Iowa budget disaster likely to force special legislative session

Governor Kim Reynolds appears unlikely to be able to balance Iowa’s budget for the fiscal year that just ended without calling a special legislative session. The last time Iowa lawmakers needed to come back after adjournment to fix the budget was in 2002, when the country was in a recession that had begun the previous year.

This year’s huge revenue shortfalls are happening during a time of economic expansion, the result of overly optimistic planning and business tax breaks that turned out to be much more costly than officials predicted.

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Auditor Mary Mosiman vouches for "stable" and "responsible" budget

Sounding more like a Republican loyalist than a hard-nosed fiscal analyst, State Auditor Mary Mosiman told reporters this week that Iowa’s budget for the year beginning July 1 is “stable” and “responsible.”

Mosiman also asserted that Iowa has “practically eliminated using one-time revenue sources for ongoing expenditures,” even though Governor Kim Reynolds recently confirmed the state will need to dip into reserve funds a second time to cover a third major revenue shortfall during the current fiscal year.

While speculating on why Iowa’s revenues have fallen well below projections, Mosiman echoed excuses offered by leading Republican politicians, ignoring a new business tax break that has been a far more important factor.

Iowa’s self-styled “Taxpayers Watchdog” may come to regret staking her credibility on the wisdom of GOP budget planning.

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Iowa attorney general: Outside counsel should defend collective bargaining law

To “avoid any questions about a potential conflict,” Iowa Attorney General Tom Miller will request that outside legal counsel defend the state against a public employee union’s legal challenge to Iowa’s new collective bargaining law. AFSCME, the largest labor union representing state workers, and four of its members filed suit on February 20, charging that House File 291 violates Iowa constitutional provisions on equal protection and non-interference in contracts. In a statement I enclose in full below, Miller said he will ask the Iowa Executive Council to approve other counsel for this case, because “the new collective bargaining law has the potential to existentially threaten the viability of public sector unions,” which have supported him in past campaigns.

The council is likely to approve Miller’s request. Its five members are Governor Terry Branstad, Secretary of State Paul Pate, State Treasurer Mike Fitzgerald, Secretary of Agriculture Bill Northey, and State Auditor Mary Mosiman. Branstad’s spokesperson Ben Hammes told Barbara Rodriguez of the Associated Press, “[Miller] summed it up when he said that AFSCME had supported him in the past and he wants to avoid any questions about a potential conflict.”

The Attorney General’s Office defended the Branstad administration against a lawsuit challenging the closure of the Iowa Juvenile Home, for which AFSCME Iowa Council 61 President Danny Homan was a plaintiff. But outside counsel defended the state when Democratic lawmakers and Homan challenged the governor’s use of line-item vetoes to close Iowa Workforce Development offices.

Miller may need to ask outside counsel to be appointed if other labor unions and public employees file additional lawsuits challenging the collective bargaining law. Aside from the points raised by AFSCME, several other provisions may raise constitutional questions:

• The law bans automatic payroll deductions for labor union dues, while allowing such deductions to continue for professional association memberships or recurring charitable contributions.

• The law may violate free association rights by requiring unions to win a majority of all eligible voters, not just those who cast ballots, in order to stay certified.

• The law eliminates a quid pro quo contained in the first paragraph of Chapter 20, which could be seen as a due process violation.

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Twelve holes in the internal ISU Flight Service audit

The Iowa Board of Regents gave Iowa State University President Steven Leath a well-choreographed vote of confidence on Monday. First, Chief Audit Executive Todd Stewart took the board through highlights from his team’s review of ISU’s Flight Service, noting the “full cooperation” provided by ISU staff. Then a contrite yet defensive Leath took the floor. Still insisting he did not violate any policies or laws, the president admitted he could have shown “better judgment” and said he is “very sorry” about “things I should have done differently.” In particular, he “used the university planes more frequently than was absolutely necessary, and should have been more transparent about some of the use.” He promised to be “more thoughtful” and learn from this experience. The 12-page auditor’s report and full statement from Leath are enclosed at the end of this post.

Regent Larry McKibben was up next to thank Leath for his leadership and contribution to positive trends at ISU, adding that he hopes for more “great things” during the next five years. The chair of the Regents’ audit committee has never viewed what he called a “ding on an airplane wing” as grounds to change his opinion of Leath. His remarks before the regents went into closed session signaled that the overseers would neither fire nor severely sanction the ISU president.

After board members evaluated Leath’s performance, Board President Bruce Rastetter asserted that Leath had “eliminate[d] any questions about the personal benefit that he may have received by using the university aircraft,” having reimbursed the ISU Foundation for costs associated with some flights. He went on to say,

“Clearly, President Leath’s acknowledgment that he takes full responsibility for the issues identified in the audit and that he should have been more transparent about the use of the planes reassures this board, and I hope all Iowans, that the president deserves our continued trust and support,” Rastetter said. “Furthermore, the board believes the audit has put to rest any concerns about President Leath’s use of the aircraft.”

This Iowan is not reassured. The audit has big holes and failed to fully account for costs of Leath’s airplane habit.

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State auditor and Board of Regents looking more deeply into ISU airplane use

Iowa State University President Steven Leath continues to insist his use of university aircraft violated no policies or laws.

We’ll learn more in the coming months, because the State Auditor’s Office is looking into the matter, and yesterday the Iowa Board of Regents approved a plan to audit every ISU Flight Service flight since Leath was hired in 2012.

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