July 10, 2003

Why Governor Vilsack Is Wrong For Your Future And Iowa’s Too:
The Personality And The Professional

By: Kevin McLaughlin

The Des Moines Register quoted Governor Tom Vilsack today as saying, “I
don’t know how to send an e-mail.”

The paper was brought into my office by a fellow employee who asked,
rhetorically, “Is this the man who’s going to lead Iowa into the next
century?” Which he immediately followed with the remark, “I hope Jay Leno
doesn’t get a hold of this.”

Worse yet, what if Jay Leno does get a hold of this, and also finds out
about the $503 MILLION Iowa Values Fund that the Governor and a small group
he’s chosen will use to pick investments in high-tech and biotech for Iowa?
It makes you wish that the bad news would end right there. But it won’t
because Tom Vilsack is the wrong person for you and Iowa’s future. But to
understand the depth and breadth of the problem, you have to understand the
man's personality and his professional background.

The Personality

Starting with his personality, remember that Mr. Vilsack disclosed that he
was abused as a child. When someone is abused at a time when they are so
young and vulnerable, the result can be a personality that constantly seeks
better treatment, or even protection, through absolute control. That effort
to control can be the driving force in personal and professional
relationships, alike, and explains a lot about his vetoes and the enormous
problems the Governor is creating for Iowans.

According to the Iowa Constitution, the executive branch is able to sign, or
veto, either policy, or appropriations legislation. Additionally, the
Governor is allowed to line-item veto appropriations bills. But, in this
case, the Legislature, which is responsible for policy decisions, created a
bill that reformed income taxes, (policy), property taxes, (policy), and
regulations governing the workplace, (policy), while creating the Iowa
Values Fund, without appropriating any funds for it, (policy). Governor
Vilsack chose to line-item veto the tax and regulatory reforms and keep the
Values Fund, over which he will exercise almost complete control.

So, after numerous public assurances about acting boldly to reform Iowa’s
tax system and regulatory environment, and about working with the
Republican-controlled Iowa House and Senate, the Governor unconstitutionally
vetoed the tax and regulatory policy reforms in the legislation.
Consequently, Vilsack’s vetoes can only be regarded as an attempt to control
both the policy and appropriations sides of the legislative process. In
other words, he’s attempting to decapitate the legislative branch in an
attempt to control everything inside the statehouse.

On the flip-side, consider the Governor’s Values Fund from the controlling
perspective and you’ll get another valuable insight into the man’s
personality. Remember that Iowa has a deficit and that it makes more sense
to motivate tax-paying people and profitable businesses to move here so that
our tax burden can be spread among a larger number of taxpayers. But
successful people and profitable businesses can look out for themselves and
tend to be independent types. So, instead of attracting people and
businesses that pay taxes, the Values Fund is set to attract high-tech and
biotech firms to Iowa that need money.

The point is that people who need money are easier to control.
Consequently, the Governor will have more influence over the locations
selected by the new businesses, probably in areas favorable to his political
fortunes and his fellow Democrats. Now part of this is just being a good
player of the game. But the combination of false representations, vetoes
and using public funds to lure businesses to Iowa in a manner that has
already been discredited, (“Investments drain state money” Des Moines
Register April 27, 2003 describing Rudi’s Bakery and Prodi-Gene’s $7.9
million and $4.2 million respective receipts of Iowa taxpayers’ money with
nothing received in return), is evidence of an illness rather than
political savvy.

Finally, consider the math that Vilsack fails to employ. One of his biggest
assertions is that “the Values Fund will create 50,000 quality, good paying
jobs over the next four years.” If those 50,000 jobs paid $50,000 each and
yielded $1,500 per year in income tax to the state, that would only total
$300 Million in tax revenues versus the $503 Million cost of the fund. The
fact is that it will take several years to get anywhere near the 50,000
level in new jobs, if the plan works. Forget that the salaries and tax
revenues are even more uncertain, based on previous experience. But you can
see how difficult it’s going to be for Iowa to dig its way out of this hole,
and how inefficient this method is.

The Professional

Worse still is Governor Vilsack’s professional background as a plaintiff’s
lawyer. If you want to attract new businesses, how many states send
plaintiff’s lawyers calling who have just vetoed a 16% tax cut and
regulatory reforms that would have given those businesses more control of
their own workspaces? Get the picture?

The Governor can make all the cutesy remarks he chooses about preferring to
be in the boardroom rather than the courtroom, referring to the
Legislature’s pending law suit to protect Iowans and its own constitutional
franchise. But the truth is that Mr. Vilsack wouldn’t know the difference
between a bathroom and a boardroom if he didn’t already have first-hand
knowledge of the former. As far as the latter is concerned, his only
experience in boardrooms may have been for the purpose of taking
depositions. Ultimately, his veto of the regulatory reforms, giving
business owners and managers more control of their workplaces, is a direct
payoff to unions, the plaintiff’s bar and the relevant state bureaucracies.

Governor Vilsack is well down the road to making Iowa even more
non-competitive than it already is. The Governor’s background of distrusting
businesses, their owners and their managers is all coming home to roost.
Any business that comes to Iowa and succeeds in becoming profitable will
likely move, given the chance, because high tax rates don’t allow those
businesses to build value. And onerous regulations open businesses up to
all kinds of lawsuits from the plaintiff’s bar, making managing a company
and building value far more difficult.

This is not intended to be unkind, but Governor Vilsack is the wrong person
to lead Iowa out of the deficits. He has no comprehension of what business
is all about, and is not the person to attract new companies to Iowa, unless
they’re desperate for money. And he is not the person to look out for the
best interests of Iowans because governing in a free market economy calls
for balance, which the Governor’s control-driven personality will not allow.

If Iowa is to take advantage of the deficit problems and onerous tax
increases being contemplated in neighboring states, then the Legislature has
to win in court. Doing so will discount Iowans’ taxes by 16%, putting more
money in our pockets and stimulating our economy. But that 16% discount
should be recognized as a critical first step in attracting new people and
businesses to Iowa. As we see young people and seniors beginning to stay,
and new residents and businesses moving in, our Legislature needs to be
ready to apply steeper discounts that will make Iowa even more competitive.
And the regulatory reforms will help enormously, too.

Support the Legislature’s efforts to protect your wealth and its work to
help you build on what you already have. It’s your future, your state and
your responsibility. AND REMEMBER THAT DISCOUNTING IS GOOD FOR YOU, GOOD
FOR GOVERNMENT AND GOOD FOR ECONOMIC GROWTH!