♪♪ Most of Governor Kim Reynolds' top priorities made it through the legislature this session.

We'll talk with the Governor about her agenda and what's ahead on this edition of Iowa Press.

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

Celebrating 50 years of broadcast excellence on statewide Iowa PBS, this is the Friday, May 12th edition of Iowa Press.

Here is Kay Henderson.

♪♪ Henderson: Our guest today has been Iowa's Governor since May 24, 2017.

Last November she won re-election to a second term in office by an 18.5% margin.

In January, she asked legislators to pass a package of state-funded education savings accounts for private school expenses.

They did so.

And the legislature adjourned just recently.

We have Governor Kim Reynolds at the table to talk about the 2023 legislative session and what's ahead.

Governor Reynolds, thanks for returning to Iowa Press.

Governor Reynolds: Happy to be here.

Thanks for the opportunity.

Henderson: Also joining the conversation, Dave Price of WHO-TV and Erin Murphy of the Gazette in Cedar Rapids.

Murphy: Governor, Kay mentioned the ESA bill that was signed into law early in the session.

We've already heard some reports of some private schools out there raising their tuition.

Does that in any way defeat the point of this financial assistance by offsetting the new assistance that students would have to go to these private schools?

Governor Reynolds: Yeah, I don't think it does.

I mean, all schools are experiencing increased costs.

We had public schools talk about it too and that is why every year we look at a state supplemental aid payment because we recognize that there are increased costs.

We'll monitor it.

But they'll be able to use their foundation, the tuition tax credits as well as the ESA.

And the other component of it is just typically your private school educators were paid considerably less than public school teachers and so this will allow them to maybe be a little bit more competitive.

But we'll monitor it.

We talked about it and I think they'll be okay.

Murphy: And you mentioned that the teachers, if the private schools don't also increase teachers, do you see a future role for the state in that?

Might the state require a certain level -- Governor Reynolds: No, I don't think so.

Each year we'll set the state supplemental aid and that will apply to the ESAs as well as to the public schools per pupil funding.

And so, they'll see some increased revenue every single year as well as the public schools.

So, like I said, we're just getting started.

We're going to open up the system on May 31st.

And any time you pass transformative legislation like we just did, a lot of times there is clean up that needs to happen in the follow up years.

And so, we'll continue to monitor that.

And it's just like we passed, we provided flexibility to our public schools and I made it very clear that we're going to continue to work over the interim and continue to look at Chapter 12 working with our public school administrators to see if there is additional things, additional burdens and requirements that we can relieve them of to give them more, continue to give them more flexibility so that they can be innovative and competitive.

So, I look forward to continuing that conversation as well.

Price: Governor, I've probably heard you a time or twelve talk about how republican governors are competitive.

Governor Reynolds: Very.

Price: Speaking of education, in Arkansas Sarah Huckabee has done ESAs this session.

She also had an initiative to raise public teacher pay.

I believe we are still below the national average.

You all didn't do that this session.

Is that something you could see next year as part of a package?

Governor Reynolds: Mm-hmm and I'm already talking about that.

That's something, this was a pretty big package that we put together this year.

But that was one of the things that as I talked to rural administrators and worked with rural legislators, the two concerns were the Chapter 12 flexibility as well as being able to be competitive for teacher salaries.

They weren't able to pay a lot of times as much as some of the more urban school districts were able to pay.

And so, in the legislation that we passed we provided some flexibility and categorial funding that allows all school districts to roll some of that funding into teacher salaries.

It can't go into administrators, it can only go to increase teacher salaries or hire additional teachers.

So, we have given them a mechanism to do that right now.

And then we'll take a look at that next year.

So, continue to work on Chapter 12, looking at teacher's salaries moving forward and then just really looking at literacy and working with the bottom five percent of our school districts making sure that we're getting them the resources and the tools, we have teams that are going in and working with them, but to continue to really drill down on that so that we're making sure that every student has an opportunity to succeed and be successful.

So, stay tuned.

There will be more to come next year.

I'm really excited to work on that over the interim.

Henderson: You have a child labor bill on the way to your desk.

During debate there were folks who said on the Senate floor that it was not about filling open jobs, it was about giving students more opportunities to work while they were teenagers.

Which is it?

Governor Reynolds: Well, it's probably a little bit of both.

Honestly, it helps fill a need and it allows kids to earn a little bit of extra money, maybe start saving for college or to buy that first vehicle.

You know, I was over -- I'm such a proponent of work-based learning, registered apprenticeship programs and giving kids the opportunity to work.

I think it teaches them, first of all, it gives them a chance to raise money, it teaches them to balance their schedule and not only focus on school but also balance their timeline.

But I was in the Quad Cities yesterday for a registered apprenticeship signing and we had 72 kids there that were signing an agreement to work with an Iowa employer, staying in the state and much of that started with giving them the experience to connect and work with employers at an early age.

So, it builds relationships, it helps them find what they have a passion for and hopefully keeps them in our community.

So, it's both.

Henderson: Are you disappointed that the bill was dialed back from its original form?

Governor Reynolds: Well, that's the legislative process.

So, that's what it takes to get bills through both chambers and to my desk.

And so, I wish I would have brought that paper with me.

This is really common-sense practical things that are included in that bill.

And I think it was a good piece of legislation and I look forward to continuing to review it and probably sign it.

Henderson: One thing that is in there is a study about letting, in the graduated driver's license process for teenagers, letting them drive to and from work.

What is your advice to legislators in regards to that?

Governor Reynolds: Well, I think the study is great.

I think we need to be careful.

We need to be practical.

They need to have some experience.

But they're kids, they get distracted, and so that is why I think the study is probably a good idea to just make sure that we're thinking about every aspect of that.

We've seen the graduated driver's license process change over time.

Cell phones have kind of brought a new element into that.

So, we just have to be really careful about that.

Murphy: Governor, when you and Statehouse republicans in 2018 signed the six-week fetal heartbeat abortion ban into law it was among if not the strongest abortion regulation in the country.

Since then other states have gone beyond that and signed even stronger restrictions.

Did those states go too far in your mind?

Governor Reynolds: Well, I appreciate the legislation that we were able to get passed.

I was proud to do that.

I have made it very clear I am pro-life and will do everything I can to maintain the rights of the unborn.

And so, we are working through the process and we'll wait and see where the Supreme Court ruling lands and we'll make decisions after that.

But I'm hoping that they make the fetal heartbeat bill law.

So, I'm hoping that we get the ruling that we're looking for and hopefully we'll know that I think by June at the latest.

So, we'll wait and see what happens with that ruling.

Price: Over the last several years you have pushed the idea of kind of behind-the-counter birth control access.

The caucus has not gone along with it enough and you have some folks who fundamentally maybe don't want birth control at all.

You have huge numbers in the House and Senate right now.

How do you go at it next year?

And will you again?

Is there a different way in on this?

How does this happen?

Governor Reynolds: Well, we're going to continue to fight for it because I think it's the right thing to do.

I think that's part of protecting life.

That's a part of that conversation.

We got it through the Senate this year.

And the House is where it continues to be held up.

And so hopefully we can continue to work with the legislators and continue to just educate them and talk about why we believe it's the right thing to do.

And hopefully, we've tried a lot of different paths, Dave, to get there and we haven't been successful yet.

So, I love a challenge, so we'll keep working on it and hopefully we'll get that across the finish line.

Henderson: Governor, the legislature set aside $500,000 more dollars for your office.

Will you use that to raise salaries or to hire new people?

Governor Reynolds: Well, that's part of it.

I am managing a large business in state government, it's an $8.5 billion budget and that's just state funding.

It's 10 point -- when you consider the federal dollars that come in as well.

So, that could be a part of it.

I want to make sure that I've got the right team around me and that I've surrounded myself with qualified people.

I have a phenomenal team.

We have a very small staff.

But also, with being able to do what we did with the cabinet I have a lot of resources in my state agencies as well.

So, it's a combination of that.

Henderson: Speaking of the cabinet, you've also been given authority to raise the pay for a group of state agency directors.

What sort of constraints do you feel, if any?

Governor Reynolds: Well, the budget is the constraints and that is the pitch that I made to the legislators.

They still ultimately, they have the ultimate decision by setting the budget.

They have to, if I increase the salaries of the directors that I have asked to serve in that capacity it has to fit within their overall budget.

They have been absorbing that since 2011 to be quite honest, the increase in health care costs and salaries.

Most of the agencies haven't received any additional funding.

So, they have figured out a way to do that.

But I think by streamlining state government, cutting 22 agencies from my cabinet and really operating a more efficient and effective manner, we're projected to save about I think it's $215 million over four years.

I think that's conservative, it's a projection.

So, we'll wait and see.

But I think we'll continue to do things more efficiently, more effectively, which will allow us to serve Iowans better.

There should be some cost savings in that that they'll be able to roll into the -- Henderson: Legislators have complained because county compensation commissions are sometimes raising county official's pay by double digits, in some cases 52%.

Do you have any top frame that you're not going to raise a state agency director above a certain percentage?

Governor Reynolds: Well, that's why we have elections.

So, if county officials are raising salaries to a level that their constituents don't agree with, then I think that will hopefully take care of it at the ballot box.

That's what elections are for.

So, the budget is the constraint.

When I take a look at setting salaries we will do a comparison, I did this with the study that we put in place actually when we looked at consolidating and aligning government.

That was a component.

We looked what other states were paying similar agencies.

So, we've got a great comparison to go by.

I'm asking these directors to do a lot.

They're taking on additional responsibilities.

I want to make sure that we're getting the best and the brightest in those positions.

And I believe that, Kay, I'll be able to justify whatever salary that we set and I'll have no problem talking about that because of what we're asking them to do, the additional agencies that they're taking on as we roll them into the cabinet.

So, we'll be ready to make that argument and justify what we do to really get top talent.

Everybody is looking for talent, workforce continues to be a big issue.

Everybody is increasing what they're offering employees and leaders in executive positions and really state government can't be that much different or we won't get good people.

Price: If I can jump in here, you're the CEO, is it weird that your agency directors could make a lot more than a governor?

Governor Reynolds: Well, there's more than the agencies that make a lot more than the governor, even if you look down -- Price: Is that weird?

Governor Reynolds: Well, it is what it is.

That's probably something that needs to be adjusted at some point too, really.

But that's really a hard thing to do and it would probably need to be done for whoever the next Governor is.

It's just really hard, Dave, to advocate.

It's probably not wrong.

But again, you want the best and the brightest running for these positions.

But I don't probably see that happening any time soon.

Murphy: Governor, one of the bills if not yet to your desk will be soon waiting for your signature deals with the State Auditor's Office and defines some specific information that the auditor wouldn't be able to get a hold of or if there was a disagreement about this, and this is the part I wanted to ask you about specifically, would create an arbitration process that includes the Auditor's Office, the agency that is the subject of the investigation and then the third person would be appointed by your office.

How do you assure Iowans that that process, which is now the final stop -- that's the other thing the legislation does, it takes away the Auditor's ability to take that arbitration panel's decision to the courts, the arbitration panel's decision would be final -- how do you assure Iowans that that panel with your office's appointee on it would be an objective process and not a politically motivated one?

Governor Reynolds: Well, first of all, this arbitration process has been in place for 60 years.

The private sector uses the arbitration process.

This is -- he's part, the Auditor's Office is part of the Executive Branch and I think Iowans expect the Executive Branch to be able to work things out.

It puts a process in place that allows us to do that.

They have a time limit in which they need to come to some resolution.

But I think it's ridiculous -- if my agencies have some conflict we bring them in, we set them down and we ask them to work it out.

And for the first place to go or to go to the courts to have an Executive Branch agencies competing against each other, the taxpayers have to pay for it twice, and I just don't think it's unreasonable that we can't come to some resolution through the arbitration process.

Murphy: Have there been any examples that you can point to where the Auditor's Office has gone too far -- Governor Reynolds: I think there's several out there.

The Constitution states that there shall be an Auditor of State and it's the legislature's responsibility to set what those duties are.

This doesn't limit his access to information but it does say that just information that he's curious about he doesn't have access to that.

So, that is the legislature's role and responsibility to set what the Auditor's responsibilities are.

They have done that.

We'll take a look at it.

I have 30 days to make a decision on that piece of legislation and we'll do that.

Price: With the prior Attorney General and it was Tom Miller, the democrat, you had that agreement that he would consult with you before he joined multi-state lawsuits.

Do you have that same arrangement with Brenna Bird now?

Governor Reynolds: No, that was subject to Tom Miller.

He came to me and asked if we could work that out and we were able to do that.

We did it in an effective manner.

And that was between Tom Miller and my office.

Price: And I believe the new legislation will give the Attorney General more authority to deal with local matters that a county attorney is dealing with.

I think Ron DeSantis in Florida had a situation where he then removed a county attorney for not being willing to follow law on some things.

Can you see yourself doing that same thing?

So, if we had a county attorney who did not want to prosecute drug cases or whatever it was -- Governor Reynolds: I'm not going to speculate until I'm actually faced with the situation.

But I think the law that you're referring to, I think that was already, they already had the ability to do that -- Price: In Florida?

Governor Reynolds: No, in Iowa.

So, the Attorney General's Office already had the ability to do that.

I think Attorney General Miller had been in office for 40 years and had just never really addressed it or had a different approach to it.

And so, I think the language that the legislature passed that they asked for just really clarified that they have the, that they can do that if they so choose.

But I'm just not going to speculate on what I would do until we have a case before us.

So, she has the ability to do that now but she had the ability to do that, they clarified her ability to do that and put some clarifying language in place -- Price: Do you want her to consult with you before it became, before she took that kind of step?

Governor Reynolds: Well, I don't know if she needs to do that.

But we meet, we're going to try to meet on a monthly basis.

I think that's smart to have that connection and that communication.

And so, we're trying really hard to keep the communication between the two offices in a good place.

Henderson: You have said your goal at the end of this current term is to eliminate the Iowa income tax.

The state is also, it has not just $1 billion, not just $2 billion, but billions in reserve and in different accounts.

Why isn't that money being returned to taxpayers now?

Or are you hanging onto it in case the income tax thing doesn't work?

Governor Reynolds: Well, so it's a backup.

It's there for that reason, to reduce the tax burden on Iowa.

So, Kay, when we do a two and a five-year projected budget we do start to eat into the taxpayer trust fund a little bit.

We wanted to make sure that with some of the challenges that we're facing at the federal level, the potential recession, which we're teetering on right now, we wanted to kind of monitor Iowa's economy, let those current tax cuts that we have put in place, see what the impact of those are and if we continue to see the health, the fiscal health, financial health that we are seeing with Iowa's economy we'll come back next year and we'll start to utilize hopefully some of those funds to bring down the tax burden on Iowans.

You talked about governors being competitive, we have 15 colleagues, I have 15 colleagues this year that are trying to get tax cuts through their legislature across the board.

Everybody is bringing them down.

And so, we can't just stay still, we're going to have to continue to look for ways that we can be competitive and bring those down.

So, I'm really excited about just the feedback that we're getting with not taxing retirement income beginning this year is exciting.

People are making different decisions because they don't have to leave the state and go to Florida or Arizona where the tax burden is lower.

They can now stay here and go down there for maybe two months during January and February and enjoy some warm weather.

But they're going to stay Iowa residents and that is good because they have discretionary funds that they spent in our Main Streets and our communities, they volunteer and they're just a really valuable asset that we want to keep here in Iowa.

So, those are really good things.

Henderson: Last week on this program Speaker Pat Grassley said the legislature needs to have a conversation about tax policy and the right display of income, sales, property, those kinds of things.

If you eliminate the income tax, do you have to readjust the sales tax, number one?

And number two, how do you replace the income tax in a state budget where it accounts for about half of state spending?

Governor Reynolds: Well, so you grow, revenues grow because we have a lower tax burden.

But all of that is a conversation.

We have to look at tax credits.

We have tax credits in place because, Kay, we weren't competitive with other states and that's how we tried to bring, make us more competitive.

So, that is part of the conversation.

We need to take a look at the funds and the taxpayer trust fund dollars that we're sitting on.

That's part of the conversation.

We need to look at, I said we took some initial steps this year with property tax reform.

But really what it does is it kind of starts to lay the foundation to continue that discussion going forward.

So, all of that will be on the table as we try to figure out how we reduce the tax burden on Iowans.

But we do it in a responsible manner so that we can still honor priorities that are important to Iowans while continuing to look for ways to reduce the tax burden and make us more competitive.

And we have a history of doing that.

I mean, the very first tax cut that I signed into law I think in 2018, we had triggers in place because, again, we weren't sure what was going to happen with the ag economy at that point, which is really a significant piece of our economy.

And so, we wanted to monitor that.

We made it through those two years and eventually removed the triggers and we're going to continue to see hopefully growth from the decisions we've made.

Murphy: Governor, real quick, you have, as you mentioned, 30 days to sign these bills.

There's a lot coming your way from the last few weeks of the legislative session.

Are there any you're planning to veto?

Governor Reynolds: Well, we're still reviewing them so I'm not going to say yes or no.

They passed quite a few at the end.

Once things started moving, I thought we were going to have maybe a low number of bills this year, but boy once things started moving that number increased quite a bit.

So, we're going to sign quite a few bills today that we have received and we'll continue to look through them.

So, I just don't know at this point.

Price: Let's talk 2024 presidential here.

You have said that you are remaining neutral in this process.

You have some candidates coming through our state saying, time to turn the page from the Trump era.

This past week we saw the civil judgment against the former President for an incident from a couple of decades ago.

Since you have been Governor, while I don't know that I've heard you talk about it a lot publicly, it seems anecdotally like you have worked to elevate women, but I see you when you speak to groups clearly with your staff and some of your hiring decisions.

Does a decision like this jury decision, the civil judgment against the former President, does that bother you?

Governor Reynolds: What bothers me is what I see happening at the southern border right now.

What bothers me is an ineffective President and administration that is allowing the invasion of our country.

That's what we should be talking about.

We should be talking about what is happening right now.

That should be the topic of conversation.

Title 42 is just about today.

Is it today?

I don't know where -- they let that go away, over 5 million illegal immigrants that have entered this state, look at what is happening with fentanyl.

It is unconscionable the number of young people that are being killed by fentanyl -- Price: But all of this stuff can matter, right?

Are you just not going to weigh in on these individual things?

Governor Reynolds: No, why should I?

Let's focus on the big picture.

We are facing a recession.

We are seeing the cost of living escalate.

We are seeing women's rights being decimated.

We are seeing a border that the cartel are operating.

I don't even know how they're doing what they're doing down in Texas and Arizona.

I feel so sorry for those border communities.

I have to deal with the fentanyl that is pouring into my state and every other state in the country.

Let's get our priorities straight.

Let's figure out who is going to have the resolve to step into this position and make the tough decisions that are going to have to be made to turn this country around.

We can't continue with what we're continuing.

It is a national security issue.

We don't know who is coming across the border.

They're lining up for miles.

It's going to get worse.

It's just, it's untenable what we are facing right now and somebody needs to step up and do the right thing.

It's intentional or they would be doing more to stop this and to send a message that we are a country of laws and that we should respect the border.

Henderson: Three and a half years left on your term.

Will you serve all of that term and stay in Iowa?

Governor Reynolds: My goal -- yes, I've talked about what I'm working on next year.

I'm excited about continuing the momentum that we're seeing.

I mean, I can't -- I don't know what's going to happen.

But my intent is to continue serving the citizens of Iowa as Governor.

I love what I'm doing.

Henderson: We can't continue this conversation because we're out of time.

Thank you, Governor Kim Reynolds, for joining us today.

Governor Reynolds: Thank you.

Henderson: You can watch every episode of Iowa Press online at iowapbs.org.

For everyone here at Iowa PBS, thanks for watching.

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