Sparks fly in Iowa Senate as Republicans pass mid-year budget cuts

Matt Chapman, who closely follows legislative happenings, reports on an Iowa Senate debate you can watch beginning at 8:19:30 on this video. -promoted by desmoinesdem

The March 21 debate on Senate File 2117 started off with a bang.

This “de-appropriations” bill contains $35.5 million in spending cuts for the current fiscal year, which ends on June 30. State revenues haven’t kept up with projections lawmakers used when adopting the budget during the 2017 legislative session.

The Senate approved a version of this bill along party lines in early February. House Republicans let it sit for a month, waiting for new revenue estimates. Those showed more money coming in, largely due to the federal tax bill Congressional Republicans passed in December.

House Republicans amended Senate File 2117 before passing it in a party-line vote on March 20. The new language reduced some of the spending cuts and would retroactively make Governor Kim Reynolds’ transfer of emergency funds last September legal. State Treasurer Michael Fitzgerald had warned that the governor “would not be in compliance with Iowa law” if she balanced the 2017 budget in that manner without legislative approval. Democratic State Representative Chris Hall filed a lawsuit in January charging that Reynolds and Department of Management Director David Roederer “conspired together to unlawfully appropriate and misuse state funds.”

Because the de-appropriations bill changed in the House, the legislation had to clear the Senate again before going to the governor. Appropriations Committee Chair Charles Schneider floor managed the bill, expressing support for the amended version.

Other senators offered two amendments to the amendment. The first came from Democratic Senator Herman Quirmbach and would restore $500,000 in funding for community colleges, which are “central to the success of job training efforts in the Future Ready Iowa program.” After Quirmbach’s opening comments (starting at 8:23:00), Schneider encouraged a no vote, saying the cut to community colleges was less than originally proposed and that Future Ready would be funded separately in the fiscal year 2019 budget.

Quirmbach countered that he had expected Schneider to ask where the $500,000 would come from to res. “Well, actually, the answer’s easy”: when Majority Leader Bill Dix “left in disgrace last week,” he left about $500,000 in his campaign fund. Quirmbach thought that would be a good down payment on the $1.75 million settlement of a former Senate GOP staffer’s sexual harassment lawsuit, which Iowa taxpayers covered. Republican Senator Rick Bertrand called an immediate point of order: “Let’s just stay on the bill.”

After returning from the well, Quirmbach asked Republicans to raise the money to pay back the taxpayers and not leave community college students on the hook for the bad behavior that prompted the sexual harassment lawsuit. Senators defeated the amendment along party lines, with all 20 Democrats and independent Senator David Johnson supporting it and all 28 Republicans voting against.

Johnson offered the second amendment, which would strike the language retroactively legalizing the governor’s September 2017 transfer of $13 million dollars from the economic emergency fund to the general fund.

Schneider spoke against Johnson’s proposal, saying lawmakers needed to “clean up” Iowa Code on circumstances allowing the governor to transfer emergency funds. He characterized the Democratic legislators’ lawsuit as “frivolous.”

Democratic Senator Rob Hogg rose to support Johnson’s amendment (beginning at 8:32:20). Hogg pointed out that the Senate hadn’t voted for this language before the governor moved money out of the economic emergency fund. “This amendment goes in like laser surgery” on the $13 million Reynolds transferred without authority.

She did it to avoid what she considered the embarrassment of a special session. This is about the legislative branch standing up for the legislative branch against the overreach of an executive who by executive order tried to do something she was not legally entitled to do. […]

In January, Representative Hall had the courage to stand up and sue to defend the legislature. None of the Republicans stepped up to defend the legislature, and now you’re just trying to sweep it under the rug. This issue deserves debate and consideration, and we should not be a rubber stamp for illegal acts of Governor Reynolds. […]

Is it going to be the policy of the majority party that when Governor Reynolds does something illegal, you’re just going to sweep it under the rug and let her get away with it, retroactively legalizing what she’s done? I think that’s a very bad place for the legislature to be at. I think what you need to do is let the legal process take its course. […]

During his closing remarks for his amendment, Johnson asked Schneider to yield. He asked Schneider if the language allowing unilateral transfers by the governor protected taxpayers. Schneider got a little combative, calling it a waste of money to call the legislature back into session. He questioned why the state should spend money defending against a frivolous lawsuit, when “we can clear it up.” Who says it’s frivolous, Johnson wanted to know. Schneider settled on an “unnecessary” lawsuit and said it would be better to close what he called a “loophole” in state law.

During the contentious exchange, Johnson asked why we didn’t have a special legislative session to approve the fund transfer. Schneider replied that it would be a waste of money and that the way the Iowa Code was written, we would need a special session to legislate a $1,000 shortfall. He claimed that the language in the bill would set a threshold where the governor could transfer these funds.

Senator Johnson asked him if he was covering up for the Governor and Schneider just talked past Johnson until he twice called a point of order. At one-point Johnson stated he was asking the questions and Schneider told him he just didn’t like the answers while still talking over him. At that point Johnson gave up, since a conversation wasn’t possible.

He finished by saying,

It’s obvious why we’re doing this, Senator Schneider, we’re bailing out the governor. How embarrassing would it be if we had to come back and fix the budget again? […]

I think that we all know what’s happening here. […] We’re covering up for the governor. That’s all it is. […]

I would encourage the Senate, let’s take charge of our authority, and vote for amendment 5174 to Senate amendment 5172, and send a message downstairs [to the governor’s office], send a message downstairs that we are going to act like the Senate that our constitutional drafters meant it to be.

Johnson’s amendment went down by 29 votes to 20.

Schneider then made closing comments on the manager’s amendment, which passed by voice vote.

Now it gets confusing.

Senate President Pro Tempore Jerry Behn was presiding over the evening session on March 21, because newly-selected Senate President Schneider was floor managing the de-appropriations bill. Behn should have given the Senate an opportunity for closing comments, but he failed to do so. After going to the well to point this out, several Democrats had the opportunity to give closing comments (beginning at 8:48:50.

Democratic Senator Tod Bowman spoke first, discussing how these cuts would raise college tuition for already struggling students.

Senator Amanda Ragan then spoke about the Drug Courts in Iowa and how cuts to the judicial system would negatively affect that program.

Senator Nate Boulton commented how we could have avoided this legislation, and how cuts last year shut down facilities that housed over four hundred prisoners, causing overcrowding. It also had the effect of cutting staff to dangerous levels. Some cuts in these areas:

• $3.4 million from corrections
• $1.6 million from courts
• $200,000 from public safety
• $4.3 million from the Department of Human Services

Senator Joe Bolkcom told Schneider, “If Iowa is in such good financial shape as you indicated, it is being extraordinarily mismanaged by statehouse Republicans and Governor Reynolds.” He noted that less than 100 days are left in fiscal year 2018 to incorporate these cuts. He also dwelled on the problems that reduced appropriations have created for the University of Iowa and Iowa State University, which are “economic engines” for the state. (The de-appropriations bill cuts those universities’ current-year funding by $11 million.)

Senator Chaz Allen, whose district includes the Newton Correctional Facility, touched on the impact of spending cuts to corrections. He pointed out that there were 120 prison assaults in Iowa during the last two years, with an already thinly stretched staff and an extremely overcrowded facility.

Not happy with the way the debate played out, Schneider simply stated he already made closing comments and moved the bill.

The final vote on Senate File 2117 was 28 to 21, along party lines.

UPDATE from desmoinesdem: I sought comment on this bill from Gary Dickey, the attorney representing the lawmakers who challenged the governor’s fund transfer. He replied on March 23,

1. This confirms that Governor Reynolds broke the law when she transferred $13 million in 2017 from the economic emergency fund. As we have said all along, the lawsuit is not about politics. It is about upholding the rule of law.

2. It also undercuts the fanciful argument that Governor Reynolds complied with the “spirit” or “intent” of the law. Section 8.55 as it exists now limits transfers to situations involving bona fide economic emergencies determined by unexpected changes in the Revenue Estimating Conference projections.

3. This fundamentally changes the economic emergency fund as a fiscal management tool for dealing with unexpected emergencies into line of credit for the Governor.

4. I don’t think it moots our lawsuit. It’s the type of statutory violation that is capable of repetition but will evade review because judicial relief does not occur quickly enough to precede legislative ratification. So we may ask the lawsuit continue so that Governors going forward understand they cannot knowingly break the law knowing they will be bailed out by the General Assembly.

LATER UPDATE: Reynolds signed this bill into law on March 28. She did not use her item veto power to remove any of the spending cuts.

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