Governor Tom Vilsack this morning declared a new day in Iowa — through a series of proposals he outlined for legislators in his “State of the State”address. In his address, Vilsack delivered a state budget outline to lawmakers that’s three-and-a-half percent larger than the present budget. Vilsack made a campaign finance reform proposal, suggesting candidates whovoluntarily agree to spending limits get public financing of their campaigns. Vilsack suggested a special fund be created, with the interst onthat fund used to bankroll gubernatorial campaigns.Vilsack said Iowa’s biggest obstacles are demographic, and said he and thelegislature must devise ways to attract new Iowans and younger Iowans here. He warned that “without bold action, Iowa risks second-best status.”Vilsack says Iowa is among only ten states which fails to provide any direct help to school districts for building maintenance, repair or construction. He says 100-million dollars of a 300-million dollar fund for major attractions should be used to help fix up schools. The Governor asked young students gathered in the House chamber a question in Spanish and asked them to answer him in English.He asked the students what state is the best in which to live and study, they replied “Iowa.” Vilsack delivered a state budget outline to lawmakers that’s three-and-a-half percent larger than the present budget. Vilsack’sproposals include about 40-million dollars in tax reductions. The Governorproposes about 33-million dollars in state investments to reduce propertytaxes. Vilsack calls for an end to federal deductability — that’s yourability to deduct your federal tax liability from your income beforecalculating your state income taxes. He calls it tax simplification, as itinflates Iowa’s income tax rates when compared to other states, which do NOToffer it.Vilsack also proposes a modest reduction in the taxes charged to pensionersand wants to create a special tax credit for teachers and engineers inhigh-demand specialty areas.