Iowa Citizens for Community Improvement filed the complaint after the Iowa Pharmacy Association failed to file a disclosure report for a function it held in February that was attended by 20 lawmakers and Gov. Chet Culver. The group only filed the paperwork after reporters began asking questions about the party due to the fact that Democratic state Rep. Kerry Burt attended the event on the evening of his drunk driving arrest.

The committee dismissed the complaint unanimously, although Senate Ethics Committee Chair Jack Kibbie said there would be a review of current Iowa code to see if changes should be made to improve accountability and transparency.

Before 2005, disclosure forms for these types of legislative functions were filed with the nonpartisan Iowa Ethics and Campaign Disclosure Board (IECDB). The board’s staff would also check the social calendar and call groups to make sure reports were filed on time.

The law was changed in 2005, and authority was given to legislative ethics committees. At that time, the IECDB discontinued the practice of ensuring the prompt filing of reports since it lost enforcement jurisdiction.

Since the law changed, the number of reports filed has gone down, from 101 in 206 to 90 this year.

The other difference, according to the state’s campaign law, is the IECDB can investigate an issue on its own motion. The legislative ethics committees do not have that power.

Section 68B.31 of Iowa’s campaign law lays out the powers, responsibilities and format of the legislative ethics committees. It can prepare rules relating to lobbyists and lobbying activities, issue non-binding advisory opinions interpreting the intent of constitutional and statutory provisions, recommend legislation and hear complaints against legislators or lobbyists.

“We expect Sen. Jack Kibbie to lead the charge to restore oversight and enforcement of lobbyist function reports to the Ethics and Campaign Disclosure Board,” Mason said.

Iowa CCI found 26 additional late-filing disclosure violations by lobbyist groups during the 2009 legislative session. This amount represents nearly one-third of the 90 reports that were filed in 2009.

In order to open a legislative investigation, a third party must file a formal ethics complaint.

This process has come under scrutiny of late after the Iowa Pharmacy Association failed to file a disclosure report for a function it held in February attended by 20 lawmakers and Gov. Chet Culver until after reporters began questions about the party – five months late.

Iowa law dictates that lobbyists file disclosure reports within five business days following the date of receptions they host during a legislative session where lawmakers are invited.

In response to the news that legislators are unable to initiate an investigation into violations of campaign law, Des Moines activist organization Iowa Citizens for Community Improvement announced Wednesday that they have filed a formal complaint against the Iowa Pharmacy Association with the chief clerk of the House and secretary of the Senate.

“We shouldn’t have to jump through this many hoops to get people to follow the law,” said Adam Mason, an organizer with Iowa CCI. “But legislators aren’t able to do it.”

Iowa CCI’s initial research has uncovered 26 additional late-filing disclosure violations by lobbyist groups during the 2009 legislative session. This amount represents nearly one-third of the 90 reports that were filed in 2009. Of those late reports, 11 were filed more than two months late, Mason said.

“We are also requesting this past sessions social calendar, so we can assess how many lobbyists and associations have not filed,” Mason said. “I’m sure we are going to find many more groups that haven’t filed, and we will look into filing complaints against those groups as well.”

Before 2005, forms were filed with the nonpartisan Iowa Ethics and Campaign Disclosure Board (IECDB). The board’s staff would also check the social calendar and call groups to make sure reports were filed on time.

The law was changed in 2005, giving authority to legislative ethics committees. At that time, the IECDB discontinued the practice of ensuring the prompt filing of reports, since it lost enforcement jurisdiction.

Since the law changed, the number of reports filed has gone down, from 101 in 206 to 90 this year.

The other difference, according to the state’s campaign law, is the IECDB can investigate an issue on its own motion, according to Charlie Smithson, the board’s executive director. The legislative ethics committees do not have that power.

Section 68B.31 of Iowa’s campaign law lays out the powers, responsibilities and format of the legislative ethics committees. It can prepare rules relating to lobbyists and lobbying activities, issue non-binding advisory opinions interpreting the intent of constitutional and statutory provisions, recommend legislation and hear complaints against legislators or lobbyists.

That means a third party would have to discover a violation to campaign law and file a complaint for a group to suffer any penalty for its indiscretion.

Mason called for the legislature to give oversight authority back to the IECDB, who he said did an admirable job of policing these events over the years.

“Right now its like the fox guarding the hen house,” he said. “It’s just crazy.”

In addition to returning authority to the IECDB, Mason’s group is calling for campaign contribution limits, public financing of elections and for tougher enforcement when a law is broken.

“We’re allowing lobbyists to wine and dine our lawmakers and basically buy influence,” Mason said.

The Iowa Constitution requires the state to balance its budget at the end of every fiscal year, and the governor can only transfer so much money out of the state’s cash reserves without approval from the legislature.

It remains unclear how large the budget deficit from fiscal year 2009 will be when the final numbers are available in September, but there is a chance that it will be too large for Culver to cover it with transfers on his own. That’s why some are predicting that he will have to call a special session, but so far, the governor has insisted that it will not be necessary.

Republicans, who are quick to accuse Democrats of spending recklessly, are clamoring for a triumphant, unscheduled return to the capitol this summer. Hoping that a special session would draw more attention to their attacks, GOP leaders have attempted to frame the debate so that if a special session becomes necessary, it will look like a Democratic admission of guilt. Culver’s emphatic resistance only serves to reinforce that perception.

Lost in the hyperbolic spin coming out of both sides in this debate is one simple fact: the budget shortfall is really neither party’s fault.

The nonpartisan Legislative Services Agency projected much higher revenue through the end of fiscal year 2009 than what the state ended up receiving. Democrats fulfilled their responsibilities in this year’s session by passing a budget that fit within official, nonpartisan estimates. That’s what they were supposed to do. At the time, the alternative would have been to assume that the experts’ revenue estimates were wrong and to make deeper cuts to state services than what might have been necessary.

That would have meant laying off state employees, closing courthouses for even more days, covering health care for fewer children, or even raising taxes. Those are things legislators should only do when they are absolutely necessary, and at the time, the numbers said they weren’t.

Bad budget estimates happen no matter which party holds the pursestrings. When former Gov. Tom Vilsack called a special session to balance the state’s budget in 2002, it had already received a stamp of approval from Republicans, who controlled the legislature.

Many of the Republicans now attacking Culver over this year’s budget were instrumental in passing the faulty budgets for fiscal years 2001 and 2002. I can only assume their press releases from back then were a little less vitriolic.

If those numbers prove accurate, Gov. Chet Culver could be forced to call a special legislative session in order to balance the state’s budget.

Gov. Chet Culver

Culver’s budget director Dick Oshlo did not agree with the LSA’s estimates, saying the state would only be facing a $58 million shortfall. Since the legislature left a $44 million balance when it adjourned, and Culver has the authority to transfer $50 million from the state’s rainy day fund, a special session will not be needed.

“While the state’s tax receipts deteriorated more than expected during the last two months of the fiscal year due to the ongoing effects of the national economic recession, this is a manageable number,” Oshlo said. “Fortunately, receipts improved during the final days of June. At this point we see no legitimate reason for a special session to balance the state’s budget.”

However, Oshlo’s figures are based on the state’s gross receipts, and “government operates on net receipts,” said David Swenson, an economist at Iowa State University.

“In effect [the Department of] Management is counting all of its deposits but, at least for the short term here, not pending obligations,” he said. “It is in my view budgetary hocus pocus. Now you see an unbalanced budget, now you don’t.”

Ultimately, the state is looking at a $161 million problem, Swenson said, because gross receipts are down $58 million, net refunds are up $72 million and there is an additional $31 million in school infrastructure payments that must come out of FY2009.

The governor’s office was quick to point out that the reason gross receipts were used was because they are the only real numbers that currently exist. The LSA’s figures are just estimates, and true net receipts won’t be known until September when the Department of Management closes the books on the fiscal year 2009 budget.

There is also revenue that will be collected within the next 90 days but allocated to the fiscal year that ended Tuesday, money that will improve the state’s financial situation and is not included in the LSA projections.

Culver Press Secretary Troy Price told the Iowa Independent last month that until accruals, expenditures and refunds are all taken into account there is no way of getting an accurate picture of the 2009 budget.

Republicans pounced on the new figures. Sen. Minority Leader Paul McKinley said Culver is violating the state’s Constitution by ending the fiscal year with an unbalanced budget.

“Republicans and independent expert economists for the past few years have consistently and continually warned Gov. Culver and legislative Democrats, who remain in a state of denial about Iowa’s budget, that Iowa’s taxpayers cannot afford the record spending, record borrowing and record deficits,” he said.

Gubernatorial hopeful Christopher Rants said Culver should stop denying there is a problem and bring the legislature back into session.

“It is time to quit worrying about the political ramifications of admitting that we have a deficit and get about the business of fixing it,” Rants said. “Gov. [Tom] Vilsack put aside partisan politics and called a special session in 2001 and 2002 to balance the budget after revenues declined. Culver needs to do the same.”

The grades were based on legislator’s votes on nine bills in each chamber. In the Senate, they ranged from a bill that “streamlines the Iowa Values Fund” to bills altering the state’s workers compensation system.

In the House, bills included numerous union-backed pieces of legislation, including the controversial prevailing wage bill.

Republican Sens. Randy Feenstra of Hull, Kim Reynolds of Osceola and Ron Wieck of Sioux City scored 100 percent.

Overall, the highest scoring Democrat was Rep. Brian Quirk of New Hampton, who scored a 57 percent, and Reps. Larry Marek of Riverside and Dorris Kelley of Waterloo, who scored 55 percent.

In the Senate, Democratic Sens. Tom Rielly of Oskaloosa, Rich Olive of Story City and Swati Dandekar of Marion each scored 44 percent.

Most legislation that was passed during the 2009 General Assembly takes effect July 1, at the start of the 2010 fiscal year.

Iowa House Democratic staff sent out a list of the major new regulation set to be made official:

- Foreclosure protection – Iowans will see expanded services when facing foreclosure, more accurate information from mortgage brokers or bankers and active duty reservists and national guard members will have new protections from foreclosure while serving (House File 706, Senate File 355 and Senate File 364 all passed both chambers unanimously).

- Historic tax credits — $30 million in Historic Tax Credits will be available for communities (Senate File 481 passed the Senate unanimously and the House 89-3).

- Sex Offenders – Sex offenders will be prohibited from being within 300 feet of schools, parks or other places kids gather. The state will also enhance tracking of the most dangerous sex offenders. (Senate File 340 passed unanimously in Senate and 93-3 in House).

- Children’s health care – Health care will be expanded to an additional 30,000 uninsured kids, more low-income women will be eligible for health care during pregnancy and it will be easier for parents to keep their adult children under 25 on their insurance plan (Senate File 389 passed 39-9 in Senate and unanimously in House).

- Wind energy – Schools, hospitals, universities, private colleges and community colleges will be eligible to apply for wind energy tax credits (Senate File 456 passed unanimously in Senate and 94-2 in House).

- Manure application during winter – Animal confinement operations are banned from surface application of liquid manure on snow covered ground from Dec. 21 to April 1, and on frozen ground from Feb. 1 to April 1, unless there is an emergency (Senate File 432 passed 41-7 in Senate and 87-9 in House).

- Electronic logs for pseudoephedrine – Pharmacies will now use electronic logbooks to track pseudoephedrine sales and stop meth makers from “pharmacy shopping” to get enough of the drug to make meth (Senate File 237 passed 44-6 in Senate and unanimously in House).

- Job protection for volunteer emergency providers – Volunteer emergency service providers, like fire fighters and first responders, will have new protections from being fired if they are late or absent due to an emergency (House File 671 passed unanimously in Senate and House).

- Nursing home safety –Nursing homes will face higher fines for incidents resulting in death or severe injury (Senate File 433 passed unanimously in Senate and House).

- Consumer fraud protections – Iowa consumers who are defrauded will have new rights to sue the business that defrauded them, with several exceptions (House File 712 passed unanimously in Senate and 96-1 in House).

Gov. Chet Culver

While official numbers won’t be known until the Revenue Estimating Conference meets in September, Culver said Iowa is in a much better fiscal position than many other states and should be able to avoid future budget cuts.

“I think we’ve done enough so far,” Culver said. “I think people need to understand that our budget in 2010 is $135 million less — a 2 1/2 percent cut — than it was in 2008. We’ve done across-the-board cuts, we’ve cut salaries, we got rid of bonus pay and we’ve trimmed. That puts us in a good position for 2010. Having said that, we’ll have to wait and see what adjustments we’ll need to make when the REC meets in September.”

No one can predict if the 2010 budget, which begins July 1, will need to be adjusted. But it is “nothing that we can’t deal with.”

“We’ve got $440 million in cash reserves,” he said. “We can transfer if we have to or make adjustments if we have to.”

The nonpartisan Legislative Services Agency has raised concern of late that revenues may fall further than anticipated, which could create a more immediate budget gap in fiscal year 2009 that is larger than Culver has the authority to deal with on his own. That could mean a special session will be needed to balance the budget. The legislature left a $45 million ending balance, and Culver has the authority to transfer $50 million from the state’s reserves.

“I lend a tremendous amount of credence and have a tremendous amount of respect for the numbers that come out of the Legislative Services Agency,” said David Swenson, an economist at Iowa State University. “They forecast a greater than $100 million shortfall. I don’t know how you can ignore that. Those folks are good. If the governor believes that through a series of decisions or with a buffer to cover the shortfall he can declare a balanced budget at year’s end, I don’t know if that’s the case or not.”

The 2010 budget could also take a hit if revenues continue to fall, Swenson said. But the real trouble could be in 2011, when federal stimulus money will be gone. Without that money, Swenson said, the state would have been forced into far greater lay offs in state government, specifically at the state’s public universities.

“It bolstered the transportation department, and the natural resources and environment as well,” he said. “It has done a lot to stabilize general government activity. Without it, there will be some tough decisions.”

Swenson said even if the economy starts to turn around, which he expects to happen in early 2010, it will take “an extra year or so for the state’s revenues to pick up.”

Culver acknowledged that 2011’s budget, which the legislature will work on starting in January, would be tough.

“No one is saying balancing the budget in 2011 is going to be easy since we’re dealing with a worldwide recession,” Culver said. “But we’re going to do it, and that might involve more cuts. I hope not, but it’s likely we’re going to have to find more savings.”

Culver pointed to work underway this summer by a legislative committee charged with studying ways to restructure state government as one way out of a financial disaster.

“We’re confident we can find significant savings in reorganized state government to make it more efficient,” Culver said. “It’s likely we will have a plan to put on the table early next session.”

He also pointed to the I-JOBS program, an $830 million infrastructure improvement plan passed in April.

“We have nearly a billion dollars in infrastructure projects,” Culver said. “That’s going to create economic opportunities and jobs at a time when we need it.”

Swenson said for every $100 million spent on infrastructure development by the I-JOBS program, 1,500 to 1,700 jobs would be created for the duration of time the money is being spent.

“So if you’re spending $250 million a year for the next three years, you’re looking at 4,000 jobs in the state’s economy,” he said. “That’s about 4 percent of where our current unemployment rolls are. It’s meaningful, and it is not something to be ignored. That money will find its way into the Iowa economy, and it does chip away at unemployment. But it will not significantly change or alter the overall economy.”

Despite the doom and gloom, Culver said Iowa is still in a far better position than most other states.

“The good news is, recent studies suggest Iowa will be one of the first 10 or 12 states to come out of the recession, in part because of our situation, with a strong reserve of cash and a AAA bond rating,” he said. “That would suggest that if we’re not at the bottom we are getting close.”

Des Moines City Manager Rick Clark told The Des Moines Register that the city would face a $5 million budget shortfall in 2011, up from an estimated $3.5 million. The city will reach out to its employees to seek salary and benefit cuts to help close the gap. But, if the legislature had not stepped in and officially legalized franchise fees, the city’s budget problems could have become catastrophic.

In 2004, Des Moines resident Lisa Kragnes sued the city saying the franchise fee was an illegal tax. The case, which received class certification for all Des Moines residents and businesses, is now in the hands of a District Court Judge. If the judge rules against Des Moines it could be forced to repay millions of dollars in refunds to customers.

The fee brings in about $12.6 million annually.

The new legislation ensures that even if Des Moines is forced to repay past fees it can still collect in the future, avoiding an even bigger hole being punched into its budget. In addition to Des Moines, 25 other cities in Iowa charge a franchise fee, which is designed to help cover the costs of operating, maintaining and regulating a utility. Supporters of the franchise fee say it helps ease the property-tax burden by spreading the cost of government services to nonprofits and other entities that don’t pay property taxes.

According to The Register, Des Moines cut its 2010 budget by $14 million with a mix of job cuts, privatization, salary freezes and expense reductions.

The franchise fee was included in the catch-all standings bill passed on the final day of the legislative session.

Senate File 389 allocates $5.7 million to increase income limits for eligibility for the State Children’s Health Insurance Program, known as HAWK-I, to 300 percent of the poverty level, or about $64,000 for a family of four.

The legislation allocates more than $510,000 to provide 11,000 children with dental care in the next fiscal year, and nearly $1.45 million to cover almost 25,000 children in fiscal year 2011.

The governor said since taking office in 2007 more than 32,000 Iowa children have received health insurance through HAWK-I and Medicaid, in addition to the 12,000 covered by the bill signed Tuesday.

“One of my top priorities as governor is to see that every Iowa child has access to the health care they not only need, but deserve,” Culver said. “This legislation moves us closer to our goal, and ensures that more Iowa children will grow up to be healthy adults.”

Parents of uninsured children who qualify for government health-insurance programs would be required to sign them up.

A version of the bill passed in the Senate early in the legislative session created a “health-insurance exchange,” which would have helped uninsured adults find coverage. That portion was stripped out by the House and replaced with a commission to make recommendations on how to improve health care for all Iowans.

In ceremonies in Marshalltown and Iowa City, Culver signed Senate Files 376, 477, and 474, all aimed at upgrading state infrastructure, creating jobs and flood recovery.

“Passing the legislation was the easy part,” Culver said. “Now, we must get to work creating good jobs and revitalizing our communities.”

The plan, which Culver discussed during his Condition of the State address, establishes an 11-member board within the Iowa Finance Authority to oversee payment of the bonds and ensure the projects fit into the program’s criteria, which include the number of jobs created, the project’s readiness to proceed immediately, and the project’s energy efficiency, among other things. Culver is expected to appoint six of the 11 members, although the time frame of the appointments is not clear. The other members of the board are the directors of several state departments.

The state is expected to sell bonds to pay for grants this summer, with the first grants being awarded soon after the bonds are sold. All money is required to be spent within three years.

Before the measure passed, Culver called on county, city and school officials to submit projects they believed could benefit from I-JOBS money. More than 4,000 projects were submitted, however governments will have to officially resubmit applications to be considered.

Below is a complete breakdown of the I-JOBS spending targets, according to the governor’s office:

Veterans home, community colleges and other public improvements: $285 million

·         $185 million to improve public facilities across Iowa, such as the Iowa Veterans Home, correction facilities, and our community colleges.

·         $100 million for further investments in state public infrastructure, including state parks.

Flood recovery and rebuilding: $165 million

·         $118.5 million in competitive grants available for reconstruction of local public buildings and flood control prevention in communities hit by last year’s disasters.

·         $46.5 million in grants targeted for help to Linn County, Cedar Rapids, and to rebuild fire stations in Palo, Elkader, and Charles City.

Transportation infrastructure: $115 million

·         $50 million to improve the safety of Iowa’s bridges.

·         $55 million to cities and counties to improve local roads, including many roads still damaged by last year’s natural disasters.

·         $10 million invested in airports, rail and trails.

Iowa’s universities: $115 million

·         $100 Million to rebuild 10 buildings destroyed by flooding at the University of Iowa, which will allow the use of nearly $500 Million in federal funds

·         $15 Million to build a veterinary hospital lab at Iowa State University

Environment and water quality: $80 million

·         $35 million to help construct sewers in communities under 10,000.

·         $20 million in competitive grants for communities of any size for water improvement projects.

·         $25 million to water-quality projects, including flood prevention, as well as soil conservation practices.

Housing needs: $35 million

·         $20 million invested in affordable housing for elderly, disabled, and low-income Iowans.

·         $10 million to construct or improve shelters for domestic abuse, emergencies, and the homeless.

·         $5 million to repair homes damaged by last year’s floods.

Telecommunications and renewable energy: $35 million

·         $25 million invested in improving access to technology throughout Iowa.

·         $10 million to create a revolving loan program to support alternative energy projects to support both new jobs and energy independence.