Iowa Press; 1528; Gov. Terry Branstad

This is I want for a show fifteen point twenty eight with Governor Branstad recorded April 22nd eighty eight. Major funding for this program was provided by friends of Iowa Public Television. He's faced a state with an ailing farm economy and a continued migration of residents. Yet he is optimistic about how it was future. 1988 is a pivotal year for Iowa. It is a year when we can make our strengths work for us or let future trends control our destiny. Tonight on I will press a talk with Governor

Terry Branstad. This is the Sunday April 24th edition of Iowa press. Here is Dean board. Good evening. U.S. News and World Report magazine projects that between now and the year 2000 the largest job decline across the nation will be in agriculture with a loss of three. Three hundred thirty two thousand farmers and one hundred ninety thousand farm workers farm foreclosures in Iowa coupled with reports of declining population in the state have prompted Governor Terry Branstad to push for economic diversity. He's made several trips out of the state to recruit business and industry to the state. And just this week returned from hosting a $35000 gala in California in an effort to lure the movie industry to Iowa. The effectiveness of such recruiting is just one of the topics that will discuss tonight with our guest Governor Terry Branstad to be questioned by David Epstein with the Des Moines Register. And by Mike Glover with the Associated Press.

Governor at the end of life legislation there were thought of a deal struck the Democrats cutting welfare spending they wanted and you got an economic development programs that you wanted some extra states but in economic development. What are we going to see that actual statement. Well the encouraging thing about this session is that it all came together and we got an honestly balanced budget that doesn't push obligations in the next year and this year is that we will not have a sales or income tax in 1909. So I'm very encouraged about that. I'm also encouraged about the transportation initiative that was approved during the session and the new money for marketing. I have an overall economic development strategy says. Invest in our strengths. Last year we made a major investment in education. We're continuing to build on that. The transportation initiative this year the improvements in the business climate. And then when you add to that to the other two parts of our program which are strategic targeted investments in areas like biotechnology adding value to agriculture and insurance as well as recreation and tourism. Even the movie industry is as an example of adding more diversity the ISL economy and finally an overall marketing and promoting of

Iowa. But it is not selling ourselves short but saying how proud we are about the work ethic and what we have to offer and at this point are you able to say for this spending this is what we can anticipate getting. Can we get this business this insurance company this movie. Anything specific. Well this is an example we started three years ago to market Iowa to the television motion picture industry and a lot of people ridiculed and said that's ridiculous nobody will come to Iowa this year we have three movies being made in Iowa. The amount of money being spent is over six million dollars and that's gone up geometrically each of the last couple of years. And it's not just that we host an event in southern California it's that we work on it on a day to day basis we have a film Girl as part of the Department of Economic Development. Wendell Jarvis works on it. He has me make strategic calls at the right time. Other communities America Cedar Rapids was out there where this Dubuque has been making a major effort. And we're seeing it pay off in big ways in creating new jobs in the state of Iowa. That's just a small part of it. What we're doing in insurance. Agriculture adding value to agricultural products and biotechnology is one of the growth

areas of the future and Bob Noyce told me on another trip to California six weeks ago that he thinks will be more growth in biotechnology than any other field in the next decade and we have the logical place for that to happen because we we raise surpluses of corn and soybeans. We have that solid basic education the good work ethic and we're making major investments in lasers and biotech research and I will state University of Iowa governor on the show recently your director of Management and Budget said that while the state has a legally balanced budget that there is still a deficit of 40 to 50 million dollars. If you use generally accepted accounting principles to calculate it how soon you mentioned the budget in response to Mike's question How soon do you think it will be before I will have a truly balanced budget according to generally accepted accounting principles. In 1986 when we passed a major reorganization in downsizing state government we also made the commitment by 1991 to be on the Gap's system of accounting.

And this year we made additional progress and that with the imposition of the sales and use tax on the out-of-state catalog companies and that money is going into a special fund it will not be spent. It will be used to help the state achieve that gap. Target by the year 1991 so we're on target so far we've been moving forward on that reducing that gap deficit every year. And by 1991 it will be totally wiped out we will have will be one of the few states to have a totally Generally Accepted Accounting Principles a system in place. He also mentioned the possibility of a tax cut saying the economy is doing so well and revenues are up. I once saw that the end of the session fifty one million dollars and unexpected revenue you've mentioned here tonight the the notion that you don't think they'll have to be any sales or income tax increases next year. What about a tax cut next year.

Well I think it's premature to say whether that's going to be possible but I think we can confidently say there will not be a sales tax increase. There will not be an income tax increase if the economy continues to improve. I think we should further reduce the income tax rates. Last year we reduced rates substantially and the top rate was reduced by over 25 percent. And it's helping. I think we should continue to move in that direction in the future as the economy improves. But you're not predicting that that's going to happen in the next session. It's premature to make that kind of prediction. With the budget agreement that was worked out in this session we have a balanced budget. But it's balanced with very little room to spare so the economy would have to grow substantially above our present expectations for that to occur. Now it's true in the last year and a half the economy has exceeded our expectations. I will lead the nation last quarter in improved income individual income to our citizens and we're excited about that but it's too early to predict that we're going to continue to have that kind of growth into the future especially if you're depending on federal farm subsidies which

is a good share of what I would got in a better for me or better economy overall this time. Yes. Also livestock prices played a key part in that. We had exceedingly good livestock prices. That's dropped off for hog somewhat and we are the leading pork producing state cattle prices are still very good. But we are looking to the future in agriculture we're hosting a World Food conference here in June because we recognize that we're we're competing in a world economy and we can't solely depend on the United States government and its agriculture policies we've got to to work with other parts of the world and and I'm excited about Iowa hosting a World Food conference and we're going to have Lord plum here from from the Common Market. We're going to have a lot of important decision makers in the world that are going to affect our agriculture. But we're still in the area of economic development and the need to diversify. Thinker John Crystal said recently that with the spending that Iowa has in trying to lure industry here

it says if we're trying to buy jobs. And do we really get the return for what we have invested or are we getting that return what do you what do you think about that. Buying jobs. Well I think that's a that's a term that shouldn't be used because what we have in Iowa is an overall economic development strategy that says we invest in our strengths. Ninety two and a half million dollar investment in educational excellence last year transportation program this year that's going to tie all parts of I would together reducing the burdens on taxes and tax burdens on business and industry active an aggressive marketing program. And we do have some targeted a programs to help the insurance industry to encourage biotechnology and some of the lottery dollars are used to assist in those targeted programs but we have an overall economic development strategy that says build on our strengths. A woman named witnesses one of the big barriers was the sales and use tax and equipment in 85 we got rid of that. One of the problems has been high unemployment taxes where we reduce that 35 million this

year next year it's going to go down another 30 to 60 million. We're continuing to work to chip away at the impediments and barriers to growth and to encourage him those things like education and transportation that will help economic development. Is there really anything else left to do. I mean are you what what other impediments are there that the state has placed. OK well fortunately we've made significant progress but we're far from being where we want to be and also we're dealing in a very competitive environment while other states are doing what they can as well. As an example what can we do in the future. One of the great benefits that we've had in Iowa is where the leading agricultural state we were the number one corn producer. We have a surplus of corn. Ten years ago we started promoting ethanol as a fuel. We've been a nationally recognized leader in ethanol promotion. I believe the next step ought to be for us to become a nationally recognized leader in biodegradable plastics. We have the corn. We've got to tremendous

research capabilities that I would state and we can become the leader in the use of biodegradable plastics. And so right now I'm putting together a working group with the corn growers and with Iowa State to invest in biodegradable plastics and that's a whole new generation of products that can come from corn reducing problems with pollution of our environment. We you know the problems we're having with the with the landfills not just in Iowa but that's true throughout the country. And I think we can be a pioneer in a nationally recognized leader in developing new products from agriculture like biodegradable plastics governor to what extent should other sectors of Iowa's economy and other institutions and I was society get with the program. I mean I have watched you for a number of years now trying ideas and to to get the economy going again despite the fact you never could or the state never really caused Iowa's economic problems you've been confronted with with people demanding that you do something. But we are only but it is about right. But I mean to what extent

should other people start doing some things bankers who don't loan money in their own communities education institutions like Regents institutions and have you been critical of for not doing enough in areas of economic development while they're getting with the program they are doing right now again thank you isn't with the program. What should be done to get other people with the program. Can we still look to you all the time. Well first of all I'm the leader. I have the responsibility to set the agenda and move the state forward and I and I think a lot of people are getting with the program the reagents definitely are making a major pitch in economic development even in California the regions we're out there showcasing the writer's workshop in the communications programs that we have so it's not just in the fields of science and technology which obviously are important but are the areas of lasers and biotechnology important but also in the culture around the arts those quality of life factors can be very important in economic development and they'll be part of our overall marketing program for Iowa our local communities doing enough to help themselves. Many communities are doing very

exciting things and some communities want to do things but don't know what to do. We're holding a series of meetings called shaping tomorrow's economic progress. I think we've had 14 of them across the state so far where we've called to gather community leaders local elected to anybody in the city or the community or go and fact we've done a whole county meetings in Sac County in Decatur County. The turnout is phenomenal. People want to do what they can. They're interested in learning the Independent Colleges have come forward with the plan which the state is helping finance to train local leaders in economic development. And my message to people is don't just expect the mayor and the Chamber of Commerce to do it. Every citizen has a responsibility to be positive about their community and to be willing to to be part of promoting it and singing about the good quality of life we have an eye with a good education system the work ethic and that can be an important part of attracting growth to that community. Some of it from within. Some of it from outside. I encourage communities to look at everybody that graduated from their high school it might be successful some other part of the country

and encourage them to come back and make an investment. Recently that happened Carol Narcan Home Shield gentleman from Kerala decided to use an expanding insurance company would put a facility in Carroll to serve the Midwestern and East Coast market. Governor if we go back to the border region for a second Martin Parr as your point of the border region sort of symbolizes your determination to make the regions become more involved in economic development. He was just re-elected as chair with border regions but he was criticized by one member for being too involved in partisan politics Republican politics. To be more specific. Are you satisfied that your Board of Regents is staying out of partisan politics that it should. First of all I don't believe that people go on the board of regents have to give up their rights as citizens to contribute and participate in the political process and there are both Democrats and Republicans on that board. They contribute to candidates and to their parties and Marvin POMERANZ incidentally contributes a lot more to education and to programs and supporting education and charitable endeavors like

Variety Club than he does to politics. He's a very caring person. I don't know of anybody that cares more deeply about the quality of education than Marvin POMERANZ. He's been a leader and he's a guy that points his money where his mouth is. He's given a lot of money to education. He's made a lot of contributions to charitable organizations and yes he stands up for his political views as well and I'm proud of him for that and I don't see any reason why he or any other member of that board of regents should have to quit participating in the in the political process just because they're in an important position. But just from a tactical point of view are you satisfied that you can go to the legislature now after running a path trying to hear the words of one of them there was a reason to eliminate legislators and I don't think that is what they're missing. That is a. Unfair distortion of what really happened. Marvin POMERANZ contributes to a lot of good in charitable causes and he happens to support Republican candidates. They're also members of that board of regents who support Democrats. But then it's beyond the point the point is he's the chairman of the board. He cares deeply about education. He's a

real aggressive and positive leader for the border regions. They were successful in getting more funding under his leadership the last two years the first time I think in history where we've had two years in a row where faculty salaries are going to be increased by double digits under his leadership. More money has been obtained for research in biotechnology and an end. Have you gotten everything you want from the Board of Regents you say you want to nobody ever gets everything they want. But you say you want them involved in economic development you got a lot of criticism for naming him to that board. Have they done everything they ought to do. I think they're doing exciting things and I'm very proud of what the board is accomplishing as an example. I was State University and the University of Iowa we have both established research parks. We've got incubators we've got Small Business Development Centers at the universities. We've got exciting new research going on in fields like biodegradable plastic spirit I was State University and I was involved in in human biology we have the largest teaching hospital in North America there.

Those are tremendous assets that can help this state to grow and diversify and it's not just the college communities but the whole state can take advantage of the research that's taking place there. How are they coming in cutting out the duplications. You recently reorganized much of the executive branch of state government. You're taking steps to prompt or force local school districts to become more efficient some cases reorganize. What's being done about three state universities duplications of programs at those universities. Here again I think Martin Pomerantz in the border regions deserves a lot of credit for establishing this organizational audit of the entire region system. It's a very comprehensive audit. It's the most significant look at their operations ever been done and we have assured the Board of Regents that the savings will be reinvested in those universities they will not lose that money. It will be reinvested to strengthen those universities and build centers of excellence and the universities are fully cooperating and working on that organizational audit. It's going on right now and we expect good things to happen as a result of it.

Governor it was mentioned earlier in the show about banker John Crystal banker John crystal also happens to be someone who said he might like to have your job in 1990. Would you like to share your plans with us. Well first of all I think it's totally premature to people start talking about 1990 politics we have a presidential election going on in this country. I think people are tired of long campaigns and I'll be glad to talk to you about my ambitions or what I might do in 1990. Why is that discussion going on. I mean do they see you as a weak governor. I don't understand why they are doing and I think they're making a strategic mistake in starting a political campaign when advance I don't think people want long campaigns. I was reelected governor during the worst farm crisis in the state's history. I'm committed to strengthening and diversifying this economy. I want to keep my focus on what's important for Iowa and and you know I know how to win political campaigns I've proven that time and time again. But I'll make that decision in 1990 in the meantime I want to do the job I was elected to do and that is to strengthen and diversify I was a colony governor.

Go back to economy for a second. The Census Bureau reports are coming out you've been critical of the one that shows Iowa's population declining by the year 2000 there's a new one out now that that indicates that that the rich counties and the poor counties are those I want to get and what a reaction to that. Oh my goodness. Here we go. And your newspaper has printed I don't know how many articles talking about one have been allowed between 1983 in 1985 but the Department of Commerce figures that came out was in USA Today owned by the same company as the Register showed Iowa had one of the fastest grows in individual income. Last year the whole nation highest in the Midwest. I think third or fourth highest in the country and for the fourth quarter we had the highest growth of any state in the entire nation. That is up to date information. That's what's really happening. That's our economic development and diversification program is working. And you can look at the past as long as you want to but the future is what's important in this state and we have an economic development plan that is working and we're going to aggressively move forward despite the naysayers and those that kind of want to

work and look backwards. The Census Bureau is wrong. They put a ruler to what happened during the farm crisis in the period 1983 85. They also predicted the Texas economy would be booming. Look at the facts. Texas is in the depths of the Depression. The state of Iowa is coming back. There the people are going to be embarrassed. The people that have put out those kind of misinformation. The Census Bureau is wrong. They were wrong in 81 they predicted growth on the on the verge of the beginning of the farm crisis. The problem is they're using information that's two years old. You need to be up to date with what's really happening here today you know you need to continue. We need to use that though we may use that that information to continue to spur people on to diversify and strengthen the state's economy so we need to use that in a positive way to help Iowa to grow and diversify if the information is wrong you can beat up on reporters for reporting stories but are you doing anything to correct the Census Bureau's methodology is are there any steps being taken to through the

Reagan administration through the Congress to say to the Census Bureau change your forecasting that. Yes absolutely. I have I've had a call in to Mr. Verity and he's been in the Soviet Union and he hasn't gotten back to me yet but I intend to tell him what I think about his methodology. It is wrong. It is Secretary of Commerce. Right and the Census Bureau is under the secretary of commerce and that's why I called Mr. Verity and indicated how wrong I think they are and I think they need to update their information and clarify the the mis perceptions that have occurred now. They'll tell you these are not predictions but reporters and the public take them as predictions they're based on statistical information. That's two years old the economy in the world has changed dramatically as the dollar has gone down as the farm economy has improved as our economic development program and I was coming in and helped to strengthen and create new jobs. The whole situation has changed dramatically and we intend to take that issue up with the Mr. very important commerce and I think the Census Bureau ought to update their information

and correct the misinformation that they have put out that's been repeated consistently by so many people. Governor as the oil we kind of improves it a couple of weeks ago we had on this program people who were talking about the budget and how Iowa probably is hooked for good on the lottery because we've become so accustomed to that money. You at first didn't like the lottery. You came around and did sign the bill and supported it later on. You know or you think they are we hooked on the lottery in Iowa and are we going to expand gambling in Iowa even as as you predict the economy is going to improve in Iowa. Well there is no question that a lot of people love to play the lottery and they're interested in other types of gambling investing. I'm not one of them. I'm not a gambler personally. I guess you could say I'm a gambler in the sense that I I invest in Agriculture and farm land but I've had but I'm not a gambler terms of the lottery. But as long as it has strong public support I think it's going to continue. I think the most important thing from the state's perspective is that

it's honest and that we can we can assure people that the money is going to go for economic development and help strengthen and diversify the economy I agree disappointed on that basis. I put Ed Stanek in charge I think he's done an excellent job. The first person who tried to cheat was successfully prosecuted and penalize. And I think we've got an honest and well-run state law so is here for good. But what I want to do and nothing is for certain or for good I said it's going to be here as long as it continues to have the broad base public support that it presently enjoy. Do you support expansion of gambling. Well it depends upon whether we can have adequate controls to protect the state. We've been successful. We have three very good dog tracks that have been profitable and help the communities where they're located and in Dubuque and Waterloo in Council Bluffs. There's going to be a horse track in Altoona. We want those to be successful. Other proposals have been you know suggested such as riverboat gambling. I've indicated an open mind provided get

that adequate controls and protections are build in to protect the integrity of the state and to make sure that organized crime and other on is are desirable elements are not able to get involved. Mike governor during the closing days of the legislature they sent you a bill to hold on medical malpractise limiting what doctors can be required to pay them sitting at the state pool. Critics have called that a sick tax because part of the funding comes from a tax on hospital admissions and doctor's fees. The rumblings around the state house now are that you're going to veto that bill. What no decision has been made are happy with it. I'm not happy with it because I called for a bill similar to what's in place with the present law Nebraska that puts caps or limits on liability. This bill as I understand it has no limits. In fact it says the state if it first of all it says the patients will have to pick it up as you pointed out to increase a surtax on on their hospital bills in addition to that it says that if that is inadequate then it will fall on the taxpayers. I've asked the insurance commissioner to

do a very thorough review of this legislation and the experience of other states and to advise me on it. I also intend to seek advice from others and to carefully review what this would mean and whether this is a step in the right direction or if it's a step in the wrong direction before I make a final decision Republicans are saying they'd like to see a veto if they think you can see to it that will kind of heighten it this fall as a campaign issue. I think the will the decision will be made on the merits of whether I think this is a step forward or a step backward to protecting the health and the safety of the citizens of Iowa as well as the taxpayers and the the patients. That's I think the real issue and I don't think it should be looked at in political terms I think it ought to be looked at in terms of what it does in terms of public policy to help the state of Iowa we're whether we're there causes more harm than good. Governor we've got just a couple minutes left. Give me your assessment of the Michael Dukakis George Bush race in Iowa. Both are unknown both are from New England hard times in the Farm Belt. How will this race go.

Well you've got two long distance runners who came in third in the Iowa caucuses but are still in the race and and I think that they're both formidable. They're both experienced people. I happen to think George Bush has the breadth and depth of experience especially in foreign policy and having that kind of benefit of background and experience in foreign policy as well as being a good listener. You know he came here in the midst of the farm crisis for my birthday in 1985 and we organized a meeting with all the whole spectrum of farm organizations. And I think he listened very well. And and. He's he's a I think a very knowledgeable man he's also indicated that his top priority as president will be education. That certainly is in tune with the top priority of Iowans. He's a strong supporter of ethanol as a fuel. He's a strong advocate for rural development. And the caucus has been a successful governor in a state that has benefited by Reagan's major investments in defense and defense is now going to

see less money being invested I think you'll see that the Midwest economy is probably going to grow more than the coasts. And as a result I don't think Massachusetts is going to do as well. And I think they've benefited like other New England states from what Reagan did. Real quickly what does Bush have to do to carry the Midwest. He's in trouble here. He's got to work hard. And he's I think he needs to come to the Midwest and spell out his policies in education and rural development. And I think if people get to know him better and what he stands for individually that he's going to do OK it's going to be tough geographically where she looked for a vice president. Well I'd like to see him look to the midwest but I also know California is important and so is the South and so it's going to be a difficult choice. My difficult choice right now is the hip product so I said OK thank you very much for being on our program tonight Governor Branstad until next week for a panelist tonight David Epstein and Mike Glover. I'm David Borg thank you for joining us. Stay tuned now for Morgan held with

take one. Good night. Major funding for Iowa press was provided by friends of Iowa Public Television.