Iowa Condition of the State Address 2002

Following is the full text of Gov. Thomas J. Vilsack's annual Condition of the State Address, delivered January 15 to a joint session of the Iowa General Assembly.

Thank you, Madame President. Thank you, Mr. Speaker, members of the General Assembly and our Supreme Court, and distinguished guests and ladies and gentlemen.

We are assembled on this crisp winter morning in our great state just 126 days after terrorists attacked our country, our freedom, and our way of life. Today, we start together another legislative session - a reaffirmation of our democratic process and a celebration of the blessings of our liberty. In September of 1787, our founding fathers signed a document that began with these words: "We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."

With this simple phrase, to "secure the Blessings of Liberty," they assured that all the generations of Americans to follow would have certain inalienable rights. They believed that no matter what circumstances the nation and its people would face, these "Blessings of Liberty" would stand tall and remain strong. Last September 11th, terrorists filled with hatred believed they could destroy the blessings of our liberty. But though their heinous acts shook us, they could not break our spirit. Indeed, those terrorists have made us again one nation under God, stronger and more determined. The terrorists tried to destroy the blessings of our liberties. Instead, they re-ignited our sense of unity and purpose...powerful weapons we can wield in protecting our values and our way of life. Nowhere is that spirit-the spirit of unity and community-stronger than in Iowa. And never have I been prouder to call myself an Iowan. Citizens across this great state have demonstrated heartfelt generosity and extraordinary sacrifice in the aftermath of the attacks.

Iowans are well represented among those making sacrifices for Operation Enduring Freedom. This morning, I am honored to introduce to you Brandi Aspengren from Boone. Her husband, Sgt. Tony Aspengren, is one of the more than 300 Iowa National Guard members called to federal active duty by President Bush. With Company D, 109th Aviation Company, Sgt. Aspengren has been deployed to join the war against terrorism. Brandi is here with her two daughters, Grier, who is 4, and Greta, just seven months old. Sgt. Aspengren's entire family is proud of him and his service to our country. We are all proud of him, and of all the Iowans serving in Operation Enduring Freedom-and we are proud of their families who sacrifice here at home.

I also want to introduce you to Peggy Peterson, a wife, a mother of 3 young children, and a veteran of the Persian Gulf War. She works for the Occupational Safety and Health Administration (OSHA), and is a state employee. Peggy went to Ground Zero on November 24, and helped train rescue workers to properly use their personal protective equipment. "I wanted to do my part," Peggy says. "I'll never forget the experience. The helplessness and vulnerability we all felt as we entered or left the site-it's an innocence that's been ripped away from America." Peggy and Brandi, will you please stand? Please join me in saluting these folks and the thousands of other Iowa heroes, now and in the past, who have sacrificed and continue to sacrifice so much to protect the blessings of our liberty.

The events of September 11th caused all Americans to reassess our own safety and security. Here in Iowa, we responded immediately by sending members of our National Guard to protect our airports and research labs. And we have undertaken a longer-term response, as well, by surveying our state's critical assets so we can provide the security Iowans require. There is nothing more important than protecting the security of our families and our future - making sure that every Iowan has an opportunity to enjoy the blessings of liberty promised in our Constitution. But those blessings of liberty can be threatened by more than acts of violence; they can be destroyed by ignorance, illness, and the inability to earn a decent living. Providing hope-protecting family security, building a brighter future for Iowa's families-was a mission we embarked on well before September 11th. And with the help and cooperation of the legislature, we have made important progress.

More than at any time in history, a world-class education is essential to both the economic security of individual Iowans and the future economy of our state. For the past three years, we have worked very hard to make education Iowa's number one priority. For the first time, the State of Iowa has partnered with local school districts, to invest in modernization, new construction, and other critical needs so that schools are up to date and a safe place for kids to learn. We have invested in recruiting and retaining quality teachers. We worked to pass an important program to boost teacher pay in Iowa, while providing training and mentoring to support our teachers. We have invested in the smaller classes that are essential to ensure that children get the attention they need to learn and excel. We are committed to reducing class sizes. And as a result of that commitment, we have begun to see results. Last year, after 10 years of decline, Iowa's elementary students' reading comprehension test scores showed improvement. Those same students were among the nation's leaders in progress in math and science. These numbers, though just a beginning, reflect the wisdom of our investment, and point to a brighter future for our children and our state. I want to congratulate the schoolchildren of Iowa, and their parents and teachers, for this heartening improvement in performance. And I want to thank the members of this legislature for making support for smaller class sizes a priority in Iowa. Your actions have made a difference for our children - and for our state.

Yet, we know that children cannot learn or reach their full potential when their health is threatened. Access to quality, affordable health care ought to be the right of every Iowa child. The HAWK-I, or Healthy and Well Kids in Iowa, program ensures that children of working families who are struggling to make ends meet have health coverage. Over the past three years, we have expanded HAWK-I and other healthcare coverage for children. As a result, more than 30,000 previously uninsured Iowa children have access to quality health care today. That is far more than a mere statistic. Through insurance from standard Medicaid, expanded Medicaid, and HAWK-I, 30,000 individual children in Iowa today have a brighter future and better chance to fulfill their God-given potential. It means thousands of parents across our state are free from the terrible fear that they may not be able to help when their children are suffering - or that one illness or accident will mean financial ruin for their family. Expanding HAWK-I to those children has been a signal achievement of the past three years. Again, I congratulate the members of the state legislature for making this important investment in Iowa's future.

We are also wholly committed to ensuring that every Iowa senior is secure in the knowledge that he or she can live in good health and dignity. Those Iowans lived through the Great Depression, won a World War, and built the United States into the great country it is today. They should not have to choose between buying the prescription drugs they need and eating -- or heating their homes. That is why Senator Harkin and I started the "Iowa Priority Prescription Savings Program," which will help make prescription drugs more affordable and provide greater health security for seniors. Already, 15,000 Iowa seniors have signed up, in hopes of cutting their punishing prescription costs. But even as we get this program up and running, we must continue to add to its roster every Iowa senior who is eligible and interested in participating.

Independence and dignity are also the ideals behind the Senior Living Trust that we established together two years ago. The Senior Living Trust provides more comprehensive long term care to Iowa seniors and people with disabilities. Some funds in this trust have been used to expand assisted living opportunities, develop home-delivered meal programs, adult day centers and respite care sites, and create greater access to needed care. Today, nearly 12,000 Iowa seniors get the help they need while maintaining their independence. We will continue working to provide this option to more seniors and their families so that, eventually, every Iowan can live independently as long as they are able. This will not only save tax dollars; it will lift spirits and improve lives.

While we ensure the dignity and independence of those whose hard work built today's Iowa, we must ensure opportunity for those who will build tomorrow's Iowa. For the sake of Iowa's future, we must continue to promote good paying jobs and business opportunities for Iowans. I am proud of the work we have done together to build quality job opportunities in Iowa. When I came into office three years ago, businesses that received state grants to create new, high-skilled jobs paid their employees an average wage of $13.53 an hour. Today, the businesses awarded these state grants pay their employees an average wage of more than $18 an hour. Last year, 33 projects were funded with state grants, helping to create nearly 3,000 new, good-paying jobs for Iowa workers. Today in Iowa, there are 7,000 more Iowans working-in the depth of a recession-than there were in January, 1999-at the height of prosperity.

More is on the way: With the passage of landmark electric generation legislation, utilities are poised to invest $3 billion in new construction and generation capacity, helping to create hundreds more quality jobs.

This is real progress. Lasting progress. Rather than squandering the rare opportunity good times afforded us, we made investments that will yield dividends to our state for years to come. And we did it while delivering an unprecedented $800 million in annual tax relief to Iowa citizens and businesses- and holding general fund growth to little more than two-percent a year. And that two percent-a-year represents the lowest rate of growth in spending by Iowa state government in thirty years. That's why the Wall Street credit agencies recently awarded Iowa another superior financial rating, which means we continue to enjoy lower borrowing costs than most other states. That's why Governing Magazine gave Iowa an A-minus grade for our fiscal stewardship - the second highest ranking out of all the states. I take great pride in that grade, and so should you. Our standing as a fiscal leader among the states reflects a fundamental Iowa value.

Today, we face a new challenge - the challenge of governing in hard times, when our dilemma is not how to apportion great bounty, but how to manage scarce resources. The national economic winds that propelled us to great heights for much of the last decade have shifted. Across America, at least forty-four states are currently facing sudden, deep, and unpredicted drops in revenues. In neighboring Illinois, the state budget faces a $500 million shortfall. Wisconsin faces a deficit of $300 million, with estimates climbing to $1.3 billion by the year 2004. Lawmakers in Missouri have already cut $600 million in their budget, and may have to cut another $500 million in fiscal Year 2003. The governor of South Dakota has recommended that his state use nearly $12 million in reserve funds this year, and another $36 million next year. And our neighbor to the north, Minnesota, is short $2 billion. A decade ago, two decades ago, when faced with similar challenges, past Iowa governors and legislatures responded by raising taxes. We did not. Instead, we cut taxes. We reorganized. We sacrificed - and we asked for sacrifice.

The prudent action that we took together in last November's special session pared $186 million from the budget and stabilized our state's fiscal condition. We have also undertaken important reforms in how Iowa government does business, to increase efficiency and better serve families and communities across our state. Improvements in the Department of Transportation and Department of Natural Resources will push decision-making closer to people and communities - reducing management and putting workers in the places they are most needed. And our reform of the Department of Human Services will eliminate layers of bureaucracy while preserving nearly all of the front-line workers dealing directly with those Iowans who need their services and support. These improvements were begun so that Iowans receive the best service at the best possible price. Now that our resources are stretched, these changes are even more essential. I want to thank the business and community leaders who have worked with us on the "Improving Government Initiative." With us today are: Dwayne McAninch, Chairman and CEO of McAninch Corporation, and Joe Pierce, president of Mid-America Group. They worked with Dave Vellinga, President and CEO of Mercy Hospital; Dr. Willard Boyd, Former president of the University of Iowa; Barbara Lukavsky, owner of Merle Norman Cosmetics; and Martha Willits, president of United Way of Central Iowa. They were joined in their efforts by state department directors. Dwayne and Joe, will you please stand? Please join me in thanking all of these folks for their efforts to improve state government.

I also want to extend a special thank you to Iowa's state employees, who serve the people of our state with dedication and distinction. Not only are they Participating and cooperating in implementing these needed changes in the way state government does business, but they even voted to postpone a scheduled pay raise to help us through this challenging time. That unprecedented show of support and selflessness should earn every Iowan's gratitude and respect. Thanks to the difficult but necessary decisions we made in response to the economic downturn, Iowa has fared better than many of our neighbors. But the revenue picture for next year is no brighter, and we will be called upon in the coming months to make decisions even more challenging than the ones we faced last fall.

Our challenge this year is to do more with less, while protecting the progress we have made. Even within the constraints of a recession-year budget, I believe we can and we will meet the challenges. Before I outline what we must do, let me tell you what we cannot-and what we will not-do. We cannot forget our commitment to make education Iowa priority number one-starting with our effort to reduce class sizes and support our teachers. To do so would break faith with our children and our future. We cannot reverse our determination to provide quality health care to the children of working Iowans who have no health insurance. We cannot retreat from our pledge to assist senior citizens in the state of Iowa, by helping them afford the prescription drugs they need and providing alternatives to nursing homes for those who want to preserve their independence and dignity. And we cannot back off our efforts to provide better economic opportunity for all Iowans. The actions we have taken these past three years have made Iowa a better, stronger, and fairer place. To abandon those commitments now will compromise our efforts to provide hope, protect family security, and ensure a brighter future. This is too high a price to pay.

To continue making education priority number one in Iowa, we must maintain levels of support for our class size reduction and teacher support programs, we must add additional state support for our kindergarten through 12 system and our community colleges, and we must add to the private college tuition grant programs, and at the same time, fully fund regent salaries and bring back the work study programs. This will not be easy, but it is necessary. A recent debate has centered on the state's reserve account, commonly referred to as the surplus or Rainy Day Fund-both in terms of when and for what purpose we should use the fund. After listening to Iowans in all 99 counties, I know what most of them think it should be used for-to protect the priorities of Iowa families during challenging times-starting with education. First, let me be clear: The budget I submit to you will be balanced. At the end of the year our surplus will exceed $400 million-or close to 8% of our general fund budget. This exceeds the national average for states. I do not propose that at the end of the year we reduce the fund from its present level, but when we are faced with a steep national recession that threatens our ability to fund our children's education, I see no reason to significantly add to the fund at the expense of our children.

Today, I propose this year we dedicate an amount equal to the year's deposit contributed to the surplus account to help keep education Iowa priority number one. This fund would help pay for the additional support required at all levels to preserve our progress in providing a world-class education for all of our children. If we fail to do so, children in Iowa today will forever lose an opportunity they will be unable to reclaim when prosperity returns.

A better future for Iowa also depends on our commitment to early childhood learning and literacy. Research shows that children begin learning at birth. We need to do an even better job than we have in early childhood learning and literacy. We need to build upon the progress made to empower parents, teachers, and childcare providers. I am proud that our First Lady already is leading this fight for early literacy in Iowa. Christie and her "Iowa Stories" communities and sponsors have raised enough money to provide every child of kindergarten age in Iowa with a special gift this Spring-a book of their very own. "I is for Iowa," written by an Iowan about Iowa, is an alphabet book that will not only reinforce early learning but will also teach youngsters about their state. Accompanying the book will be a map prepared by the Department of Cultural Affairs for parents so they can plan long weekends or summer vacation trips in Iowa to the places highlighted in the book. Christie deserves our thanks for her volunteer efforts on behalf of literacy in our state.

Early childhood efforts require better coordination and advocacy within state government. For that reason, I will be signing an executive order establishing a "Children's Cabinet" to better coordinate and advocate on behalf of our youngest children. But these private efforts and advocacy need matching support from the state, to insure that our young people start school ready to learn and excel. It's an investment that will pay off many times in the future-and one that will greatly enhance the impact of all our investments in K through 12 and beyond. To that end, I propose the establishment of a permanent endowment for early childhood education. Any funds remaining after fully funding the Rainy Day Fund over the next five years will be transferred into the endowment when the books are closed, where it will be invested. Income will be appropriated annually by the legislature to promote early childhood learning and literacy. All of these steps will build on the progress that has been made on our number one priority. Although we have made great progress in expanding access to quality healthcare, we must remember that there is another group of Iowans that we cannot afford to leave behind - those affected by mental illness. Mental illness directly affects one out of every four Iowa families. It is a disease that can tear families apart, damage the bonds of friendship and cause Iowa businesses lost time, and with it, productivity and profit. Mental illness is a disease. It can be treated. It should be fully covered by health insurance policies -- the same as any other disease. The sad truth is that many mentally ill people do not get help simply because their health insurance doesn't cover their illness. Without adequate coverage, they cannot afford the care they need. These people need insurance parity.

Many studies have shown that the benefits of parity far outweigh the costs. Mental health and substance abuse parity will provide more Iowans with the healthcare they need to live healthy and productive lives. I want to thank Lt. Governor Sally Pederson for leading the fight for parity in Iowa. Her lifelong advocacy has done much to secure the blessings of liberty for our children, for people with special needs, and other vulnerable Iowans. She is working now in partnership with counties, providers, adults with disabilities, and families to create a consumer-driven system of services for Iowans with mental illness, mental retardation, and developmental disabilities. With Lt. Governor Pederson's leadership, and support from members of the legislature, let us make this the year we achieve mental health and substance abuse parity in Iowa. I know there are powerful interests who will work hard to block this progress, as they have in the past. But let us make this the year that we take a giant step that could help thousands of Iowans to be healthy participants in the growth of our state.

Despite the progress that we have made in adding thousands of new jobs to the workforce and increasing the wages of jobs created through state assistance, we must do more. Let me introduce you to two young people who represent Iowa's future. I first met Clint Holtz from Walnut on my walk across the state last year. Clint is an entrepreneur. He owns and operates "Clint's Crawlers"-a night crawler business. He's owned his business since 1995, and has expanded every year. And Megan Wettach is from my hometown. She is a senior at Mount Pleasant High School. In addition to taking college courses at Iowa Wesleyan College, writing for the Burlington Hawkeye, and fulfilling her duties as Miss Teen Iowa, Megan owns Premier Prom & Pageantry, a formal dress shop that offers a wide array of prom dresses and other formal wear. Clint and Megan: Will you please stand?

We must recognize that we are in competition with other states for the talents of Clint and Megan, and all the other Iowans of their generation. In order to make sure entrepreneurs like them are part of Iowa's future, we must be as aggressive as they are, starting with the moment they graduate from college by offering a tax credit against their income that will help offset all or part of their college tuition. A tax credit sends a strong message of our interest in retaining these bright young people. It will help to build a more promising future for Iowa by investing in those who commit their futures to our state. We must work to ensure the kinds of jobs that will keep college graduates in Iowa - or provide those graduates with the means to create their own jobs and businesses right here at home. Today, businesses and entrepreneurs in Iowa struggle to find start-up funds. In our universities and in our businesses and industries, Iowans are on the cutting edge in new development in the life sciences, advanced manufacturing, and information solutions. Iowa State University and the University of Iowa have not only established research parks and programs to promote partnering with private sector businesses, but their faculty members are also among the nation's leaders in receiving new patents for their innovative work. But the availability of capital to aid new business ventures in Iowa is far too limited. Too often, investors overlook our state's promising ideas and entrepreneurs. We must encourage greater private sector investment in Iowa. There must be real business opportunity for those who want to live the American dream of owning their own business. Despite being second in the nation in business retention, and having the fifth lowest cost of doing business among states, more needs to be done. Iowa ranks at the bottom of states for venture capital. During this legislative session, let us take Iowa to a leadership position in venture capital by creating a set of incentives that helps fuel national Venture Capital investment in Iowa, that encourages Iowa's angel investors to make substantial investments in Iowa startups, and that enables those who can invest only a small amount to do so for a brighter Iowa future. These funds will help to create the next biotech business, converting our corn and beans into cures for illnesses, like Kemin; the next high-tech manufacturing firm like Rockwell-Collins; and the next information solutions business-which could develop into the next Principal.

This year we celebrate the five-year anniversary of Iowa's welfare reform program - one of the models for national reform. Over 98% of families who signed up for Family Investment Plan benefits five years ago have moved off the welfare rolls within the five-year limit. We're proud of their success. And we're proud of Iowa's success in making work a priority, breaking the cycle of dependency, and helping families become independent and self-sufficient.

While we take steps to encourage the development of new economy opportunities, let us not forget those who have made the successful journey from welfare to work and other hard-working Iowans currently working at minimum wage. Today, over 100,000 Iowans, many of them women, many of them raising families, earn at or near the minimum wage. These Iowans work a full productive week but still struggle to meet even the most basic of needs. As we consider millions of dollars of help for Iowan entrepreneurs and well-educated Iowans, can we not also find the political will to raise the minimum wage? Hard work's reward should be the dignity of self-sufficiency.

We face another great challenge that we must address this year. It is a challenge that threatens the quality-of-life in communities across our state. During the last 12 months, I've traveled to all 99 counties, walked over 100 miles,, and talked with thousands of Iowans. I know Iowans care about their natural resources-particularly the quality of our water and air. They appreciate our efforts with the Clean Water Initiative, begun two years ago, to encourage private land conservation. However, I can tell you that no issue generates more discussion about the environment than hog confinements. For three years, I've asked for your help to reunite Iowans to solve this issue. I am heartened by early indication of the legislature's willingness to do so. Today, I renew my commitment to work with you to find a solution, whatever it may be-local control or tougher enforcement authority. We must work cooperatively to balance the rights and liberties of livestock producers and their neighbors in order to preserve Iowa's quality of life.

Of course solving the confinement issue alone won't assure the future of rural Iowa. I am concerned about debates that seem to pit rural Iowa vs. urban Iowa. We cannot afford to be two Iowas. We are-and we must be-one Iowa. Our work should ensure economic opportunity in every one of our 99 counties. I stand ready and willing to work with the legislature to make sure that, no matter where you live or work in Iowa, you can dream big dreams-and make them real.

Our vision for Iowa's future is expansive, but not expensive: We can make Iowa government work better and smarter. We can ask the private sector to do its fair share through a decent minimum wage and mental health and substance abuse parity. We can make wise investments in early childhood education and community development that will pay off many times down the line. We can work within the realities of the budget challenges before us while protecting Iowans' priorities: a world-class education, quality health care, and good-paying jobs.

Our choice is clear: We can use the budget as an excuse to retreat, reversing our progress and jeopardizing our future. Or we can meet the challenge by making responsible decisions to cut where we can, and to invest where we must. In the end, Iowa's future will be determined by the opportunity we provide for Iowa's families. Especially now, when times are tough, we must provide hope, protect family security, and build a brighter future. This will secure the blessings of liberty for us and for generations of Iowans yet to come.

That is our mission as a state -- and my mission as your governor. And I pledge to give everything I have, and to do everything that I can, until we have accomplished this mission.

Thank you. God bless you. And God bless Iowa.
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