Supreme Court ruling raises big questions about the Iowa Values Fund

The Iowa Supreme Court has thrown state policymakers a “huge curve ball” according to one legislative leader. The state’s new economic development fund has been frozen as a result. The state’s high court has ruled democrat Governor Tom Vilsack exceeded his authority when he used an item veto to nullify tax cuts in a bill that created a new state economic development program. The Court also tossed out the whole bill. That means that new Iowa Values Fund is in limbo, even though millions of dollars worth of state grants have already been awarded to dozens of businesses. Governor Tom Vilsack says those grants will stand.Vilsack says it’s important that the state live up to the “obligations” it’s already extended to expanding businesses. Republican legislators intend to press for a deal that would enact tax cuts and business reforms as well as re-lay the legal footings for the Values Fund. Vilsack, however, maintains he’ll resist the tax cuts and focus instead on the Values Fund portion of the dispute.Vilsack says he’s encouraging republican and democrats in the legislature to work with him to continue the job-creating momentum the Iowa Values Fund has sparked in the past year. Senate President Jeff Lamberti, a republican from Ankeny, says it’s too soon to tell when or even if lawmakers will convene in special session this summer to reestablish the legal foundation for that economic development fund.Lamberti says it’s “premature to speculate” about what comes next, although he does say lawmakers will not allow the governor to keep awarding grants to businesses without some sort of action from the legislature. Reporters today asked Senate Republican Leader Stewart Iverson of Dows whether the money that’s already been handed out must be returned to the state. Iverson says they don’t “have a good answer on that yet, either.” Republican House Speaker Christopher Rants of Sioux City says lawmakers had expected that if they won the case, the tax cuts would be restored, not that the entire bill would be nullified. Rants says the “court acknowledges that they threw us a curve ball today” and he says it’ll take time for both the Governor’s office and legislators to figure out the ramifications. Rants says republican lawmakers still favor tax cuts and reform of business regulations as well as the new economic development fund. Rants says “it’s too early to say” what the next step will be because no one predicted the court would rule in the complicated way it did.