Iowa lawmakers drop lawsuit over governor's illegal fund transfer

Catching up on news overshadowed by the biggest Iowa politics story of the week: on May 23 a group of Iowa House Democrats dropped their legal challenge to Governor Kim Reynolds’ use of emergency funds without legislative approval last September. Reynolds transferred $13 million from the Iowa Economic Emergency Fund to cover a shortfall in the fiscal 2017 budget, despite a warning from State Treasurer Michael Fitzgerald that Iowa law did not permit that action.

State Representative Chris Hall, the ranking Democrat on the Iowa House Appropriations Committee, filed suit in January, charging that Reynolds and Department of Management Director David Roederer “conspired together to unlawfully appropriate and misuse state funds.” The lawsuit alleged that the governor acted unilaterally in order to avoid the political fallout from calling the legislature back for a special session. House Democrats Marti Anderson, Liz Bennett, Bruce Hunter, Jerry Kearns, Monica Kurth, and Amy Nielsen joined the legal action a few weeks later.

Republican legislators tacitly acknowledged that Reynolds broke the law. They added language to a bill cutting current-year spending that retroactively legalized the governor’s action and appropriated $13 million from the emergency fund to the general fund for fiscal year 2017. (See page 8 of Senate File 2117, which both chambers passed along party lines in March.)

“Our legal challenge held Governor Reynolds and Republicans accountable, and it did so without costing taxpayers a single dime,” Hall said in a news release enclosed in full below. “We have seen too many cover ups and not enough leadership from the Reynolds administration. This is a victory for taxpayers and ensures that our tax dollars will be spent according to the law.”

UPDATE: I should have mentioned that there would be little to gain by following through with this lawsuit. Once the legislature passed and Reynolds signed Senate File 2117, a court would almost certainly have dismissed the case as moot.

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Lawsuit claims Iowa governor illegally transferred state funds (updated)

State Representative Chris Hall filed a lawsuit today, charging Governor Kim Reynolds and Department of Management Director David Roederer “conspired together to unlawfully appropriate and misuse state funds.” The ranking Democrat on the Iowa House Appropriations Committee is seeking to void “all actions taken as a result of the unlawful Official Proclamation signed on September 28, 2017,” which transferred $13 million from the Iowa Economic Emergency Fund.

That order allowed Reynolds to cover a projected budget shortfall at the end of fiscal year 2017 without calling a special legislative session. But State Treasurer Michael Fitzgerald warned the governor that the planned transfer “would not be in compliance with Iowa law.” Hall’s petition, enclosed in full below, points to the same Iowa Code provision Fitzgerald cited in his letter to the governor.

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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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Weekend open thread: Short-sighted elected officials edition

Who knew that when you tell a state agency leader to save another $1.3 million somehow, he might cut some important programs and services? Not State Representative Dave Heaton, the Republican chair of the Iowa legislature’s Health and Human Services Appropriations Subcommittee.

Who knew that when you impeach a mayor using a kangaroo court proceeding, a judge might order the mayor reinstated while her appeal is pending? Not Muscatine City Council members.

Follow me after the jump for more on those stories. This is an open thread: all topics welcome.

I’m also interested to know what readers think about Iowa Insurance Commissioner Doug Ommen’s request to waive certain provisions of the Affordable Care Act in order to bring Wellmark Blue Cross/Blue Shield back to Iowa’s individual insurance market for 2018. Elements of the “stopgap” measure violate federal law; health care law expert Timothy Jost told the Des Moines Register’s Tony Leys that some parts of Ommen’s proposal are “extremely problematic” and not likely “doable.” Writing in the Wall Street Journal, Anna Wilde Mathews and Louise Radnofsky saw the Iowa developments as “a key test of the ability to modify the [Affordable Care Act] through executive authority.” Slate’s Jordan Weissmann agreed.

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Higher education, human services take biggest hit in final Branstad budget cuts

Governor Terry Branstad’s budget director has finally revealed how $11.5 million in “miscellaneous” spending cuts will be spread around state government before the end of the current fiscal year on June 30. As expected, the ax will fall most heavily on higher education and human services–just like Branstad wanted all along.

Elected officials often bury bad news in a late Friday afternoon dump, but Branstad and Lieutenant Governor Kim Reynolds went one step further to evade accountability: they didn’t even announce the cuts in a press release. Rather, at around 4:00 pm, Department of Management Director David Roederer relayed the news in a letter to the Iowa House chief clerk and the secretary of the Iowa Senate.

Iowa House and Senate Republicans have plausible deniability after calling for $11.5 million in unspecified “Department Operational Reductions” as part of Senate File 130, the “deappropriations” bill GOP lawmakers approved in late January. Let Roederer do the dirty work.

After the jump I’ve posted the document showing how much the latest cuts will affect each department or agency. For comparison, I also enclosed Branstad’s original spending cut proposal, announced January 10, and a document comparing those planned cuts with the deappropriations bill’s provisions.

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3,000 University of Iowa students will pay the price for Republican budget policies

See important update below: Jon Muller questions whether the University of Iowa “committed an act of scholarship fraud.”

Three weeks after Governor Terry Branstad signed into law large mid-year budget cuts for Iowa’s state universities, some 3,015 incoming or current students at the University of Iowa learned that they will be picking up part of the tab.

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