The State Police Officers Council (SPOC) has agreed that its 640 members will take five furlough days during the remaining 7 months of FY2010, a move that will create approximately $847,435 in savings.

The state would also suspend contributions to a deferred compensation retirement plan, according to the agreement. The governor’s office estimates this provision will create approximately $226,232 in savings.

The agreement mirrors one reached by the state and the American Federation of State, County and Municipal Employees Local 61 last week that saved 479 jobs.

By agreeing to these measures, SPOC members will be safe from layoffs during the current fiscal year, which ends July 30, 2010.

Next week , the SPOC Board will submit the agreement to union members for a full vote. An announcement on the outcome of the vote is expected close to the AFSCME vote on Nov. 25.

“I want to thank the leadership at SPOC for joining with us to protect essential public safety jobs,” Culver said in a statement. “This understanding will help to keep Iowans safe while meeting our obligation to balance the state budget.  I am very pleased by the agreement and I encourage the membership to vote yes on this measure.”

Last month, Culver ordered a 10 percent across-the-board cut to the state’s budget. Initial budget cut proposals called for more than 800 layoffs. Culver announced that unions representing employees from the Department of Public Safety and Department of Corrections would have to open up their contracts in order to avoid layoffs. Two of the three unions have now come to understandings with the state government, with the third, Iowa United Professionals (IUP), deciding to accept 55 layoffs.

IUP represents 3,000 members, including social workers and corrections counselors.

According the report, Iowa families earning less than $20,000 a year — the poorest fifth of Iowa non-elderly taxpayers — pay 11 percent of their income in state and local taxes. Middle-income families — those earning between $37,000 and $56,000 — pay 10 percent of their income in Iowa state and local taxes.

The richest Iowa taxpayers, with income averaging $989,200, pay 7.4 percent of their income in state and local taxes.

When a state tax law that allows residents to write off federal taxes on state returns is factored in, the wealthiest Iowans pay only 6 percent of their income in state and local taxes. Low-income taxpayers see no benefit from the deduction.

“No one would ever design an income tax with lower tax rates for the best-off taxpayers,” said Matthew Gardner, executive director of the D.C.-based Institute on Taxation and Economic Policy and lead author of the report. “But that is exactly what Iowa’s tax system overall does. It allows the very wealthiest individuals to contribute less of their income, on average, than middle- and lower-income families must pay. In other words, Iowa has an unfair, regressive tax system.”

Peter Fisher, research director of the Iowa Policy Project, said the report shows the need in Iowa for dramatic income-tax reform. He said the report confirmed Iowa’s reliance on “regressive” taxes — sales, excise and property taxes — which fall heavier as a share of income on lower-income families, and the weak progressivity of the state income tax.

During the 2009 legislative session, Democrats proposed to end federal deductibility and rework the tax code to lower the overall tax rate for every citizen. However, those making more than $125,000 a year would have ended up paying slightly more under the new system, up to $1,400 a year for Iowans making $250,000 or more a year.

Fierce opposition from conservative groups like Iowans for Tax Relief ultimately killed the proposal. The Muscatine-based group, which helped derail a similar proposal in the 1980s when it was pushed by former Republican Gov. Terry Branstad, said ending federal deductibility “flies in the face of common sense Iowa values and is simply unfair.”

Iowa State University economist David Swenson told the Iowa Independent during the session that federal deductibility was an “archaic holdover from a long ago time that nobody really knows why it exists anymore.”

Iowa, Alabama and Louisiana are the only states that allow federal taxes to be deducted on state returns.

The latest attack was delivered in Dubuque by state Rep. Chris Rants against former Gov. Terry Branstad. Rants said he spoke earlier in the day with activists who wanted him to support an increase of the gas tax.

“I told him ‘if you’re looking for someone to raise taxes, I’m not your candidate,’” Rants said, adding: “You’re not going to find a candidate that is going to tell you what you want to hear. And he told me that’s not true – Terry Branstad will raise the gas tax.”

Rants said he defended Branstad by saying “just because he raised it once doesn’t mean he’s going to raise it again.”

“He said, ‘No, he’s already told us he’s going to raise the gas tax,’” Rants said.

Iowa Democrats posted video of the speech on their “Iowa Knows Better” Web site. IDP Chairman Michael Kiernan called the speech “deeply troubling in that it would seem Terry Branstad has not learned his lessons about tax increases on Iowans and intends to be a repeat offender.”

This isn’t the first time the IDP has highlighted GOP intra-party conflict. In September, Democrats pointed to Rants’ criticism of rival Bob Vander Plaats’ tenure as CEO of the nonprofit Opportunities Unlimited and his statements regarding paying off state bonds. Last month, a meeting between Branstad and social conservative leaders resulted in two separate IDP attacks against the four-term governor.

The Democrats’ strategy also points to one of the dangers posed by a contentious GOP gubernatorial primary. Observers have said a nasty primary fight could create fissures within the party structure that may not heal before Election Day. However, there are also those who believe the eventual nominee will benefit from a rigorous primary, as all potential attacks will be made public, avoiding an “October Surprise” in 2010.

Though each Iowan seems to have his or her own ideas for how money should be cut from the budget, few blame the Democrats for overspending on their key priorities over the past few years.

In all, majorities support Democrats’ expansion of health insurance coverage for children, spending on public schools, repairing roads and bridges, raising teacher pay, and developing renewable energy. A plurality supports expanded free preschool.

On most budget items, pluralities of Iowans agree with the idea of cutting everything by an equal amount, except when it comes to health insurance for low-income residents and the Iowa State Patrol, which majorities say should be spared from cuts. This seems to conform to Gov. Chet Culver’s decision to make an across-the-board budget cut now and use the beginning of the legislative session next year to restore some funding for key priorities.

That said, Iowans have mixed feelings about the decisions that have been made to cut the state budget. Though only 19 percent of respondents said they were “Very Confident” or “Mostly Confident” about the budget-cutting decisions, 44 percent were “Just Somewhat Confident.” 35 percent were not confident.

(Incidentally, it seems strange that this question had three positive responses and just one negative response. These responses may fit people’s opinions best, but they also can also be confusing to interpret. The Register story itself seems to add up “Somewhat Confident” and “Not Confident” to demonstrate a disapproving majority, but “Somewhat Confident” doesn’t sound very disapproving to me. It was the closest thing to a middle ground that pollsters offered, and it implies slight approval, not disapproval.)

You can read the Register’s write-up of the poll here.

The actions, announced today, also include reducing the hours of 58 employees, and will ultimately result in a 9.3 percent reduction of workforce. The new cuts are in addition to the 10 days of court closures and unpaid leave or all judges, magistrates and count employees that were announced earlier this week.

In total, the cost-cutting measures are expected to reduce the operation budget for the judicial branch by $11.4 million, or 7.1 percent. That percentage corresponds with the state’s revenue shortfall as estimated by the State Revenue Estimating Conference last month.

“The judicial branch is concerned about the state’s financial crisis, and is doing all that it can reasonably do to reduce expenses,” said Chief Justice Marsha Ternus. “Budget cuts, however, typically have a disproportionate effect on the judicial branch because we have no reserve funds to tap and no programs to eliminate. We have people — employees and judges — who are the life-blood of the court system, directly providing the court services Iowans need. Even with a 7.1 percent cut the judicial branch will lay off more employees, cut more jobs and require more unpaid leave than most state offices and departments, including the regents.”

Although as a separate branch of government the judiciary is not subject to the 10 percent across-the-board cuts ordered by the governor for executive-branch agencies, the supreme court initially considered making cuts commensurate with it. The court decided, however, that a 7.1 percent reduction was “more prudent given the vital nature of court services,” yet would still be sufficient to meet the current revenue shortfall.

“The court thoroughly examined and earnestly consider the actions we would need to take to meet a 10 percent cut,” said Ternus. “At 10 percent, the cost in terms of public service would be enormous, decimating our workforce and crippling our ability to resolve critical cases and provide essential services. As it is, a 7.1 percent cut requires draconian measures that will result in long delays, gaps in service and reduced public access to the courts.”

She added that the court was concerned about the impact the cuts will have on work with troubled juveniles and abused and neglected children, and pledged to continue to give priority to such cases within the limits of the reduced resources.

“Despite these cuts, the judicial branch will continue to send judges to every county on a regular basis and to operate a clerk of court in each county,” she said. “However, because we have cut the staff in our clerk of court offices so deeply, we have no choice but to reduce the hours of those offices. Twenty-three clerk of court offices will operate less than 40 hours a week, and others will have reduced public hours so they have some uninterrupted time to work on backlogs.”

The Iowa Judicial Branch has had two previous rounds of budget cuts in 2009. In March, the legislature cut the appropriation to the branch’s fiscal year budget by $3.8 million, resulting in court closure days, reduction in travel and other cost-saving measures. In June, the supreme court approved a fiscal 2010 budget that reduced operating expenses by $5.4 million, which resulted in the elimination of 34 staff positions and more cuts. With the reduction announced today, there are 15 percent fewer judicial branch employees for fiscal year 2010 than there were 10 years ago.

The 479 positions include front line correctional officers, parole probation officers and other support positions.

Culver called on AFSCME and two other unions that represent employees of the Department of Corrections and the Department of Public Safety to reopen their contracts in an attempt to avoid deep job cuts. AFSCME Iowa Council 61 President Danny Homan said Monday the union did everything it could to save the jobs of its members.

The changes to the contract, which will be voted on by union members no later than Nov. 25, include:

1. Each of the approximately 20,000 state employees who are covered by the AFSCME Master Agreement will be required to take five mandatory unpaid days during the remaining 7 months of FY2010 which ends June 30, 2010. This provision will create approximately $22 million in savings, the governor’s office contends.
2. The deferred compensation program for state employees will undergo temporary changes to suspend the state’s contribution through June 30, 2010. The employees’ contribution to the deferred compensation program will remain as currently allowed under the AFSCME Master Agreement. This provision will create approximately $4 million in savings.
3. No AFSCME Iowa Council 61 executive branch state employee will be laid off between the date of approval and the end of the current fiscal year.
4. Non-union employees who are laid off will not be permitted to displace employees who are union members.

“I want to thank the leadership at AFSCME for joining with us to save these essential public service jobs,” Culver said in a statement. “This understanding will help preserve vital services for Iowans while meeting our obligation to balance the state budget.  This is a positive step forward and I encourage the membership to vote yes on this measure.”

Last month, Culver finalized 34 departmental budget cut plans, which will result in 180 layoffs and the elimination of 229 open positions.

There has been no mention of contract negotiations with the other two unions that represent state corrections and public safety departments employees: the State Police Officers Council, which represents about 650 sworn officers and game wardens, and the Iowa United Professions which represents 3,000 members, including social workers and corrections counselors.

Ed Failor Jr., president of Iowans for Tax Relief, said the privatization of Iowa’s prisons would result in many positive benefits, from making communities safer to minimizing inefficiencies. But the biggest benefit would be cost savings, he said.

“Iowa taxpayers would save tens of millions of dollars from the sale and operation of private prisons,” Failor said. “The current budget situation requires lawmakers to make real changes to state government, and selling the state prison system is part of the solution to moving Iowa forward.”

Failor points to Arizona, where lawmakers project privatizing prisons could save their state more than $100 million in the corrections budget, and calls on Iowa to consider a similar move.

“Today, there are over 9,000 inmates in Iowa prisons, and the average annual cost per prisoner is approximately $30,000,” Failor said. “Iowa taxpayers spend over $265 million on state prisons, and the average cost per prisoner increases each year.”

Privatizing state functions is an idea getting serious consideration around the country, as state’s grapple with an historic economic downturn that has decimated their budgets. In Iowa, Gov. Chet Culver recently announced a 10-percent cut to the state budget in order to overcome a more than $400 million deficit.

Not everyone is sold on the benefits of privatizing prisons.

A U.S. Department of Justice study found that the cost-savings promised by private prisons “have simply not materialized.”The study concluded that rather than the projected 20-percent savings, the average saving from privatization was only about 1 percent, and most of that was achieved through lower labor costs.

Opponents of privatization also express worry that the quest for higher profits will result in lower staff levels and training at private facilities and could lead to increases in incidences of violence and escapes.

A federal study by the Bureau of Justice Statistics found Iowa ranked second-lowest nationally in per-capita spending on corrections. The state spent $121 per person, lower than every state but North Dakota, which spends $116 per person. The national average was $210.

In a statement last week, Rep. Jeff Kaufmann, R-Wilton, and Rep. Pat Grassley, R-New Hartford, said the $130,000 trip is “well intentioned” but ultimately a bad idea.

That criticism was echoed on Monday when Danny Homan, president of the American Federation of State County and Municipal Employees Council 61, called on the school to cancel the trip.

School officials defended the trip to The Des Moines Register, saying the university’s hospital has scored poorly on patient satisfaction surveys and the trip aims to turn that around, saying it is important to “reinvest in the business.”

Homan said in light of Gov. Chet Culver’s recent decision to cut 10 percent from the state’s budget, and the fact that the decision will result in hundreds of layoffs, the timing of the trip is bad.

“Even more insulting is that this trip includes a free visit to Disney World, so that these attendees can enjoy a day at a theme park while others right now are sitting on pins and needles worrying about whether or not they will have a job as the holidays approach,” he said.

The ad will air in the Des Moines and Cedar Rapids markets as well as some cable around the state. It is titled “Stronger Than Ever” and focuses on the governor’s response to last year’s flooding and to the state’s economic downturn.

“The new ad … puts the economic situation and recent budget decisions in context,” Culver campaign manager Andrew Roos said in a press release announcing the ad. “With the worst natural disaster in Iowa history, and the deepest economic downturn since the 1930s, Iowa has faced real challenges. Culver has taken these challenges head-on, managed the state responsibly and made smart investments that will help Iowa emerge from this storm stronger than ever.”

In the ad, Culver sounds like he’s running a politically conservative campaign, focusing on cutting spending and cutting his own salary, as well as emphasizing his decision against raising taxes.

Culver launched his first TV ad in mid October, focusing solely on his economic record.

It’s a theme he’s returned to repeatedly over the last few weeks, first in a series of town halls, then in a blog post on the conservative Hawkeye Review. And with Fong competing with a crowded field of candidates that includes a former governor, a former House speaker and a two-time gubernatorial candidate, it is quickly becoming the biggest distinction between Fong and his rivals.

“[My father] said, ‘High taxes are wrong because they inhibit personal freedom.’ Done,” Fong told the Sioux City Journal last month. “For an immigrant from China who’s bottom line is about the American Dream, taxation is really a freedom issue.”

Fong promises to eliminate the income tax and pay for the reduction in revenue with “spending reductions, the closing of special interest tax loopholes and the growth of our economy over time.”

Retired Des Moines Register Editor Richard Doak argued against the “taxes make a recession worse” meme in a Sunday column, saying the arguments made by supply-side economists have fallen flat over the years. Government’s provide a service, and cutting that service to the bone in order to avoid taxes is short sighted.

The conclusion isn’t that tax increases are good. It’s that the economy is too complex to be governed by any single factor. Taxes aren’t the be-all and end-all of the economy. Sometimes tax increases are necessary, and those that are won’t necessarily harm the economy. They didn’t in the past. …

… This isn’t an argument for raising taxes. There might be good reasons for Iowa to avoid raising taxes now, but the supposed ill effects of a tax increase on the economy isn’t one of them.

Fong’s position goes much further than any of his GOP rivals. Bob Vander Plaats simply calls for “simplifying the income tax system” and lowering the tax burden on corporate income. Chris Rants’ focus has so far been on reducing property taxes.