Republicans say no economic development fund without easing rules

Tuesday, April 22, 2003

Negotiations between legislative leaders and Gov. Tom Vilsack intensified Monday over a bill easing state regulation of businesses that has become the focal point of the session.

Republican leaders have said Vilsack must agree to the bill before they approve the governor's priorities: his proposed economic development fund and tax reform.

Democrats repeatedly have rejected the rule changes, which they say hurt working families. Vilsack said last Tuesday that he would veto the bill unless it's amended to eliminate many of the measures harmful to workers.

The bill would make it more difficult for workers who are laid off to get jobless benefits and tougher for injured workers to get compensation.

House Speaker Christopher Rants, R-Sioux City, said he believes agreement can be reached with Vilsack on many of the issues, including changes in the way lawsuits against companies are filed and limits on jury awards for pain and suffering.

"The question for a lot of folks is how much is enough," Rants said. "I believe if we can find common ground on those items I outlined, it does make a significant improvement in Iowa's business climate and we could then proceed forward."

Iverson released a letter signed by nearly 60 businesses and groups calling themselves the Iowa Growth Coalition. The letter says changes in tax laws and business regulation and approval of the economic development fund should all be accomplished together.

"All of these efforts should be done in conjunction with a thorough and sustained effort to review the structure and size of government," the letter said.

Republican leaders say if they get the regulatory changes, the governor would get his economic development fund and tax changes, all before the legislature adjourns in two weeks.

"Now the question is can we get to the point where we have enough agreement with the governor that we can move ahead with those three things," said Senate President Mary Kramer. "That's kind of the test for the week. We'll have to wait and see."

Legislative leaders also appeared to have agreed on a funding source. They propose borrowing against $60 million in gambling tax revenues. The money, already budgeted in the state's general fund, can be used as collateral for bonding.

By 2006, money collected from a new tax in Internet sales would replace the gambling money to back the borrowed bonds. By then, state officials have estimated the new Internet taxes will be bringing in more than $100 million to the state.

A bill establishing an $890 million economic development fund is expected to win committee approval this week and be ready for debate, said House Majority Leader Chuck Gipp.

Many leaders believe the success of the session will be judged by whether the three issues are accomplished.

"Iowans want to make sure that this session is a successful one and that something positive comes out of it to move our economy forward and I think we have a great opportunity to do that," Rants said.

"A lot of work needs to be done, make no mistake about it, but if we can reach those agreements there's no reason why we can't adjourn on time on May 2."

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