of state government at least every year or every few years we're not doing our job. And so that is what Iowans expect us to do.

Yepsen: I understand that. But do you have any idea out there which departments you'd like to see merged? Do we need this many counties? Do we need this many courthouses? Do we need this many community colleges? Those are tough, hot questions that politicians don't like to deal with in an election year.

Whitver: I think that's an answer that you need after you have that commitment to really focus on it and take a whole off session to work on it.

Lynch: You said it takes a joint commitment by the Governor and the legislature. Republicans have complete control this year, we don't know about the future. So isn't this the year to do that?

Whitver: We've had a big, on the 2016 campaign trail we promised a lot of things and we have largely delivered on almost every single one of those. And so it's not like we haven't done anything the last couple of years. I think anyone that has been around the Capitol or Iowa politics has said this is one of the most historic general assemblies they've ever seen. And so it's a matter of keeping those promises to the voters that we made in 2016.

Lynch: One of the areas of state government that has been in the news recently is the ICN, the Iowa Communications Network, and not in a good way recently. Given what has gone on there and given the changes in technology, is it time to just pull the plug on the ICN and turn it off?

Whitver: Yeah, one of my first years in the legislature we actually voted to try to sell the ICN. That was unsuccessful. But there obviously needs to be changes there and that might be a good example of what we're talking about. We now have a chief information officer in the state of Iowa that we didn't have even eight years ago or ten years ago. Maybe the ICN should go to his office if we can't sell it.

Yepsen: Well, there are some people who say you shouldn't sell it because all you would do would be to give it to some other entity to compete with local telephone companies. Why not let local governments, state agencies, buy their communications services in the private sector just like they buy their paper and pencils?

Whitver: Well, they should. Right now we're mandating certain entities to buy coverage from the ICN at a rate that is higher than the market rate. And so I don't think that's a good way to do business in the 21st century. Frankly the days of sitting in an ICN room, like when I was a kid at Grinnell, those days are over. You pull up your phone now and you have Face Time live. And so the world has changed and government needs to adopt to it.

Yepsen: But you see what I'm saying about you can't even sell it because you would be competing with the private sector. Aren't you, as James suggests, aren't you forced to just tape the ends of it?

Whitver: That might have to be the result.

Henderson: Is it worth anything?

Whitver: We put it up for sale and we did not get a bid that was sufficient. So the private sector has not come forward on that yet.

Henderson: David mentioned at the onset the water quality initiative. There was a debate in the Senate this past week about whether it was adequate, whether there are safeguards in there to measure progress. What would you say is the totality of the commitment of legislators to water quality? And do you plan to return to that issue before the session is over?

Whitver: When we took the majority last year we promised Iowans we would do big things, we would have big ideas, we would be bold and water quality is one of those things. It's an issue that will have an impact on Iowans for decades and decades and decades to come. That being said, the conversation on water quality isn't over with one bill. It's something that is always ongoing, we'll continue to look at it. I know there are suggestions that came out of the House that they want to continue to make improvements this year. We're very open to that. We don't lo at this as an issue that we passed a bill and everything is going to be great. There's always progress that can be made.

Henderson: Speaking of what's on your plate for the remainder of the session, looking ahead to next year, tax cuts. How deep do you want to cut individual income taxes?

Whitver: That has been my priority from day one. I think income tax reform this year and income tax reduction this year is necessary for our state. If you look at the states that are growing, you look at the states that are prospering, it is the states with the lowest or no income tax. Right now Iowa is the fifth highest income tax in the country. That's not acceptable. And there are some great economic indicators in our state right now. We're at 2.8% unemployment. But we're still not growing as fast as some other states. It's a competitive market out there between the states and if we don't keep up we're going to have troubles long-term and that is part of the reason our state revenues have not grown as much as we want. But we're excited about the possibility of income tax reform. In the Senate our focus has been on individual income tax reform as I mentioned last time I was on here because I think that's going to have the greatest impact. First of all, it's going to have an impact on every single taxpayer in the state of Iowa. But it also affects almost every single small business. What people don't understand is very few people pay a corporate income tax. Almost all the business, your local plumber, your local granite shop, your local hardware store, most of those pay an individual income tax. So if you really want to spur growth you help put money in the pockets of hardworking Iowans and you help small businesses and that's going to be our focus.

Yepsen: You may have answered this, you said tax reform and tax reduction. They're two separate things. If you take the tax issue and compare it, get federal deductibility out of there, our tax rate isn't that much out of line with other places. Right now it is because we have federal deductibility. So I gather you feel like federal deductibility has got to go as part of a tax reform effort?

Whitver: When we came into the tax reform conversation we made a commitment to the House, the Senate, to Iowans, that we would put everything on the table. We should look at everything to determine what is the best income tax code in the 21st century. A lot of these ideas have been around a long time, we should take a look at them. We should look at tax credits, we should look at exemptions, we should look at all of that if we're going to have a real reform of our tax code.

Yepsen: Do you have any idea for how much you want to cut taxes?

Whitver: That's to be determined, that is part of the negotiations that are ongoing. But we're excited for that. The last time taxes were cut back in '98 or '99 the state actually saw increased revenue. We're confident that we can see economic growth if we make tough decisions.

Henderson: Who is negotiating?

Whitver: We're working consistently with ways chairs, with the Governor, a lot of members have ideas. This is something we've talked about for a long time and I'm just excited for the first time in two decades we actually are having a real conversation about it. For so long the reason all these tax credit programs exist is for 20 years no one had the courage to actually address income taxes, so they give a tax credit to this group, or a tax credit to that group. They didn't have the courage to attack it in a holistic manner and that's what we're going to do.

Yepsen: Well, why don't you guys have the courage to tackle tax credits now in an election year? Are you worried about alienating --

Whitver: They're definitely on the table. Everything is on the table.

Yepsen: For this year?

Whitver: Well, in the upcoming, for the next year's budget, not in the deapprops bill. But when we do a tax reform we're going to look at all of those.

Yepsen: Senator, how can you do one, just mechanically, I get that you want to do it, but how do you do that when you don't know quite what the effect of this new federal tax law is going to be on the state?

Whitver: Yeah, that is something we're monitoring. But what we do know is because of the federal tax bill the state tax liability of Iowans is going to increase. We don't know how much that is but because of federal deductibility Iowans state taxes are going to go up. We don't want that to happen. And so we'll use that money that we're going to receive as a state as part of that tax plan.

Yepsen: And given how tight dollars are, and you're talking about making them even tighter, how can you even think about creating a grant voucher program for local schools?

Whitver: School choice is important to a lot of people in our caucus, there's a lot of bills out that are looking at school choice. It is one thing that is going to continue to go through the process and we'll see what the House is working on and see if there is any options there.

Yepsen: Do you think it will happen or not?

Whitver: It's way too early to make that prediction. I know one thing that I wouldn't mind taking a look at is in the federal tax bill they made the 529 plans that I'm saying for, for my children's college, they made that applicable to K-12. I think that's a fine idea to match what they've done at the federal level. And so there's a lot of different ideas out there but we're not far enough along to really address that.

Lynch: You mentioned tax credits being on the table and there was an effort in the House last year to start to look at that and everybody is talking about maybe capping or doing away with some of those credits at the same time, the state seems to be giving away tens of millions of dollars of tax credits to attract business. Is it possible to end those tax credits at this time and still do economic development?

Whitver: Well, I think right now there's about 42 or 43 different tax credits. They're all there for a reason, the legislature agreed to them, the Governor signed them over the last 40 years. Most of them have been done in the last 15 years. They're all put there for a reason. What we have to look at is are we getting results for the commitment we made? And so, again, we're going to look at all of them, we're going to try to get feedback from the different departments and from people that understand how these programs are working to see if they are and if they're not we should get rid of them. If they are working we should keep them.

Lynch: Do they do any good for most Iowans? If you cut tax credits or cap them am I going to notice any difference? Are the people around Iowa going to notice a change?

Whitver: Once you start looking at what the individual tax credits are there's one for teachers that pay for supplies out of their own pocket. That teacher will notice that. There's 42 different programs, some of them just like that. So some Iowans will notice that.

Henderson: What about the program whereby you write a check to certain businesses for research and development activity? And the poster child for that has always been Pioneer, which is now DuPont Pioneer, and Rockwell-Collins, both companies which have really changed circumstances in the past year. Is that something that will be examined, actually having the state write a check to a company?

Whitver: I think we will examine that. Those companies create a lot of good jobs but it's not just Rockwell and John Deere or Pioneer, it's startup companies, companies that use that refundability to help grow their business over the first year or two until they're really viable. I know in my district in Ankeny there are several ag-based new companies that are doing really great things. They're using that credit. Should it be refundable? That's a question that we should, that's a conversation we should be having.

Yepsen: Is there some way to write it so that you can take care of a business like that without worrying about DuPont --

Whitver: I think that's a definite possibility because a lot of those small companies, those startups, with some of our best innovation, they are the ones that really need that refundability.

Lynch: Before we leave the budget issues there are a lot of city and county elected officials anxiously awaiting a decision on the backfill, the property tax backfill. Are you going to maintain that this year and next year?

Whitver: In the deappropriation bill that we passed in the Senate, and I believe here is general agreement in the legislature, that we don't want to touch that for the current fiscal year. Those cities and counties have already certified their budgets. It would be very difficult for them to go back and change that. But I believe they should be on the table for the next few years. That was part of a tax reform bill we did three or four years ago to help tide over the cities and counties while those cuts were happening. Many places around the state have seen tremendous growth since then, both with assessments and with new buildings, and so I believe we should look at phasing that out over time.

Henderson: Do you go cold turkey? Or do you phase it out?

Whitver: That's to be determined. We're trying to work with our cities, I talk to my city mayor, our city council and have a conversation with them. We obviously don't want to do something that's going to be harmful. But ultimately that's $150 million that we're paying to the cities and counties that we'd like to phase out, I'd like to phase out.

Henderson: Okay, you're a lawyer --

Whitver: I am, not a very good one.

Henderson: This past week 20 of your democratic colleagues and the independent in the State Senate joined to draft a bill that said if a state employee is guilty of wrongdoing and there is a settlement of some sort that is paid out, the state of Iowa will immediately pay that, but then the Attorney General of the state of Iowa will go after that state employee and make them financially liable for that amount of money. Is that something republicans support?

Whitver: You know, sexual harassment has been at the forefront of in the media and the conversation of America, not just at the Statehouse, but almost every entity over the last several months. We have made a lot of progress, you've had Ambassador Kramer on here who we commissioned to help provide us with some suggestions. She has a long, great track record in the HR department as well as being Senate President, so she understands it. She brought us some ideas, she released those last Thursday. We have already begun to implement those. We have an HR Director that we just hired on Monday, that started on Monday. We have already went through our sexual harassment prevention training. We have also made every Senator, staff person, sign a statement of conduct so they understand the expectations at the Capitol. The next step in my opinion is going to be to work with our new HR Director and work with Senate Minority Leader Petersen on a bipartisan basis to redraft our personnel handbook. And that is my focus is trying to work with them. We have already met once to discuss it on a bipartisan solution for this.

Henderson: One of the things that came out of the report that the Secretary of the Senate wrote in August was that people were confused about what zero tolerance meant. Do you think people now know what zero tolerance means?

Whitver: I think people are starting to understand that. It's a conversation that has been healthy because it has changed a lot of behavior but we still have a ways to go.

Yepsen: Senator, I want to go back to Kay's question. I heard your position on sexual harassment, but she specifically asked you about the claw back, going after a state employee who is guilty of this. Any thoughts on that?

Whitver: Yeah, they filed their bill yesterday. I took a quick look at it but we assigned it to the labor committee, which deals with labor type issues, workplace issues. So it's something, we're going to have to vet that and see the concerns of other people and see where that goes and it will go through the normal process.

Yepsen: We've got just a couple of minutes left, Senator. We always like to talk politics. What is the effect of President Trump's unpopularity on republican chances in the legislature?

Whitver: Well, when we got elected in 2016 or when we campaigned we promised to do big things. We promised to be bold. And we have done that. And I believe the voters in 2018 are going to recognize the steps that we've made, the progress we've made and they're going to reward that bold action.

Yepsen: Are you ready for Marco Rubio to run again? You ran his last campaign.

Whitver: I have a lot of respect for Senator Rubio. We had a great time on the campaign trail and he's doing a fabulous job as Senator still.

Yepsen: Do you have any expectations though, seriously, about losing seats in the legislature? You're the party that holds the White House, it's 101 politics you do lose something in an off-year election.

Whitver: Yeah, I think right now the political world is changing so fast and it's so volatile, social media has a big part of that. You've seen generic ballots go from 18 to 5 in three weeks. It's way too early to tell how 2018 is going to turn out. Past leaders, Mike Gronstal used to say, the first year is for governing, the second year is for elections and campaigning. That's not how we're looking at this. Iowans expected us to come down and work for two years and get things done and that's what we're going to do. And so we'll worry about the elections when the session is over.

Yepsen: Alright, Senator, thank you very much for being here. We've run out of time.

Whitver: Thank you very much.

Yepsen: Look forward to having you back.

Whitver: Thank you.

Yepsen: And thank you for joining us. We'll be back with another edition of Iowa Press next week at our regular times, Friday night at 7:30 and Sunday at Noon on our main Iowa PBS channel with a rebroadcast on our .3 World channel Saturday morning at 8:30. For all of us here 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. 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.      

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