♪♪ The 2025 legislative session opened this week.

House Speaker Pat Grassley will join us here on the set overlooking the House Chamber on this edition of Iowa Press.

♪♪ Funding for Iowa Press was provided by Friends, the Iowa PBS Foundation.

♪♪ The Associated General Contractors of Iowa, the public's partner in building Iowa's highway, bridge and municipal utility infrastructure.

Elite Casino Resorts is rooted in Iowa.

Elite's 1,600 employees are our company's greatest asset.

A family run business, Elite supports volunteerism, encourages promotions from within and shares profits with our employees.

♪♪ Across Iowa, hundreds of neighborhood banks strive to serve their communities, provide jobs and help local businesses.

Iowa banks are proud to back the life you build.

Learn more at iowabankers.com.

♪♪ For decades, Iowa Press has brought you political leaders and newsmakers from across Iowa and beyond.

Celebrating more than 50 years on statewide Iowa PBS, this is the Friday, January 17th edition of Iowa Press.

From the House Chamber in the Iowa Capitol, here is Kay Henderson.

♪♪ [Henderson] On this edition of Iowa Press, we are in what people call the crow's nest.

So, we are perched above the House Chamber.

And our guest is House Speaker Pat Grassley.

He is starting his 19th session on the Iowa legislature.

Welcome back to Iowa Press and thanks for having us in the House.

[Grassley] Glad to be here.

It's a short walk for me.

I appreciate it.

[Henderson] Also joining our conversation are Katarina Sostaric of Iowa Public Radio and Erin Murphy of the Gazette in Cedar Rapids.

Katarina?

[Sostaric] Mr. Speaker, we were all here in this room earlier this week when Governor Kim Reynolds gave her Condition of the State Address.

And one of her big proposals was banning cell phones in schools at least during instructional time.

Do you feel that strikes the right balance between local control for school districts and helping kids not be distracted in class?

[Grassley] Yeah, I think that that's been something that is floating around out there as an issue, even probably into last session somewhat.

And as I've had conversations back home, I've had conversations with other members, I think bringing a minimum standard but also leaving the flexibility.

The Governor laid out in her speech, brought up two examples of schools that are doing it different ways.

But I think us just setting that minimum standard and what I have been talking with back home seems to be reasonable and then let school districts with their faculty, staff and students make those further decisions.

So, I'm hopeful that we can make progress on that issue.

[Sostaric] And she also mentioned another cell phone ban.

She is asking lawmakers to make it illegal to use a phone while driving unless it is in a hands-free mode.

Do you think her bringing it up during her Condition of the State speech is enough of a push to finally make House republicans pass that bill?

[Grassley] I think it changes the narrative around that issue.

We've had multiple different bills in the House, whether it was tied with other issues, individual efforts to do it.

Some of the models we've looked at is like Ohio doing some common-sense solutions to the issue.

But I think to answer your specific question, I think it does change the conversation and raises its stature as a priority issue.

Anything that makes it into the speech usually gets a little bit more attention during the legislative session.

[Murphy] Mr. Speaker, another proposal from the government dealt with Iowa's rising cancer rates.

Iowa has one of the highest rates in the nation and it is also rising faster I believe than any other state.

And a partnership with the University of Iowa to do some research into what is causing that and also ask for a $1 million dollar appropriation to help kind of seed that research.

What do House republicans think about that proposal?

[Grassley] I think that's a perfect example of a way in which we can as a state partner with our university.

Obviously, it's a world class facility.

I think it's something that obviously we want to look more what the specifics of the program would look like if we're going to use a million dollars of taxpayer money.

That being said, I think that is a good effort for us to put behind.

The Governor also brought up the impacts of alcohol.

So, binge drinking rising at similar rates.

So, I think there could be a lot of factors to what that may look like and putting it in the hands of the University of Iowa I think is the right decision.

We'll just want to learn a little bit more before we commit to that dollar amount.

[Murphy] Well, and to that, and you mentioned some of the environmental potential causes that Governor Reynolds mentioned.

One that she didn't but that a lot of people have wondered about is the potential tie with agricultural products, pesticides, etcetera.

If the research comes back with some kind of link like that, does that give you any pause for concern as a farmer in a farming state?

Do you feel like there should be parameters put on this research by the University of Iowa?

[Grassley] I would first, obviously we want to see what that is, but I think it has risen to a level of issue.

We at least need to have that discussion.

The state obviously, the request of the Governor for a million dollars for that partnership I don't think is an unreasonable amount.

But I think we need to be asking the questions that may exist and I think that the conversation is probably more than just one thing.

And I think that is where we have kind of lost in the past.

Is it just smoking or is it just whatever that may be?

I think having somebody from the outside bring that brought feedback.

But again, I want to see what that partnership looks like before we make any firm commitments.

[Henderson] At the end of the 2024 legislative session, the Iowa House voted for a new casino moratorium.

The previous one expired on July 1st.

And the city of Cedar Rapids in coordination with developers are proposing a new casino, $275 million dollar project.

You have a colleague, Representative Bobby Kaufmann, who is authoring a bill to reimpose a casino moratorium.

Do you think that moratorium has a chance of passing before the Racing and Gaming Commission votes in February?

[Grassley] I mean, obviously it would make more sense if that was when the action would take place.

Representative Kaufmann has been talking significantly about getting support from caucus members if that was a decision he wanted to make.

As I've been saying, leading up to session we want to make sure we have those conversations with the Senate, with the Governor.

As you said last year, we passed a bill that really probably didn't stand much chance since it was so late in session.

That doesn't mean that we can't do anything without the House, or excuse me, without the Senate, without the Governor.

But I would like for us to reach some sort of a consensus on what that may look like if we are to move forward.

[Henderson] And you're expecting that consensus by the end of January?

Because passing it after the Racing and Gaming Commission grants the license creates a whole set of different issues.

[Grassley] As you know from being around here, the legislature, if we make that decision has the ability to move fairly quickly.

It still takes time obviously to move bills through the House and the Senate.

Again, I think first we have to reach an agreement if that is the route in which we want to go.

There are some divides within the legislature regardless of party.

Typically, when it comes to gaming issues, we've been pretty open about kind of just open it up to the House and make decisions.

That is long before I was in leadership roles.

So, we'll have those conversations if that is a route we decide to go.

[Henderson] Are you laying odds on this?

[Grassley] I'm not taking any bets, no.

[Sostaric] In your opening speech on Monday, you mentioned wanting to eliminate sales taxes on what you called everyday items for families.

What are some of those?

[Grassley] Well, as you know we have looked at -- we have done some of this in the past in looking at feminine hygiene products and other things, for example.

I think it could just be any day items, just looking at things like toilet paper, looking at other things like vitamins.

I threw those out as examples because I don't want to leave here and it's like we have a bill sitting and waiting.

The point of that conversation and using the terminology of everyday items would be more so what we hear on the campaign trail, the impacts that inflation is having on Iowans.

And at the state level we don't affect monetary policy at the federal level.

So, what can we control?

And that is taxing of items we feel is the quickest way to provide a level of relief.

So, I don't know if we're sitting here with that list put together.

I use that as a term of things that I think we could even all agree here are the items that most Iowans are using and utilizing every day.

[Sostaric] And the Governor proposed for a second time lowering another type of tax, the unemployment tax that employers pay.

Can that be done right now given that Iowans have been going through some layoffs?

And are you confident that there could still be enough money in the unemployment trust fund?

[Grassley] And I think that will be the leading conversation that we've had.

The Governor did make a case that some of our fund balance is probably out of whack with some other states.

Those are the kinds of things we need to look at.

As you know, on our tax cuts we've had these conversations over the last several years and the Governor laid this out when it comes to income tax.

But from the House republican's standpoint, whenever we're looking at tax changes, we want to make sure that it's going to be sustainable.

We've done that when it was income, corporate, eliminating retirement.

That has been one of the drivers.

So that would be one of the key points that we would have to make sure that the sustainability exists and the funds provide certainty to the workforce.

So, we'll look forward to having that conversation.

But I think the Governor does bring up a point that Iowa may be an outlier, so we look forward to engaging in that.

[Murphy] In neither her Condition of the State Address nor her budget proposal did Governor Reynolds make any proposal regarding property taxes.

Were you surprised by that?

Or have you been kind of working under the assumption that the legislature will take the lead on this topic?

[Grassley] I think the Governor has been aware and I've been talking about it for several months now that the House planned on being a part of that conversation, would love to be taking the lead on that issue.

And I think it gets back to what I've been talking about in all the pre-session interviews and into the fall is I don't know if there is one magic solution.

I think we wouldn't still be talking about this issue if there was.

And I actually appreciate the Governor not bringing it up.

I don't think it's because she doesn't think it's an important issue.

I feel confident that she does.

But if the Governor were to just lay one specific plan on the legislature, I don't think it does what we're trying to get to which is potentially put a lot of different ideas on the table, make sure all of the stakeholders are coming to the table and engage in that conversation to provide relief.

And as I've said leading up to session, my ultimate goal in property tax and I think our caucus would be flipping the current narrative, which in our opinion exists for certainty for the taxing entity and local governments.

We'd like to leave session with more certainty to the taxpayer side because we're hearing from Iowans every day that are trying to stay in their homes.

They feel like they're feeling the pinch of making decisions to be able to stay where they have lived for 30 years potentially.

And we need to respond to that.

[Murphy] You theoretically have two years of this General Assembly, we're talking about this session, but it's a two-year General Assembly.

You mentioned it's such a complex topic.

Does something have to get done this session?

Can this be a multiyear discussion?

[Grassley] I think our objective should be that it is done this session.

But again, since it is so complicated if we cannot find complete consensus, I think there's some things that we can do to work on providing relief and some certainty.

And I think it could potentially be a two-year solution.

We'd love to start tackling that to start showing Iowans that it's one more issue that the legislature has tried to tackle.

That has been one that has been very difficult to grab.

And we've been able to make progress.

[Henderson] The Governor in her speech on Tuesday said that she was creating an Iowa-based Department of Government Efficiency.

[Grassley] Wasn't that exciting?

I was excited about that.

[Henderson] Anyway, but part of that was to find efficiency at the local government level.

Iowa has 99 different counties, hundreds of different cities.

Is that part of a conversation to reduce the amount of local government?

[Grassley] Yeah and I think I appreciate the Governor bringing that up and she has always brought proposals to us that are very forward thinking and outside of the box.

And I've been saying when it comes to property tax -- so this, like you said Kay, my 19th session, whenever we've talked about this even going back to I think 2013 when we had split control of the legislature, all we ever have talked about is the revenue side of the table and I think for too often we haven't talked about the spending side of it.

Now again, it gets back into the complications of why property tax is so hard because levels of local control.

But we do need to have a service and an expenditure conversation if Iowans truly believe their property taxes are too high.

You can't just talk about one side of the ledger.

So, I'm actually appreciative that the Governor brought that up as a topic.

It kind of fits into what I feel like I've been saying that this is a broader conversation than just revenue.

[Henderson] There are some, they call them 28E agreements whereby municipalities or counties share services.

Is there another wave of that ahead?

[Grassley] So I think the Governor bringing that up wouldn't necessarily be because we have a list of things that we already plan on doing.

I think the Governor, again I'm not speaking for her, but my interpretation would be that we need to make sure that we are transparent with what we're doing, that we're trying to find those efficiencies.

I don't think that means and no one in rural Iowa, we represent all 99 counties across the state.

I posted the map this week and it's very red.

We represent all of these rural areas.

And that's not our objective is just to go out and just start making mass changes overnight.

But I also think that Iowans in rural Iowa especially, or as well as in the urban centers, are feeling the pressure.

So, we need to have that conversation about where we can find those efficiencies.

[Henderson] Earlier in December or late November you announced the creation of two new committees in the Iowa House, one of which is aimed at perhaps responding to the Trump administration sending states more money in the form of block grants.

The other one is called the House Committee on Higher Education.

Why did you do that?

[Grassley] So to make sure I answer both just in case I get off on a tangent one or the other, which is quite possible.

But when it comes to the federal and other funds committee that we created, being former appropriations chair you know I wasn't going to let you get out of here without talking something about the budget.

But we have a lot of dollars at the state that not only are what we call offline, that aren't in everyday line item appropriations, they are funds that exist within state government but we also get a significant amount of federal dollars.

And I think that there has been a willingness, as you said, from the Trump administration to work with states to give us flexibility and that is why I created that committee because I would love to see Iowa be a leader in saying, we don't want to be treated the same as Illinois or California or New York, we have a different way that we'd like to implement these programs at the federal level.

And for the last four years under the previous administration, we didn't feel here in Iowa we had a very good chance of getting those.

But now that we have an administration that is going to be sworn in that we hope that we actually have a willing partner in Washington to give states the flexibility so we can respond.

I really believe states can respond so much more quickly than the federal government to needs within their states and giving us that flexibility.

To the Higher Education Committee, we've always had one education committee and I don't want to devalue the education committee that has dealt with K-12, but I think it's important for us if we're serious about workforce, property taxes and workforce, two of the most important issues that we plan on focusing on and we've tried to go down this path and starting when it comes to workforce and higher education.

But I've wanted to make sure we bring even more of a spotlight to that.

Employers across the state keep begging us to help find solutions for that.

I think one of those is in the fields that we're turning our from our universities and higher education systems.

And so, we need to fully put a spotlight on that system to make sure that we're getting the taxpayer value that we expect.

So, I created those two committees, number one I think it's important for us to have those conversations.

But I think we have great opportunity right now to take some action on both fronts.

[Henderson] How do you guarantee academic freedom at institutions in Iowa City, Ames and Cedar Falls, which is close to where you live, while you have people who are, for example, criticizing the University of Iowa for creating a new school of social and cultural and sort of merging programs?

Is that micromanagement that you're okay with?

Or is that what you hope this committee pursues?

[Grassley] Well, I wouldn't -- so for the amount of money that we invest as taxpayers I don't think anyone accusing the legislature of micromanaging.

I think that is actually our accountability efforts need to be not micromanaged on a day-to-day basis, but when it comes to the funds that are being expended at the Regents institutions, I think that is extremely important.

We had a bill last year, for example, I know that some have said why don't you guys just become -- we had a bill that would have placed legislators, I can't remember if it's two or four, as ex officio members on the Board.

So, we have a willingness to want to be very engaged in this process.

Again, getting back to the topic of workforce that we have talked about as I've been in the entirety of my speakership as an issue and if we're going to do things we have to be very serious, bold.

We created the high demand scholarship fields a few years ago to try to make sure that our taxpayer investments are turning out the degrees to fill Iowa's workforce needs.

So, we have started down this path and we know it's not an overnight solution.

But I wouldn't look at hundreds of millions of dollars of taxpayer funds that are going to our higher education institutions as us micromanaging if we want to make sure those are being used wisely.

[Murphy] Just philosophically before we move on, I think people would say to you that's what the Regents are for, that they're the experts in the field, that is why that was established to help ensure that those hundreds of millions are -- [Henderson] He's talking about the Board of Regents.

[Murphy] Yes, the Board of Regents.

So, what would be your response to why the legislature needs to be more involved?

[Grassley] And I would say number one, that's why we had the bill to make sure that it wasn't just us saying we're going to manage from inside this rotunda, that we'd be even willing to put members as ex officio non-voting members on the Board.

But I also look at it from an accountability standpoint when we're budgeting, from my perspective as the former appropriations chair -- that's twice now I got that in, Kay -- but as former appropriations chair it's extremely important to me that every dollar is being accounted for and it is going for the best value for the taxpayer.

It kind of fits into the conversation about property taxes.

There is a reason why we feel that we're in such a strong financial position as a state and it is because we have done things like this.

[Sostaric] Since you keep mentioning the state budget, the Governor is proposing using about $700 million dollars of various reserve funds to cover the gap between her proposed budget and then the state revenue that is projected, which is going down because of the tax cuts.

How comfortable are you with starting to use the state's savings to cover the budget?

[Grassley] And I think when we were putting together any of the last tax packages, as the Governor said we've passed several over the last few years, but as we were putting all of those together there is a reason why we felt very confident and still do that we were able to do that.

We're currently sitting on roughly $6 billion whether it's our cash reserve account, our ending balance account or our taxpayer relief fund.

Some are going to say well that's just one-time money, you're putting the budget upside down.

I think when you have roughly a $9 billion budget and you have $6 billion in reserve accounts that's not one-time money, that is money that was an overpayment from the taxpayer that we built in there on purpose and put mechanisms in place to start pulling money out of those.

I always want to remind folks that that is a big part of this is as we've gone to 3.8%, we've built up over $3 billion dollars in the taxpayer relief fund and we set up mechanisms to pull money out of that, again, with the purposes knowing that we could see some short-term revenue decline, which we obviously have seen.

But I think with some optimism that we're seeing in the economy, with the new administration, plus the things we continue to do here we planned for this to happen and I think we feel very strong about the way it's playing itself out.

[Sostaric] If there is an economic downturn in the near future, for example, does that concern you that what you hope will happen won't happen?

[Grassley] Again, if we were sitting on $600 million that was excess money and we were losing $400 to $500 million a year because of some revenue declines -- keep in mind we don't expect these to be permanent.

When you cut taxes and, again, with some of the optimism we see in the economy we expect to see revenue growth.

I was thinking about this as we've been talking about the budget.

When we took control in the Iowa House in 2010, we were looking at a $1 billion shortfall.

Today, after about 15 years of House republicans being in control, we're looking at a $6 billion dollar surplus.

That's a $7 billion swing because of the growth in our economy and the decisions that we made here in the legislature.

We feel pretty confident that as we make projections moving forward and make these decisions that is why we're able to do the things that we've done.

So, we have a high level of confidence that this is going to work.

[Murphy] Want to go back to another thing the Governor mentioned in her address earlier this week.

She has -- and this is something republicans were talking about before the session regarding work requirements for Medicaid recipients -- and the Governor has said she plans to basically take that into her own hands, have her Health and Human Services Department apply for a waiver, a federal waiver, to just enact that.

Are you comfortable with that from the legislative seats?

[Grassley] So from a standpoint of Pat Grassley on where I stand on the issue, I would be supportive of that.

I would say it kind of falls back into our earlier conversation I had with Kay when it comes to I still think the legislature may be in a position where we could look at also doing something just to show a level of support from the legislature, that it's not just a request.

I haven't had those conversations with the Governor.

I guess my ultimate point is those are the kinds of things that we plan on looking at in our federal package.

[Henderson] So you think she has the authority to do it without legislative action?

[Grassley] I haven't even engaged in that conversation with the Governor.

I've been aware that this is something that is out there.

I haven't had a conversation on what the details are of it.

But what I would tell you is if legislative approval is what ends up ultimately being needed I think you would have a willingness from House republicans to engage in that.

But either way I think you're going to see us looking at federal programs like that and that is a perfect example of this administration gives us that opportunity.

[Sostaric] There are some Iowans with disabilities who rely on Medicaid.

They have been asking state lawmakers to remove income and asset limits so that they can participate more in the workforce, work more without losing their Medicaid benefits.

Would you consider that approach too this year?

[Grassley] I think I'd be more than happy to take a look at it.

It's something, to be honest with you, I haven't put a lot of study into to have some background.

But I think we should be looking -- here is what I've been telling every group out there when it comes to federal programs that have strings attached, that we have to receive waivers for or things at the state level -- we're willing to look at all of those things.

That doesn't mean we'll be able to do them all or we'll agree with all of them.

But I think we have a tremendous opportunity to try to work with this administration to get some autonomy over our state.

So, if there are some ideas out there regardless of whether I would agree with them or not, I definitely want to see what they are.

[Henderson] The Governor outlined a series of proposals that she says will increase eventually the number of doctors practicing primarily in rural areas of the state.

It would withdraw some of the directives the legislature has done by having some of these programs like for psychologists.

Are you comfortable with the direction that she is going in regards to that?

[Grassley] Well, I think we look forward, again, just receiving all the information we want to have further conversations.

I think that you're going to see a willingness from us to engage in a conversation for more health care in rural Iowa.

That's an issue we started looking at residency programs and I know that talking about what loan forgiveness and loan repayment, all of these conversations I think are going to be welcome, especially for those of us that are in rural Iowa.

We know there is that shortage and we have to have a willingness to incentivize individuals to want to stay in Iowa.

We're doing a great job of educating them.

We just need to be educating more and making sure they're staying in Iowa.

And from the rural Iowa perspective I think that's extremely important.

[Sostaric] The Secretary of State is proposing a bill that would let him remove people from the voter registration list if he can't confirm their citizenship status.

Is that the right approach do you think to addressing concerns about the citizenship of voters?

[Grassley] So I have not been able to meet with the Secretary of State at this point.

I think we have some meetings coming up soon to learn more about that proposal.

On election law I think we have always tried to be very forward thinking, making sure that there was election integrity and that Iowans had confidence in our elections.

So, I would look forward to that conversation with Secretary Pate.

[Henderson] He is also proposing some changes in the recount rules to standardize them.

There has of course been a couple of congressional districtwide recounts recently.

Is it time for the legislature to make sure every count does it the same way?

[Grassley] We've had some preliminary conversations and I can't remember what the fate of every single piece of legislation was, how far it made throughout the process, but I know we have some members that have also been engaging in that conversation to make sure -- we've had some very close elections, as you know, and to make sure that there's clarity in that I think is something we would want to engage in.

[Henderson] We have less than a minute left, Mr. Speaker.

[Grassley] Oh, that's difficult for me, Kay.

[Henderson] You had a group of your House republican members who were in Charles City this year again asking for legislative action in regards to pipelines.

Is that issue moot now?

Or do you expect the House to vote again on some sort of pipeline related proposal?

[Grassley] My expectation is you will see some sort of action when it comes to pipelines, property rights.

What I'd love to see is the House and Senate able to move bills forward, even if they don't agree, that we're both bringing this topic.

But I fully expect to see something on property rights and the other things that come with that conversation we've had over the last few years.

[Henderson] Like land restoration?

[Grassley] All of those things being on the table.

We'd love to be able to find some common ground with the Senate and make sure we're protecting landowner rights.

[Henderson] Mr. Speaker, we thank you for allowing us to be here in the House and for joining us today and answering our questions.

[Grassley] Thank you.

[Henderson] You can watch every episode of Iowa Press at iowapbs.org.

For all of the hardworking Iowa PBS crew that have hauled all of this stuff up and down staircases, thanks for watching today.

♪♪ ♪♪ Funding for Iowa Press was provided by Friends, the Iowa PBS Foundation.

♪♪ The Associated General Contractors of Iowa, the public's partner in building Iowa's highway, bridge and municipal utility infrastructure.

Elite Casino Resorts a family run business rooted in Iowa.

We believe our employees are part of our family and we strive to improve their quality of life and the quality of lives within the communities we serve.

♪♪ Across Iowa, hundreds of neighborhood banks strive to serve their communities, provide jobs and help local businesses.

Iowa banks are proud to back the life you build.

Learn more at iowabankers.com.

♪♪