Photo courtesy of the Office of the Governor

Iowa Governor Kim Reynolds gave her first Condition of the State Address yesterday before a joint session of the Iowa House and Iowa Senate. Reynolds now seeks election to the job she holds after former Governor Terry Branstad’s confirmation as U.S. Ambassador to China.

Republicans gave her high marks, and Democrats criticized her address. When I watched her speech yesterday, I wanted to see how she would separate herself from Branstad.

Overall, I thought her address was well done. She is far more energetic than her predecessor and is a better speaker. Branstad’s most recent Condition of the State addresses have been rather milquetoast. I did not have that sense. I thought she cast a pretty bold vision for the year and did not just focus on items with the most bipartisan appeal.

“We will never stop working to protect the unborn.”

Reynolds recapping 2017 said, “We protected life, standing up for the most vulnerable by prohibiting late-term abortions. And we will never stop working to protect the unborn.”

This was the only accomplishment she shared that did not have a sense of finality. On the other hand, she did not give any particular pro-life objective as she shared her agenda for 2018. I’m confident that Governor Reynolds will sign any pro-life legislation that comes before her desk (I have more confidence in this than I have in the legislature passing anything meaningful this year). I hope that she will lead in this area and not passively wait to see what the legislature will do.

She’s not punting on water quality.

She wants a water quality bill this session. This is a big issue and heading into 2018, provided she signs a good bill that works to address the problem yet is not burdensome on Iowa’s farmers, it will be a feather in her cap. She did not get into specifics, however, other than to say this will be an ongoing discussion.

My hope is that a water quality bill is the first piece of legislation I sign as Governor.

Let me assure you, passage of this monumental legislation does not mean the water quality discussion is over; rather it ignites the conversation to implement and scale practices that will continue to make an impact on water quality.

How much of an issue this will be in the gubernatorial election will depend on whether an actual policy is determined or if the legislature just authorizes a study group.

Iowa = Opportunity

I particularly liked this excerpt of the speech:

My vision for the future is an Iowa overflowing with opportunity—opportunity for our working families, young people, and our communities, both rural and urban.

A place where it doesn’t matter if you’re rich or poor, young or old, male or female.

Where your last name and zip code aren’t nearly as important as your ability to dream and willingness to reach for it.

A place where, if life got in the way of those dreams, you can find a second start.

And if you’ve made mistakes, you can find a second chance.

Because opportunity means everyone has a chance to succeed.

It doesn’t mean government picking winners and losers, or waiting for government to fix every problem.

It means, when we face challenges, we do what Iowans have always done: roll up our sleeves and get to work.

The initiative she’s launching with a focus on rural Iowa is forward thinking. If Lt. Governor Adam Gregg, whom she is appointing to lead this, can leverage private dollars rather than taxpayer funds all the better.

Personal Income Tax Reform

I discussed this yesterday in my podcast, but she made an excellent point about the need for personal income tax reform in Iowa.

Because of an outdated provision in Iowa’s tax code, Iowans will see a tax increase if we don’t pass tax reform at the state level.

Iowa is one of only three states that allow taxpayers to deduct their federal taxes. While that might sound like a good thing, right now it’s not.

It creates complexity, and worse—it means that when your federal taxes go down, your Iowa taxes go up. And it often punishes those who we want to help the most.

I have to admit; I did not even think about that when tax reform passed at the federal level. Typically, I have advocated for maintaining deductibility since Iowa has the highest personal income tax top-rate in the Midwest. With a tax cut at the federal level that deduction is a liability for Iowa taxpayers, not an asset. I’m sure those who see Iowa’s budget shortfall as a revenue problem rather than a spending problem would advocate just getting rid of it which would still in effect raise taxes. Iowa needs to lower personal income tax rates and not just eliminate deductibility.

She continues:

Therefore, I will be proposing a tax reform package that significantly reduces rates, modernizes our tax code, eliminates federal deductibility, and provides real tax relief for middle class families, farmers, and small businesses.

This is an opportunity to free us from decisions made in Washington, D.C. and simplify our tax code. And, more important, Iowans will keep more of their hard-earned money.

She announced that she’s holding off on corporate income tax reform, however. This is a shift from the approach we’ve seen from the Branstad administration. Corporate interests tended to come first, so this is a refreshing change (even though we do need corporate income tax reform having one of the worst business climates in the nation). She said:

It’s no secret we are working through difficult times with our state budget. So we have to focus on what we can afford. While I want to reduce our uncompetitive corporate taxes, this is not the year.

But in the meantime, I will be creating a bipartisan task force to analyze every tax credit and come back with recommendations before the next legislative session. This will provide the opportunity to address our corporate tax rate with a better understanding of the larger picture.

It may take a multi-year effort, but we are going to completely reform our tax code. We’re going to make Iowa more competitive, and we’re going to continue to be a place where businesses—big and small—want to grow and expand.

Acknowledging mistakes with Medicaid reform.

I agree with what the Iowa Legislature and Iowa Governor Terry Branstad tried to do to reform Medicaid in light of Obamacare in principle. Status quo wouldn’t cut it. Implementation of the changes were a nightmare. Governor Reynolds acknowledged that and pledged change.

I still believe managed care is the right decision for Iowa, but it has become very clear that mistakes were made in how it was done. Shortly after being sworn is as Governor, I took deliberate action to make a change. I hired a new director for the Department of Human Services, who has the passion, and—most importantly—the compassion to make this work. And he has hired a new Medicaid director with the experience to get things turned around.

With this new team in place, we are working with our caregivers to resolve issues in a timely manner and ensure on-time payments.

We are continuing to work with our Managed Care-Organizations to ensure Iowans are getting the best possible outcomes. And we are reaching patients in new and innovative ways to individualize their care.

She also wants to expand access to Iowa farmers and small business owners. I’m on the fence here until I see some legislation. The idea is not a bad one, but the devil, as always, is in the details.

Addressing mental health

Having worked in juvenile justice and corrections, I can unequivocally state that we have a mental health crisis in Iowa. Actions by the Branstad Administration shifted the problem from the Iowa Department of Human Services to the Iowa Department of Corrections.

Obviously, that doesn’t solve the problem.

I think she’s heading in the right direction. She said:

To improve our mental health system, we can’t just focus on the sheer number of beds; we must identify the gaps in our system.

In many cases, Iowans suffering from mental illness don’t need hospitalization. But they also can’t get the care they need at home.

They need a safe place to stay that offers professional services and a watchful eye.

We need to establish residential access centers that will provide short-term care for those in crisis. A place with the resources necessary to get these Iowans stabilized and back home to their families.

To help make that happen, I am asking the legislature to remove the cap on sub-acute beds.

And I am asking the mental health regions and our stakeholders to work with me to create a long-term and sustainable funding structure to establish these much-needed crisis access centers.

Reducing the number of opioids that are prescribed

Governor Reynolds I believe is taking the right approach on this issue. The typical and historical way of dealing with drug problems won’t solve the problem. What Reynolds suggests in common sense.

My plan to address this epidemic includes, increase use of the Prescription Monitoring Program, supporting enhanced intervention for Iowans addicted to opioids, and expanding medicated assisted treatment, the very program that helped Caleb.

And today I am calling on the legislature to pass legislation to reduce the number of opioids prescribed in Iowa.

Ultimately, the issues I had with her address was in the area of K-12 education. I just don’t see enough separation between her and Governor Branstad. I hope that will change.

She gave lip service to school choice.

Governor Reynolds mentioned school choice during her address:

We have also maintained our commitment to school choice, which offers families the option to teach their values, beliefs, and viewpoints to their children.

That’s why my tax reform plan will expand 529 plans to include K-12 education.

Allowing 529 savings account spending for K-12 education is not a bad thing, but it does not accomplish giving more parents more choice in education. First, most people who use those want to focus on college savings. Second, this does not provide much of a tax break for most taxpayers as most taxpayers don’t itemize. Third, you still have to have means to save and pay for private school tuition to take advantage of a 529. This proposal does not help those for whom private school or even homeschooling is out of reach financially.

I would love to see some leadership out of the Governor’s office on a well-written education savings account bill. I say well-written because while I want greater parental choice for all parents, not just those of means, I also want to maintain education liberty. A bill with strings attached that forces government education reforms into private schools or homeschooling is a non-starter.

At the very least Governor Reynolds could have pledged to increase the amount of money for the school tuition organization tax credit program.

$3.3 Billion for K-12 state spending isn’t enough?

She touted education spending:

Since taking office seven years ago, we have added $735 million in new money to our preK-12 education systems.

At $3.3 billion, funding is at an all-time high.

In fact, a recent study by the Center on Budget and Policy Priorities found that over the last 10 years, only three states increased education funding at a higher rate than Iowa.

Education is a priority, and we will continue to back that up with real money.

In my budget I am proposing $54 million in new money for our schools.

Education represents 56 percent of her proposed budget, that is just state general fund expenditures. It does not include sales tax, property tax, and federal spending for schools.

We have a spending problem in Iowa, and all spending needs scrutiny. Education should not be exempt. If she wants to increase the school aid then she should look at what can be cut to offset the $54 million in new money.

When is enough, enough? When you ask people pushing for more funding they just say “more.”

VoTech I like, Workforce Development I don’t.

First, some high schools are doing great things when it comes to vocational tech, and I would like to see more of that.

Governor Reynolds said:

Last fall, Mike Rowe, the host of Dirty Jobs, visited Central Campus in Des Moines and called its pre-apprenticeship program a model for high schools all over the country. He talked about how welding, carpentry, nursing, drywall, automotive—all the major trades—were represented.

Full disclosure, my youngest daughter completed the Certified Nurses Aide from Central Campus (we do a mix of homeschooling, Central Campus, and DMACC courses for her to finish out high school). Offering classes to high schoolers that allow them to earn college credit and some vocational skills training before they graduate is fantastic.

Helping kids learn about different vocational options is noteworthy. Not every student will go to a four-year college.

Not every student will choose a STEM career either. Corporate interests shouldn’t drive the curriculum in our local schools it’s self-serving. Focusing on workforce development and what corporate interests want robs kids of a rich classical education, a well-rounded education they deserve whether or not they head to college.

It’s a fine line. Offer kids the classics and an opportunity to pursue VoTech and apprenticeships if they so choose.

All quiet on the standards and accountability front.

Governor Reynolds said nothing about academic standards and assessments. While she has not verbally backed Common Core, Next Generation Science Standards, or the C-3 Social Studies Standards Framework, she has not opposed them either.

This signals status quo which is disappointing. Iowa needs to return more control to local school districts, and offer quality standards (current standards need not apply) as a resource, not a mandate. Governor Reynolds also can take a positive step by shutting down the adoption of a new standardized assessment and stick with our current Iowa Assessments for now.

So far mum is the word.

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