♪♪ July brings a new slate of state laws and a litany of additional issues across the state.

We get an update from Iowa reporters 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.

Iowa PBS is supported in part by Wells Fargo.

Fuel Iowa is a voice and a resource for Iowa's fuel industry.

Our members offer a diverse range of products including fuel, grocery and convenience items.

They help keep Iowans on the move in rural and urban communities.

Together we Fuel Iowa.

Small businesses are the backbone of Iowa's communities and they are backed by Iowa banks.

With advice, loans and financial services, banks across Iowa are committed to showing small businesses the way to a stronger tomorrow.

Learn more at IowaBankers.com.

♪♪ For decades Iowa Press has brought you politicians and newsmakers from across Iowa and beyond.

Celebrating nearly 50 years of broadcast excellence on statewide Iowa PBS, this is the Friday, July 16 edition of Iowa Press.

Here is David Yepsen.

♪♪ Yepsen: The month of July begins a new fiscal year for the state of Iowa and new laws going into effect on July 1st.

Iowans are also keeping watchful eyes on the state budget, an ongoing drought and recent headlines about water quality.

To check the pulse of Iowa issues we have gathered a reporters' roundtable.

Perry Beeman covers state government and Iowa issues for The Capital Dispatch.

Erin Murphy is Des Moines Bureau Chief for Lee Enterprises.

And Kay Henderson is News Director at Radio Iowa.

Yepsen: Perry, welcome to the show.

This is your debut appearance.

You have worked in Iowa journalism for a long time with the Register and the Business Record.

Tell us what The Capital Dispatch is.

Beeman: So we're a non-profit online news operation and we cover state government, public policy, things like that.

Yepsen: Great, we're glad to have you.

Beeman: Thank you.

Yepsen: I want to go around the table.

We'll start with you, Kay.

What is the mood of Iowa?

What are you seeing, sensing, feeling out there about Iowa?

Henderson: Well, business owners are worried about hiring.

Farmers are worried about the crops.

A little bit of rain makes people happy.

And the upcoming football season is making people really happy.

So the mood is sort of perking up.

Yepsen: Right, because we can legally drink Iowa City now.

Perry, what are you hearing?

Beeman: Well, I think the mood is upbeat.

I think because we're kind of emerging a little bit out of the pandemic, some of us have the vaccinations and so things are much more active.

The business people are optimistic even though they are having these workforce issues.

Yepsen: And Erin?

Murphy: Yeah, if the recent 4th of July holiday is any indication people are excited to be out and enjoying summer to the fullest.

Again, my neighborhood at least anecdotally was awash with fireworks.

So as Perry said, we're emerging from the pandemic and I think it's kind of a natural time, we're going into the summer months too, so I think it's a generally positive mood out there.

Yepsen: Right.

I want to start into some issues.

I want our viewers to understand that we're taping this show on July 9th just to accommodate schedules.

Perry, I'll start with you.

Water quality.

This has been your forte for years as a reporter.

Reports seem to be getting worse about the quality of Iowa's water.

Beeman: Yeah, I think we're in a position where in the last 40 years we've done a good job of cutting down on sewage pollution, pollution from pipes, the end of pipe type of pollution from factories.

But on the ag side we're having some challenges.

The University of Iowa says that one of the key components of pollution from crops has doubled in recent years.

So we have a lot of work to do.

Yepsen: Kay, is there legislation in the works to do something about this?

Henderson: Well, interestingly as Governor Kim Reynolds signed a budget bill near a lake in North Central Iowa last year she mentioned that next year people will be back at the Statehouse talking about spending money on water quality.

And let's not forget that before the pandemic hit she was proposing something she called the Invest in Iowa plan, which raised the sales tax, reduced other taxes, but dedicated not exactly a boatload but a lot of money toward water quality.

So I would expect her to make a proposal in terms of spending more state resources on water quality projects, incentives.

Yepsen: Erin, we're hearing a lot about a thing called carbon sequestration out of the farm community as a way to clean up our environment.

Explain this.

Murphy: Yeah, so that is gaining a little more traction.

You're hearing people like republican Senator Chuck Grassley talking about it.

It's taking crop land out of production and instead putting in plants that will help capture carbon dioxide out of the atmosphere and there is talk about using the government to incentivize those kinds of programs.

Already we have critics of that type of program too calling it just a cash grab for farmers because there's some disagreement over the extent to which that is helpful to the overall solution.

Yepsen: Perry, are we any closer in Iowa to getting a resolution to this problem, the legislation, these ideas that are floating around?

This has been an issue for a long time.

Are we getting any closer to some kind of resolution?

Beeman: I think there is, on the water quality in general, there's a lot of collaboration going on.

There are a lot of task forces, there are a lot of attempts to collaborate.

There of course was the famous lawsuit with Water Works that was dismissed.

I think we're getting closer in the sense that there are some small demonstration projects and maybe more of them but it's the scale of this problem that really makes it seem insurmountable at times.

Henderson: Perry just mentioned the Des Moines Water Works lawsuit, which I believe was in 2017.

Is that when it was, Perry?

Beeman: I think that's right.

Henderson: But recently there has been another lawsuit that was brought by a different coalition and it was dismissed by the Iowa Supreme Court and the court was fairly specific in its ruling that this is not something for the courts to resolve.

This is something for elected officials to resolve.

So they have thrown it to the legislature and to the executive branch to come up with solutions.

So I would not expect the court fight to be where this is waged.

This is going to be focused now on policy makers.

Yepsen: Erin, urban rural split?

Murphy: Yeah, and it always eventually comes back to mandatory versus voluntary participation in some of these programs.

So that is usually at the heart of all of these debates whether ag producers should be required to do some things versus incentivize to do some things and that debate has never settled itself and that is why we kind of just see baby steps.

To Perry's point, there's a lot of things happening but it's on a smaller scale than what we need to ultimately tackle this.

Yepsen: Perry, here in Des Moines they're talking about spending millions of dollars on trails and activities along the Des Moines River.

If the river is so dirty, why are they spending all this money and time fixing this thing up?

Beeman: Right, well the backers of that project will tell you they are trying to address the water quality at the same time.

But let's just say the Des Moines River is a very large water shed so that's a very large task.

There are certain activities like kayaking where you may not be at much risk, you're not drinking a lot of water, you're not getting a lot of it on you, but if you're going to be swimming and things like that you'd have to take some precautions.

So I think that they are aware that that's an issue, and it will be an issue, it's $120 million project in Central Iowa and all of those streams need some work.

Yepsen: So it's okay to kayak but just don't drink the water while you're doing it.

Beeman: That would be a bad idea.

Yepsen: Erin, let's switch gears.

Another big issue, the surplus, the state surplus, the Revenue Estimating Conference issues a forecast, the state has come in and said, no it's better than that.

Murphy: Yeah, this was pretty remarkable.

The LSA, which is the state agency, non-partisan that analyzes and crunches these numbers said, and granted we're coming out of a pandemic here, but that the growth was actually 19%, which is just amazing that the state revenues are going to surpass $81 billion.

So I wrote down some words here.

My colleague and partner in crime at the Gazette, Rod Boshart, reported on this for us and he talked to someone from the LSA and these are analyst types, these aren't people normally prone to hyperbole.

And the words from the quotes in that story were shocking, impressive and really odd.

So this is a pretty remarkable situation we're in and when legislators come back to do their work on the next budget they're going to have a lot of money to play around with.

Henderson: For the first time, the state collected more than $10 billion in overall revenue in the just concluded year.

And it had a half a billion dollar surplus.

And what that sets republican legislators and a republican Governor up for is income tax cuts.

The Governor when she signed, as we have mentioned on this show previously, in mid-June a series of personal income tax cuts, getting eventually rid of the state's inheritance tax and some other tax changes, said we're going to be back next year and we're going to cut taxes.

She is going to cut, she is going to propose reductions in personal income taxes.

Yepsen: Erin, were the revenue estimates being intentionally low-balled by the politicians so they could have this good cheery news and come back and cut taxes?

Or was there an error in this forecasting?

Murphy: Your first question is a fair question and I don't know the answer to that and I think that is a fair question to put to the people on that panel.

Why were you so far off?

But I will say one thing that did play in this and what some analysts have said is, sales tax, as an example, was higher than expected.

They thought maybe the pandemic would suppress spending and that didn't happen and the federal stimulus may have assisted that.

The feds sent direct checks to all Americans and they were able to spend that money out in the economy and that may have made things a little rosier than otherwise would have happened.

Henderson: And it's not a big chunk of revenue but corporate taxes were up I think 52%.

Yepsen: Kay, when they set up the Revenue Estimating Conference they did so because they wanted to get accurate estimates.

The politicians agreed, we'll have all the experts and we'll get good accurate estimates.

We'll fight over how we spend it or cut taxes, but we'll get accurate estimates.

Are those days gone?

This was an error.

What if that error was in the other direction and we were short?

Henderson: We'd be having a special session and legislators would be back in town cutting state agencies, perhaps reducing, if it was in the magnitude of half a billion dollars they would be cutting state payments to public school districts.

Yepsen: Do you think there is any thought being given to trying to look at how these revenue estimating models are working so they're not in error next time?

Henderson: As Erin mentioned, odd was one of the words that was used in Rod Boshart's story in the Cedar Rapids Gazette.

And I think that part of the answer to the question may be, I don't know this, but things got so low last time around and then they messed around or changed the deadlines for paying your taxes and then they were reported in different years and different ways and so this is, it's hard to compare apples and oranges here I think.

And so I think that was part of what the problem was.

Murphy: Yeah: would agree with that and I would add, to circle back the quotes that I said, that was not from a member of the estimating panel, that was quotes from a guy whose job is to crunch these numbers, that is what he does 365, 24/7 and he was baffled by this.

Beeman: It's worth mentioning from a policy standpoint that this kind of money means, to the republicans means another chance to cut taxes and I think that is what they would like to do.

To the democrats and others it means, are we spending enough money on mental health, on child care, on the environment and these other things that have needed more funding?

Yepsen: But between the stimulus money that is pouring into this state and these new windfall revenues, everybody is happy.

You can cut taxes and you can increase spending.

Let the good times roll.

Beeman: You could, although I don't think the GOP really wants to increase spending.

More of their focus is on the tax cuts and I think we'll see more proposals.

Yepsen: Kay, switch gears.

Pandemic reporting is being changed, the way the state provides data to us about the pandemic.

What is happening there?

Henderson: Well, if you go online and you click on the Iowa Department of Public Health, for the past year or so there have been a series of charts and reports and you can see how many people have been vaccinated in Iowa, you can see where there are outbreaks at long-term care facilities and you can see the number of Iowans that are hospitalized for treatment of COVID.

That is only going to be updated on a weekly basis from now on and eventually that data will go away, number one.

Number two, the long-term care reporting is going away more quickly.

So the other thing that I will add is that it has been really difficult for people who look at this data to compare it with data that is being collected on a national level by the New York Times, by the CDC, and so Iowans have really had to trust let's say newspapers and radio stations who are looking at all of those sources and trying to figure out what the accurate number is in terms of how many people, what percentage of Iowans have been vaccinated who are eligible and those sorts of statistics.

Yepsen: Erin, they're doing this, they're providing less information at a time when this Delta variant is starting to explode.

You look at PBS NewsHour had a graphic last week showing Iowa as one of the emerging hotspots found in the Midwest.

Is the state trying to cover up some bad news?

Murphy: It's an interesting time to do this.

In the state's defense, we are at a point overall in this pandemic where overall numbers have just completely cratered, in a positive way, hardly any cases anymore these days, hospitalizations are way down, deaths are way down around numbers that we haven't seen since the early days of this pandemic, before things really exploded.

So from that sense, there's a rationale and argument that the state can make that it's no longer necessary to update these numbers four times a day or whatever it is like we do right now.

But you raise a very good point, this variant is dangerous.

Iowa is not as vaccinated as some other states.

We're around 60% of adults right now and most public health people would like to see that, will tell you they'd like to see that number more around 70% or higher.

So we're not all the way out of the woods on this yet.

And so taking away that data right now it's fair to question if that is a wise public policy decision.

Yepsen: Perry, what would you as a working reporter want to see out of the data the state provides?

Beeman: Well, you want to be able to see the trends and I think from day one the state's information has been unreliable and I think there has been evidence that the policy has been to make things look better than they are.

We want to be able to tell people what the trends are in all the hospitalizations, how many cases are there, where are the infections, why are there hotspots in certain areas and even specific information requests to the state to sort of beef up some of that data have been rejected at times.

Yepsen: Well, if they thought the pandemic was behind us there are many in the medical field who say, hold onto your hat, this Delta variant is going to hit us hard.

Erin, switch gears.

We mentioned about federal spending and stimulus -- we're now starting to see some of this federal aid distributed.

What is happening there?

Murphy: Yeah, so the Governor recently announced another section of the federal stimulus package which will go directly to city governments for their use and that is just kind of this ongoing spigot in many ways of these relief funds that states are going to have at their disposal, now local governments are going to have at their disposal too.

They have been planning for this, they have been expecting it.

So they're getting ready to devise ways to use all of this and it's going to be interesting to see what all these local governments put this funding towards whether it's their infrastructure or public health programs, whatever it may be.

They're going to have a lot of money at their disposal.

Henderson: You know, we had a couple of mayors on the program maybe a month ago from Johnston and Cedar Rapids and what they said and what we're hearing from other city and county officials is that they can use this money to plug holes in their budget.

So, number one, it could mean that property taxes won't go up as much as it might otherwise.

Number two, they tend to use these monies for infrastructure projects.

So, if there's no infrastructure deal at the end of infrastructure week in the nation's capital, at least some potholes may be filled and some sewage plants may be improved with this money at the city and county level.

Yepsen: Perry, do republicans have a point -- some republicans in Washington are going to say, things are going along pretty well, we don't need to spend any more stimulus money.

You look at the state budget, all this money coming in from the feds.

Do they have a point?

We've got plenty of stimulating going on.

Beeman: I think you could make that point.

I think it's a valid point.

When do you stop, right?

But there are also needs like the Des Moines Airport needs a new terminal, which is a gigantic project, and some of the sewage treatment and water treatment you mentioned, even the roads there are a lot of needs.

But yes, Iowa is in good shape financially, was before the pandemic, still is.

And so it becomes a question of how much do you spend?

Murphy: And that is actually a good point just to tack onto this, David.

Infrastructure is a whole other spending package that still could be coming that will help cities with their roads, bridges, that's not even a part of this yet and that could be coming down the pipeline too.

Henderson: And that money that is coming from the pandemic relief funds that have been approved by the Trump and the Biden administrations and perhaps this infrastructure package, means that state legislators won't have to raise the gas tax any time soon because they're going to have this influx of money for the transportation system at the same time that they're seeing cars get more efficient, more electric cars, that is getting pushed down the road, that decision.

Yepsen: Well, and there's always a danger with this much money coming in this quickly, which we've never seen before, that somehow there's going to be money that is misspent.

The capacity of governments to spend this kind of money wisely is limited.

And I guarantee you, we'll all be doing, you all will be doing stories about this boondoggle or this waste that is happening.

Perry, I want to switch gears, talk a little politics.

How is the Governor doing?

Kim Reynolds looks like she's running for re-election.

What is your sense of her prospects?

Beeman: Well, I think if you're a conservative she has done very well.

The tax cuts that she has stayed pretty close to the Branstad approach to things and now her approach to things.

If you're a democrat she has done almost nothing right, hasn't spent enough on some key issues and is just heading in a completely different policy direction.

Yepsen: Kay, how do you think she's doing?

Henderson: Well, the problem for democrats who are criticizing Kim Reynolds is there is no single candidate emerging as the challenger for her yet.

They may have a spirited primary, they may have several candidates run and indeed probably will.

But as yet no one has emerged as that singular voice to challenge her on these policies.

Murphy: And the one thing I'll add, I think Perry is exactly right, she has basically governed in a way that your republicans and conservatives are going to be friendly behind her and your liberals and democrats are going to be firmly against her no matter what.

So you talk about what few of those remain, those middle of the road voters, those undecided voters and I will say the Governor has put her, dipped her toes in just enough water that she has a message for those people.

She can say she, Kay talked about the water quality, she made a big proposal on water quality.

It didn't happen but she can pin that on the legislature.

She made the proposal.

She has been a leader on criminal justice reform.

She took care of the felon voting rights issue through an executive order and she has proposed even more, that again the legislature didn't come up.

So she has done enough of those kinds of issues that she can take that message on the campaign trail too and talk to those voters who aren't, don't have their heels dug into one side or the other and might be willing to listen to work she has done on those topics.

Yepsen: And I think you have to add mental health to that list of things that she has tried to push hard.

Well, to be continued.

Kay, 2024.

Henderson: Oh, you bet.

Yepsen: It never ends in Iowa, does it?

Henderson: Exactly.

Yepsen: How do the republicans look?

Henderson: It is the perpetual campaign.

We've had both Senators named Scott here, we've had a lot of other folks, Nikki Haley, the former UN Ambassador was here in June and we're going to have more folks throughout the year who have their eyes on the White House.

But all of this is sort of happening in a sense of maybe a little bit of jiggly Jell-O because they're not breaking out yet because no one knows whether Donald Trump will be running for another term next time around.

Until he makes an announcement what he is doing I think that sort of freezes the race a little bit.

But it also probably will engage some people to come to Iowa to campaign who have their eyes on being his running mate because it's for sure he's not going to have Mike Pence as his running mate again.

Yepsen: We've got just a couple of minutes.

Quickly, Erin.

A special session is in the offing.

What are they going to do?

Murphy: The primary task, the reason they're coming back is to finish off the redistricting process.

We've had the federal census data delayed by the pandemic, population numbers to figure out our political boundaries for the next 10 years.

The open ended question, and we don't have an answer for this yet, is what other issue might sneak in there?

They don't have to do just redistricting.

They could also take up another tax cut bill, transgender athlete bans they have talked about, maybe they get that bill done instead.

Yepsen: Why wouldn't they do those things in a normal, wait until an election year?

You do something for voters now they could forget before they go to the polls.

They'll have plenty to do next year too.

Yepsen: Perry, real quickly, ethanol.

Big fights over ethanol.

Beeman: Yeah, I think we're just in for a really interesting debate.

The ethanol industry was upset with President Trump, they're upset with President Biden, electric vehicles are coming.

So the question is, how long will this industry that uses half of our corn crop exist in the current form?

Yepsen: What is your answer to that question?

How do they reinvent themselves?

Beeman: Well, they could reinvent the plants to make other types of alcohol long-term.

But I think in the short-term, the short-term could be 5 or 10 years, they will continue to produce ethanol and they will try to keep their markets.

Henderson: The other thing they can do is use corn fiber to make products that are now being made out of petroleum like material and plastic, try to move into that space.

Yepsen: This strikes me as a real emerging policy issue for Iowa with the moving to electric cars.

Erin, is there a future for ethanol?

Murphy: Yeah, I think that is kind of the big picture view here that the industry needs to have and I'm sure recognizes is this doesn't have a future 20, 30, 40 years, whatever it is down the road and that is why these other things are avenues that they need to be pursuing.

Yepsen: We're out of time.

Thanks all of you.

And welcome to the show, Perry.

We'll be back in two weeks for another edition of Iowa Press.

We'll be off next week while the Iowa PBS Sports crew brings you live coverage of the Iowa High School Girls State Softball Championships.

So for all of us here at Iowa PBS, I'm David Yepsen.

Thanks for joining us 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.

Iowa PBS is supported in part by Wells Fargo.

Fuel Iowa is a voice and a resource for Iowa's fuel industry.

Our members offer a diverse range of products including fuel, grocery and convenience items.

They help keep Iowans on the move in rural and urban communities.

Together we Fuel Iowa.

Small businesses are the backbone of Iowa's communities and they are backed by Iowa banks.

With advice, loans and financial services, banks across Iowa are committed to showing small businesses the way to a stronger tomorrow.

Learn more at IowaBankers.com.