Massive state government reorganization awaits Reynolds’ signature

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Ottumwa Courier –

Another one of Gov. Kim Reynolds’ priorities for the 2023 legislative session made it to the finish line Wednesday as the House passed her government reorganization bill.

The House passed Senate File 514 on a 58-39 vote. It would reduce the number of executive-level agencies from 37 to 16. Reynolds is expected to sign it into law.

“Today, the Iowa House joined me and the Iowa Senate to declare an end to bloated bureaucracy,” Reynolds said in a statement following the bill’s passage Wednesday. “We are making government smaller, more efficient, and more effective. We are saving taxpayer dollars and putting Iowans’ needs first. This transformational legislation will put Iowa in the best position to help our state thrive.”

Democrats said the restructuring will have the biggest impact on Iowa’s most vulnerable populations. An amendment failed that would have restored the power of the three-member Commission for the Blind to appoint the Iowa Department of the Blind director instead of the governor.

Rep. Amy Nielsen, D-North Liberty, said this was an issue blind Iowans brought up in the subcommittee meetings, saying lawmakers should

listen to the people who use the department’s services.

Rep. Jane Bloomingdale, R-Northwood, the bill’s floor manager, said the issues talked about in subcommittee have been addressed. The current commission is already made up of people who the governor appoints, she said, and Reynolds has agreed to keep the current director in place — meaning there will be no change to the department’s leadership.

Democrats also objected to the bill’s action moving Iowa Vocational Rehabilitation Services from the Department of Education to Iowa Workforce Development and eliminating 25 full-time equivalent positions. Democrats said the move and staff reduction would hurt the program’s ability to help Iowans with disabilities find employment and education, and lead to the loss of federal funds.

House lawmakers voted down 15 amendments offered by Democrats Wednesday. All of the rejected changes, Democrats said, were direct responses to requests and concerns constituents brought up with the legislation.

Some technical changes were approved by the Senate by amendment, though 10 other proposed Senate amendments were rejected; 39 amendments from House Democrats were heard and rejected during a late-night March committee meeting.

Rep. Eric Gjerde, D-Cedar Rapids, said the unwillingness to consider changes showed the majority party was not working for the best interest of Iowans. Five Republicans joined Democrats in voting against the bill.

“How can we pass a 1,600-page bill without any meaningful amendments?” Gjerde said. “And amendments that have been made, I would argue, in my opinion (that) were made are going to hurt Iowans not help Iowans.”

Throughout the numerous meetings and committee discussions on the bill in both chambers, Democrats called the bill a “power grab” by the governor, citing changing a half-dozen positions to serve “at the pleasure of the governor,” removing term limits and giving the governor authority over some director salaries.

Bloomingdale said critics were misrepresenting some changes made by the bill. Republicans did make changes based on feedback from Iowans, she said, including amendments making sure the Iowa School for the Deaf couldn’t be closed without legislative input and keeping the Iowa Lottery as a separate division.

Currently, 25 agency directors are appointed by and serve at the pleasure of the governor, Bloomingdale said, and this bill adds six.

“This governor is not going to pick cronies, hire and fire someone that can’t do the job,” Bloomingdale said. “She’s going to hire the best people she can find. And when we have a Democratic governor, they’re going to do the same thing.”

House Minority Leader Jennifer Konfrst, D-Windsor Heights, said Republicans would not accept these changes if a Democrat was governor. She urged Republicans to think about how this could impact if in the future, the GOP does not hold the governor’s office and majorities at the Statehouse.

“Imagine if we presented you with a 1,500-page bill and said, ‘This is it, pal. This is as good as it gets, and we’re not going to change a thing,’” Konfrst said. “Imagine what you’d be saying to us. So what we’re saying here is that we deserved and Iowans deserved more input, more conversation and more work to truly make a bill that works for all Iowans.”

The governor is not the only position gaining more authority through this bill — the state Attorney General will also have more power. The bill gives the office including sole jurisdiction over election-related crimes and the ability to prosecute any criminal proceedings on behalf of the state without the local county attorney requesting assistance. The currently independent Office of the Consumer Advocate would also become a division of the attorney general’s office through the reorganization.

Rep. Brian Meyer, D-Des Moines, said these changes are politically motivated. Republican Attorney General Brenna Bird defeated longtime incumbent Tom Miller, a Democrat, in the 2022 election.

“How times have changed,” Meyer said. “Just a few years ago, I was standing here when you all pass restrictions on the attorney general that they could not bring suit against the federal government unless they get sign off from the governor. And now that we have a new attorney general, all of a sudden, things have changed. We want to now put the attorney general in charge of everything.”

Bloomingdale argued the changes were not a consolidation of power, but a way to make Iowa’s government more efficient. The governor’s office projects the changes will save Iowa $215 million in the four years. A Wednesday Legislative Services Agency report found the bill will eliminate more than 200 open full-time equivalent positions in state government, though the governor’s office has emphasized no current employees will be laid off through the reorganization process.

Most of the changes came as proposals from Guidehouse LLP, a consultant Reynolds hired for $994,000 to draft a plan on how to restructure Iowa’s system of agencies and departments. Democrats said the changes implemented in this bill could lead to further cutting of state services.

“I did read the government alignment project for the state of Iowa from Guidehouse, and in there it talks about how you can save so much money by privatizing different services,” Nielsen said.

Nielsen introduced an amendment requiring the Legislature to approve any move to privatization, It was ruled out of order.

Bloomingdale said the changes proposed came from discussion with the departments and staff who currently administer and work on these programs. The governor began conversations with department and directors in August to chart the best path forward, she said.

“So if you say there wasn’t input, you’re right, she did not contact 3.2 million Iowans,” Bloomingdale said. “That’s nearly impossible and some of them can’t talk. So she did not contact all of them, alright, but she did work with the people that work in these departments.”

Among the changes made to Iowa’s state government in the legislation:

— Multiple departments including the Department of Aging, the Department of Human Rights, Early Childhood Iowa and the Iowa Commission on Volunteer Services will be incorporated into the Department of Health and Human Services through the bill. The bill also eliminates the State Board of Health, and incorporates its functions into the existing Council on Health and Human Services, expanding that council by two members.

HHS will also fold in the Iowa Child Advocacy Board, Iowa Child Death Review Team and Iowa Domestic Abuse Death Review Team.

— The Department of Inspections and Appeals is to be renamed the Department of Inspections, Appeals and Licensing, and will take over licensing and regulation functions from other departments, like health care professional licensing from HHS and fire-code related activities from the State Fire Marshal. DIAL will also take over labor services and worker’s compensation divisions from the Department of Workforce Development. The department will also incorporate the Iowa Civil Rights Commission, which now exists as a standalone agency.

— The Department of Education will take over operations for the Iowa Braille and Sight Saving School and Iowa School for the Deaf from the Board of Regents. A stipulation was added that the school cannot be closed without the lawmakers’ approval. The department would also establish the Higher Education Division, which the College Student Aid Commission and Board of Educational Examiners would fall under.

— The Governor’s Office of Drug Control Policy, an independent agency, will become a part of the Department of Public Safety.

— The Department of Commerce will become the Department of Insurance and Financial Services and will contain insurance, banking and credit divisions.

— Iowa Utilities Board would be removed as a division of the Department of Commerce and function as a standalone board. The Office of the Consumer Advocate is to be administratively supported by the Utilities Board, but will become a division under the Attorney General’s office.

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