Iowa Policy Project
A quite disappointing session by most any standards. The legislature did little to give Iowa’s middle class and poor hope that there would be any help coming their way. Republicans in the legislature were able to keep some of the tax cuts that Governor Branstad bestowed on businesses while the legislature was out last fall.
So when Iowans sit at their kitchen tables to talk of finances, their hopes for them and their children, their health situations and the world situation – the kind of things families talk about – they must look at their leaders in Des Moines and just shake their heads wondering what the hell are they doing.
The cost of higher education will probably go up in Iowa thanks to the legislature while classrooms for the K-12 will possibly get a bit more overcrowded as Iowa continues its streak of underfunding education. Hopes of rising wages among the poorest in Iowa were once again dashed as there would be no talk of raising a minimum wage that is set at the lowest possible wage in the country.
On the good side, at least the legislature did not fall for the Governor’s little scheme to slowly starve public schools by cutting into the sales tax stream earmarked for schools. However, the other side of that coin is that the water pollution problems that Branstad’s little scheme was supposed to address remains untouched.
Once again Iowa’s Fiscal Partnership has a great summary of the recent legislative session here.
Not mentioned in there is Republicans in the legislature’s totally gutless approach to legalizing medical marijuana. Seems like it should be a simple project for the legislature to clean up the mess they made a couple years ago when they rushed a medical marijuana bill through at the end of the session. With the glare of media focused on the truly sad stories epileptic children, the legislature passed a bill that allowed the use of medical marijuana but not its purchase or possession.
When the problem was discovered rather than fix their mistake, Republicans decided this was a great place to make a really strange anti-drug stand. So for two consecutive sessions they have worked to once more make Iowa the butt of jokes. While they dither children with epilepsy will be seeing their access to cannbidiol oil expiring at the end of June.
The Iowa legislature is in desperate need of a major makeover this fall. We need adults who will address the needs of real Iowans, not a legislature beholden to ALEC.
IWD presentation promotes bogus job growth number
Statement by Mike Owen, IPP Executive Director
MONDAY, NOVEMBER 30, 2015
Editor’s note: When a story on the radio presented the Governor’s number as news last week, I figured I’d better seek out the Iowa Policy Project for the truth.
IOWA CITY, Iowa (Nov. 30, 2015) — The Iowa Policy Project today issued a statement from Executive Director Mike Owen regarding job growth claims offered by Iowa Workforce Development in a public budget hearing in Des Moines:
Today, during its budget hearing before Governor Branstad, Iowa Workforce Development promoted a bogus picture of job growth in our state. IWD Director Beth Townsend owes it to the people of Iowa to retract this inaccurate picture.
Without repeating the error promoted in the IWD presentation, we would make two critical observations:
First, the actual number of jobs added in Iowa since January 2011 is 101,700 (emphasis mine), according to the latest actual data. This is a full accounting of jobs added and jobs lost in all major job sectors tracked through the official Current Employment Statistics, available on the IWD website by copying and pasting this link into your browser: iwin.iwd.state.ia.us/pubs/ces/nonseasonal.xlsx.
Second, it should be no surprise that Iowa’s economy has fallen far short of the Governor’s ambitious goal of 200,000 new jobs in five years. Iowa jobs have risen at a pace of fewer than 2,000 jobs per month for five years. Monthly job growth would have needed to average 3,300 for the goal to be met.
The stubbornly slow pace of job growth has kept Iowa from full recovery from a recession that ended six years ago, before the Governor took office. While in overall numbers we have gained more jobs than the number lost during the recession, Iowa remains short of the number needed to keep up with population growth. Compared with the start of the recession, we are still nearly 35,000 jobs behind on that measure — a far more accurate sense of the condition of the Iowa economy at the end of 2015. (emphasis mine)
By contrast, the “gross gains” measure added to the IWD monthly nonfarm jobs spreadsheet early in the Branstad administration is a political contrivance. It has nothing to do with the actual state of employment in Iowa, and is plainly bogus math. It is solely about politics, and it has no place in official Iowa Workforce Development spreadsheets or presentations.
For more information about Iowa jobs, we encourage you to visit our website, and review our monthly Iowa Jobwatch — for a look at the relevant numbers. Find the latest Iowa JobWatch report at http://www.iowapolicyproject.org/IowaJobWatch.html.
If you are looking for solid, fact based opinions on what effect Iowa’s fiscal policies will have in the real world before they are enacted one of the best sources around is the Iowa Policy Project.
Once more under the guidance of Terry Branstad, Iowa is embarking on some new territory in the fiscal arena. Normally fiscal matters are a part of the budgeting powers that are held by the legislature. There is good reason for that. If the budgeting powers were held by one person, then that person would be hard to control whatever party that person is a member of. Bufgeting includes taxing powers. One could easily see that one person exercising budget and tax powers could easily reward friends and punish enemies without any checks.
This is pretty much what Terry Branstad did a couple weeks ago when he unilaterally interpreted a clause in the Iowa tax code to give something like a $40 million gift to the business community. This took place about 3 months after Branstad line item vetoed a $50 million one time expenditure that the legislature approved for Iowa schools. It looks like Branstad is running the budget on his own with schools being punished and businesses getting rewarded.
So we turn to Iowa Policy Project for some insight. From Research Director Peter Fisher we see in brief that a tax cut is not good for Iowa:
The administration’s proposal to create new sales tax exemptions for Iowa businesses is unnecessary, expensive and counterproductive. The state can ill afford another tax break that will harm essential state services while producing little or no economic benefit.
State and local taxes have little effect on business location decisions
State and local taxes are less than two percent of total costs for the average corporation. As a result, even large cuts in state taxes are unlikely to have an effect on the investment and location decisions of businesses, which are driven by more significant factors such as labor, transportation, and energy costs, and access to markets and suppliers.
Enacting a subsidy through administrative rules guarantees complete absence of evaluation and accountability
While the sales tax break has been promoted as an economic development incentive, creating it by administrative rule eliminates even the minimal level of accountability established by the Legislature for the periodic review of tax credits. There will be no review, no evaluation of its effectiveness, not even an annual accounting of its cost.
Tax breaks erode support for public investments in our future
The proliferation of tax incentives and business tax cuts over the past two decades has resulted in several hundred million dollars each year cut from the state budget. This has undermined the state’s ability to support quality education, from pre-school through public colleges and universities, which in the long run will have serious consequences for state economic growth and prosperity.
From IPP Executive Director Mike Owen:
New rule! Governor wants to make laws himself
We all know the drill: The Legislature passes bills and the Governor signs or vetoes them, whereupon they become either laws, or nothing.
Not anymore, apparently.
The move by the Branstad administration to implement a new sales tax break worth an estimated $40 million a year — possibly more — is taking place outside the legislative session. If it succeeds, we have entered a new world of executive authority in Iowa.
Business lobbyists wanted the change, it could not pass the Legislature, and the administration thinks it has found a short cut: Change the longstanding interpretation of the existing law. Presto, tens of millions of dollars will be available for manufacturers. And those same tens of millions of dollars will not be available for schools.
If the Iowa legislature has any spine at all this should be the first issue they address in the next session. However with former ALEC president Linda Upmeyer as the new Speaker of the Iowa House the chances are probably zero. Unless they stand up to the governor’s action they essentially approve of this change in the scope of power. The underlying issue is not the money, but the change in who has what power. Budgetary power was a power few legislatures have handed over willingly. It looks like Iowa’s is about to.
FOR RELEASE TUESDAY, AUG. 11, 2015
CONTACT: MIKE OWEN, (319) 338-0773, firstname.lastname@example.org
For full report: http://www.iowapolicyproject.org/2015docs/150811-minwage.pdf
Wide benefits projected in county minimum wages in Iowa
In Linn, Johnson, $15 wage would boost combined 43,000 workers
IOWA CITY, Iowa (Aug. 11, 2015) — As Congress and the state Legislature have forced Iowans to wait almost eight years for action, a new report projects benefits to 19,300 workers in Johnson County and 24,300 in Linn County if a $15 minimum wage were adopted locally.
“We need to pay attention to why this matters to families and communities — and when we do, it’s easy to see why communities in other states are passing local minimum wage laws. They know it’s needed, and they’re tired of waiting,” said Peter Fisher, research director of the nonpartisan Iowa Policy Project and author of the new report.
Fisher, using information provided by the Economic Policy Institute, noted the majority of workers benefiting would be full-time workers over age 20, and many would have families. Much of their increased pay would be spent in local retail and service establishments, boosting the local economy.
“The workers and families benefiting from a minimum wage increase are not those typically portrayed by opponents who want to dismiss the importance of this issue to low-income working families,” Fisher said.
The report found that with a gradual, five-year increase in the minimum wage to $15 per hour in Johnson and Linn counties:
— Of those who would benefit from the higher wage in Johnson County, 59 percent are women, 58 percent work full time, and nearly a third are over age 40, while only 14 percent are under 20. In Linn County, 54 percent are women, 60 percent are full-time workers, and 41 percent are over age 40.
— Almost all workers in the two counties who are now living below the poverty line would see a wage increase.
— A higher minimum wage would put money in the pockets of low-wage workers and boost spending in the local economy, which in turn would lead to additional local retail and service jobs.
The report is available on the Iowa Policy Project website, www.iowapolicyproject.org.
Iowa’s minimum wage of $7.25 took effect in January 2008, and the federal wage followed at that level in July 2009. Twenty-nine states have a minimum wage higher than $7.25, including all of Iowa’s neighbors except Wisconsin.
The Iowa Senate passed an $8.75 wage this year, but the issue did not come to a vote in the House. Governor Branstad has not supported a minimum wage increase.
“While worker productivity has nearly doubled since 1968, the real value of the minimum wage has fallen 25 percent,” Fisher said.
Recently, Johnson County officials signaled their intent to push for a $10.10 minimum wage to be phased in by 2017, and a public forum is scheduled on the issue for Wednesday at 6 p.m. at the Johnson County Health and Human Services Building in Iowa City.
“There’s a wide range in what counties and cities around the country are proposing,” Fisher said. “Most of the cities and counties that have adopted a local minimum wage have set the wage above $10 per hour, many at $15, and most have indexed the wage to inflation.
“We know from our ‘Cost of Living in Iowa’ research that $15 is closer to the idea of a living wage, so we thought it would be worth knowing what kind of impacts that would have in a couple of major Iowa counties. And it would still fall short for most families in Johnson and Linn counties. Iowans need work supports such as food, energy and child care assistance to fill the gaps in household budgets.”
While no locality in Iowa has yet taken the step of passing a county or city minimum, 24 cities and counties across the country now have a higher minimum wage than the federal.
“The list will keep growing,” Fisher said. “Campaigns to raise the minimum wage are planned or underway in at least 10 cities right now.”
Studies of moderate increases in the minimum wage have found no discernible effect on jobs, the report noted. Even with an increase to $15, the resulting boost in local spending, reduced employee turnover and hiring costs, and the ability of employers to make other adjustments will likely minimize effects on employment.
The Iowa Policy Project is a nonpartisan, nonprofit public policy research organization based in Iowa City. Reports are available at www.iowapolicyproject.org.
This is an excellent well researched article that is well worth the time to read in full. Really brings the issue home since most of us personally know people who will be directly impacted by a county wide minimum wage raise.
There are several myths surrounding a rise in minimum wage that have become talking points which do not survive close scrutiny. There are a plethora of articles on the internet debunking these myths. I will direct folks to this debunking on Salon. A simple googling of ‘minimum wage myths debunked ‘ will get thousands of articles.
As noted in the press release above, Branstad opposes a minimum wage increase. Minimum wage increases have also been a target of ALEC. The tactic for ALEC has been to take away local control from cities and counties in certain ares and give control of those areas strictly to the state. Minimum wage is one and fracking is another. With the Republicans in the Iowa House and Senate firmly controlled by ALEC we should fully expect such a measure to be introduced in the Iowa House shortly after the swearing in and replacement of Kraig Paulsen as leader. This is a major issue for ALEC across the country.
Raising the minimum wage was a big winner at the polls last November even in red states like Arkansas. Iowa’s Republicans will once more they are out of step with their constituents by standing four square against minimum wage raises.
Finally, the basic question that seems to capture all the misinformation in one statement – How much more will my Big Mac cost? Well, read it here and be amazed. Looks like not much more.
From Rep. Kirsten Running-Marquard
On July 2nd, Governor Branstad vetoed $56 million in urgently needed school funding. The money was approved by lawmakers in a compromise during the 2015 legislative session.
In an effort to restore school funding, I and other lawmakers are calling for a special session of the Iowa Legislature to overturn the veto. For a special session to occur, two-thirds of Iowa lawmakers (67 in the House/34 in the Senate) must formally request one. Above is my official petition.
Iowa school leaders say the result of the $56 million veto will be larger class sizes, fewer teachers, and higher property taxes. A petition from Iowans to lawmakers calling for a special session was also launched last week and has already gathered over 5,000 signatures. Anyone interested in signing the petition can go here.
The state just ended the fiscal year on the June 30th with a 6% increase in revenues and collected a record $8 billion for the first time in Iowa history. Over the last five years, school funding has slipped to about 1.85% annually, including one year when the Republican party and Governor Branstad left schools with zero. That’s compared to average increases of about 6% in the 1980’s to 4% in the 90’s.
Separately here is an analysis from Iowa Policy Project:
Some folks may buy into Gov. Branstad’s line about spending “one time money” as a solid reason for a line item veto. But as often happens, Republican “logic” falls apart under scrutiny. Mike Owen of Iowa Policy Project provides just such scrutiny:
Set aside for a moment that it can be quite sensible to use one-time funds for ongoing expenses. It depends on the circumstances. Set aside the fact that Iowa revenues and projections are strong and that state money seems to be available on an ongoing basis for corporate subsidies if not for restoring repeated shortfalls in education funding.
In the case at hand, the Governor vetoed one-time funds — for public schools, community colleges and the three regents universities — that ironically would have been spent in line with his own stated concern. The $55.7 million in one-time funds for local schools and area education agencies would have supplemented regular funding, set at 1.25 percent growth per pupil, all part of a package negotiated by the split-control Legislature.
Here’s the oft-stated concern about one-time funds, in a nutshell: You don’t spend one-time money on things that commit you to the same or greater spending in the future, because you don’t know whether the funds will be there later on.
For K-12 schools, the legislation specifies that funds “are intended to supplement, not supplant, existing school district funding for instructional expenditures.” It goes on to define “instructional expenditures” in such a way that assures the funds are for one-time uses that carry no additional commitment beyond the FY2016 budget year.
So, you can add to one-time expenses that you would have had to leave out, for purposes such as textbooks, library books, other instructional materials, transportation costs or educational initiatives to increase academic achievement. You can’t plan on having the same funds available in the following budget year.
For community colleges and the regents, each section of the bill included this stipulation: “Moneys appropriated in this section shall be used for purposes of nonrecurring expenses and not for operational purposes or ongoing expenses. For purposes of this section, ‘operational purposes’ means salary, support, administrative expenses, or other personnel-related costs.”
With or without the one-time funds that would have helped school districts, the legislative compromise ensures the continued erosion of the basic building block for school budgets, the per-pupil cost.
For the last six budget years, per-pupil budget growth has been above 2 percent only once. Once it was zero, and schools for the coming year are at 1.25 percent. This does not come close to meeting the costs of education at the same level year after year.
Supplemental State Aid (formerly termed “allowable growth) defines the percentage growth in the cost per pupil used to determine local school district budgets, which are based on enrollment. For FY2016, the Legislature and Governor have set the growth figure at 1.25 percent. Though state law requires this figure to be set about 16 months before the start of the fiscal year, the issue was not resolved until last week, when the Governor signed the legislation, and the fiscal year had already begun. The Senate passed 4 percent growth for FY2017 and the House 2 percent, but no compromise emerged and that remains unsettled. The education funding vetoed last week by the Governor affects separate one-time spending that would not have affected future budgets.
Catching up on some old reading I finally got around to reading Peter Fisher’s synopsis of the disastrous Kansas budget over at Iowa Fiscal Partnership.
Justice Louis Brandeis once called states “the laboratories of democracy.” As the major laboratory for crazy right wing anti-tax, anti-government policies Kansas has pretty much proven that their policies don’t work.
Here is the synopsis:
Keeping Ahead of the Kansans
By Iowa Fiscal Partnership
IFP POLICY SNAPSHOT /
Iowa’s Neighbors Show the Folly of Drastic Cuts to State Income Tax
• Big income-tax cuts in Kansas have dramatically reduced funding for schools, health care and other services.
By Peter S. Fisher
As state legislators consider drastic cuts in Iowa’s income tax, they would do well to consider the experience of our neighbor Kansas, which enacted a huge income tax cut in 2012, and cut taxes again in 2013. These cuts have dramatically reduced state funding for schools, health care, and other services.
These Kansas tax cuts were touted as a powerful economic development tool. Businesses and jobs would flock to Kansas, and growth would be so strong that, according to some, state tax revenues would actually increase.
Instead, the state of Kansas has been forced to cut school funding each year since enactment. At a time when the majority of states have increased education funding to make up for cuts during the recession, general state aid in Kansas has continued to fall, and per pupil funding is 15 percent below pre-recession levels, with school closings and increased class sizes the result. Two districts recently announced they will have to end the school year early for lack of funds. The state recently abandoned the school funding formula; aid is no longer tied to enrollment. Most of the state’s reserves have been used up just to keep services afloat, leaving the state with no cushion to soften the effects of the next recession. The state’s bond rating has been lowered.
As for the tax cut being “a shot of adrenaline” for the state’s economy, as the governor predicted, the anticipated job growth did not materialize. Instead, private sector jobs in Kansas have grown by 3.5 percent since the tax cuts took effect, well below the 5.0 percent growth nationally over the same period.
It is instructive to consider as well the experience in Wisconsin, where a large personal income tax cut took effect at the start of 2013, with similar results: subsequent job growth of 3.4 percent, farther below the norm than in Kansas.
None of this should come as a surprise. Most major academic research studies have concluded that individual income tax cuts do not boost state economic growth; in fact, states that cut income taxes the most in the 1990s or in the early 2000s had slower growth in jobs and income than other states. Businesses need an educated workforce, and drastic cuts to education are likely to make it difficult to attract new workers, who care about their children’s schools at least as much as they care about taxes. Nor will income tax cuts help small businesses create jobs. Only a tiny fraction of those paying income taxes own a business, and of those most are not in a position to create more jobs, or can expand employment only if demand for their services increases, regardless of taxes. (footnotes at link)
Just Thursday the Kansas legislature overwhelmingly rejected a new tax plan in the face of huge cutbacks for education and drastic lowering of bond ratings. Early Friday morning there was a reversal, but taxes enacted were just tinkering at the edges. More on that here:
Kansas is hardly alone in this. Presidential hopeful Gov. Scott Walker has turned a similar trick in Wisconsin as noted above.
In Louisiana, the legislature and the presidential hopeful Bobby Jindal are locked in negotiations over how to pay for any services and yet adhere to anti-tax guidelines laid out by Grover Norquist. Yep, legislators turned to Grover Norquist for guidance. Norquist is the unelected self proclaimed anti-tax guru.
We are watching these states and others with Republican governors and legislatures circle the drain of state insolvency while they turn their states into little pits of hell on earth for their citizens. Iowa is but one senator from joining the combination of Republican dominated legislature plus a Republican governor that seems to be the formula for disaster. Thus, while the presidential election gets the press, the local races are extremely important.
While stories abound of states cutting budgets and strangling themselves, Minnesota and California have both shown that fairer taxation and public spending for common good programs can have a great effect on improving the economy. From an analysis of Minnesota’s economy:
Minnesota is one of the top-ten best economies in the country; it is also a high-tax and high-spending economy.
“For so long, the accepted formula is that in order to have a healthy state economy, you have to have low taxes, low spending, and right-to-work laws,” Haglund says. “Minnesota actually has turned all of that on its head.”
Once again the folks at Iowa Fiscal Partnership provide solid analysis on why Iowa is having trouble funding even its most basic services at a time when politicians of all stripes claim the economic outlook in this state is good. The answer lies in the priorities that Iowa’s legislators set. Like so many states these days, priorities are skewed to the immediate gratification of business owners at the expense of their customers, the citizens of Iowa.
Peter Fisher, Research Director at Iowa Policy Project, offers a concise analysis in this backgrounder at the Iowa Policy Project. Fisher’s conclusion is also very concise:
We have a problem of priorities. We keep underfunding services for average Iowa families — education, health, work supports, natural resources — in order to finance massive tax reductions to businesses that don’t need it. And we spend in excess of $350 million each year on business tax credits that continue on autopilot, with no sunset, despite the state’s own analyses that fail to find evidence of appreciable benefit to the state from some of the largest of these subsidies.
It is time to admit that the tax cuts enacted in 2013 were excessive, and are causing long term damage to the state. At the very least, the $50 million increase in the business property tax credit portion of those tax cuts scheduled for next year should be delayed or eliminated.
But that is not enough. There should be a moratorium on any further tax cuts or tax credits. All business tax credits should be subject to effective caps and sunsets to force a serious evaluation.
Without such measures, we will continue down the road of tax-cutting our way to mediocrity and shortchanging our children’s future.
Handing out favors to businesses will not meet what should be Iowa’s real priorities. It is not working in other states either. The booming state economies – California and Minnesota – have budgets that put people first and have raised taxes.
Note: This is edited from the weekly email report from Senator Courtney. To see the full report please go to Senator Courtney’s website.
Note2: This post missed the schedule last week. To make sure that important info in here is disseminated it has been rescheduled. Tomorrow we will have the most recent Courtney Report
LET’S INCREASE THE PAY FOR 181,000 LOW-WAGE IOWANS
I was proud to vote this week to increase the wages of Iowa’s lowest-paid workers.
According to the Iowa Policy Project, 181,000 Iowans will benefit from an increase to the minimum wage. Here are some statistics on who will get a raise under the proposal approved by the Iowa Senate this week:
• 72 percent are over the age of 20.
• 59 percent are women.
• 20 percent have children.
• On average, they earn 44 percent of their family’s total income.
It’s been seven years since Iowans have seen an increase to the state’s minimum wage. No other state has lingered at $7.25 per hour longer than Iowa. Five out of six states surrounding Iowa have a higher minimum wage. By following suit, Iowa families will have bigger paychecks that will boost the economy when they’re spent at local businesses.
Senate File 269 increases the state minimum wage from $7.25 to $8 as of July 1 of this year and to $8.75 by July 1, 2016. This modest proposal got bipartisan support in the Senate. The bill now goes to the House for its consideration.
STEM IS PREPARING IOWANS FOR SKILLED JOBS
The Legislature has worked hard to bolster efforts to position Iowa’s young people and the state’s economy for growth in high-skill jobs and industries.
This includes efforts to support what is known as STEM — Science, Technology, Engineering and Math. These are fields that lead to high-skill, well-paying jobs and are vital to a thriving 21st century economy. STEM skills are the basis for innovative problem solving and discovery, which are best acquired through exploratory learning and active student engagement.
STEM is also an economic development tool. When we equip a workforce with high-quality education and skills, we set the stage to attract and expand businesses, which will in turn create more good jobs for Iowans.
Student interest and achievement in STEM has increased significantly in Iowa in recent years, thanks to a statewide STEM initiative that brings together educators, businesses, non-profits, state agencies and community leaders.
Since 2011, an estimated 250,000 school-age Iowans and tens of thousands of educators have benefited from Iowa’s STEM focus. Opportunities for hands-on learning have included community STEM festivals, classroom activities, professional development and more.
Annual evaluations show steady gains in:
• Post-secondary STEM majors at our community colleges, public universities and private colleges. There has been a 43 percent increase in degrees award from public universities in STEM fields.
• The number of teaching endorsements issued for math and science teachers. Iowa saw a 13 percent increase between 2012 and 2014 in teaching endorsements in science or math.
• Support for STEM education and jobs among Iowans. Three years ago, 26 percent of Iowans were familiar with the concept of STEM. Today, 41 percent of Iowans know about the importance of STEM education.
Learn more about STEM and the many programs it’s generating in Iowa at www.iowastem.gov.
QUALITY CHILD CARE FOR WORKING FAMILIES
Most young children in Iowa grow up in homes with working parents. In fact, Iowa has the highest percentage of households with children under age six who have all available parents in the labor force– 77 percent, according to the U.S. Census Bureau.
These statistics illustrate that Iowans work hard. With young kids in childcare an average of 36 hours per week, it also shows the importance of high-quality care.
The brain develops rapidly from birth to age five, building the foundation of cognitive and character skills. As many families know, good care that helps ensure a child’s success in school and life can come at a high cost.
The joint Health & Human Services Appropriations Committee recently heard about changes to federal law that will help to improve Iowa’s Child Care Assistance Program. Some of those changes include improvements in training for childcare providers and changes in program eligibility requirements that no longer penalize families when they receive modest pay increases.
The Senate will be proposing additional changes that will reward childcare providers for reaching certain quality benchmarks and changing income eligibility limits so that more working families are eligible for assistance.
These changes will ensure that more families with modest means can get high-quality care for their children. It also means that parents can focus on their jobs when they are at work, with the assurance that their children are in a safe, nurturing environment.
Learn more about childcare assistance in Iowa at http://dhs.iowa.gov/child-care.
ENSURING IOWANS GET PAID FOR THEIR WORK
This week, the Senate passed Senate File 270, a bill to ensure all Iowans get paid for their work.
Sadly, $600 million in wages are stolen from Iowa workers each year. Wage theft can occur in many forms. One example is an employer failing to pay a worker for the hours of work performed or an employer not giving tips to servers.
Iowa’s wage theft laws are so weak that they are impossible to enforce. The result? Iowa workers get ripped off by unscrupulous employers, and the majority of businesses that play by the rules are put at a disadvantage.
Most Iowans aren’t at risk of being cheated by their employer, but low-wage workers often are, and they’re the ones with the most to lose.
Just hiring more investigators won’t fix this wage theft problem. We need laws that make it clear you must pay your workers, and make it easier and safer for workers to stand up for their rights. Senate File 270 would make Iowa’s law more straightforward with these three changes:
1. Employers would be required to keep a written record of the terms of employment.
2. The defense that an employer “unintentionally” failed to pay employees would no longer be acceptable.
3. Employees filing wage theft claims and those who offer testimony on their behalf would be protected from retaliation under threat of penalty.
I urge the House to do right by hard-working Iowans by approving this bill.
The Iowa senate passed a raise in minimum wage Monday on pretty much of a party line vote. One Republican joined twenty six Democrats to pass the bill. This would be good news if Democrats controlled the other legislative House and we still had a Democrat as governor. However with Republicans controlling both of those branches there is a good chance that this bill will never see the light of day again. As a friend told me you can probably plan on Tom Sands to let it die in the House Ways and Means Committee, never to see any more action. No mess, no fuss and no raises for Iowa’s poor.
No doubt any stories of a minimum wage will disappear from the pages of Iowa’s newspapers and the screens of Iowa’s TV stations. Maybe an occasional mention in blogs like this, but for the most part out of sight, out of mind.
But the real irony in this story is that at the national level the Republican Party is planning on making a campaign out of the inequitable income distribution in this country. Quit laughing, I am serious. Jeb (I am the third) Bush has already been pushing the issue, as have such union busters as Scott Walker and Chris Christie. Even the religious crazy wing of Huckabee and Santorum have suddenly discovered that some Americans are starving. All of course blame President Obama who, in their altered minds, has created the problems by causing Republican obstruction for six years an many jobs bills, spending programs and tax adjustments to pay for them. Makes sense to them.
What do you suppose their answer is? Why give more money to the wealthy of course! Continue that awesome trickle down economy that has brought so many benefits to – well their donors, the .1%. Don’t expect to hear that spoken out loud. Don’t expect to hear any solution spoken out loud. The strategy today is for Republicans to criticize only but answer no questions. Won’t work you say? Ask Sen. Ernst about that.
But there has been some truly grudging movement among the wealthy to finally take a trickle on their employees. Walmart created major headlines last week when it announced it would trickle on its employees a little bit this year, a little bit more next year. Walmart is owned by half a dozen of the wealthiest people in the world. These are people who fought tooth and nail so that no stinking employee would get a nickel of their hundreds of billions of dollars. Now they are suddenly seemingly showering their employees with trickle down. Did they finally get to the point that they realized that they had so much money it was time to trickle?
That would be a laugh. Much speculation has been put forth on the cause, but I think many folks looked way too deep for motives. Walmart was getting hit in the pocket book. Sales are decreasing because one of their major constituents can no longer afford to shop at Walmart. Even though Walmart advertises that they are the low price store they are not. The very poor are now going to dollar stores with the little money they have. The Republican wet dream of cutting food stamps has been partially realized and those who have lost government aid must make what little they have stretch further. Thus Walmart is too costly. With a significant portion of their low level employees getting government aid in the form of food stamps, Walmart’s employees are going elsewhere.
Add to the mix that Walmart employees are in near rebellion over wages and ridiculous expectations of availability to work anytime they are called and you can guess that Walmart had created a monster for themselves. Internal high level memos were leaked to the press that discussed such problems. Sales were sluggish and suddenly board members started to care. See, they got hit in the pocketbook so now they care. One of the memos discussed lack of product on shelves along with expired products on shelves. Since I do have to shop at Walmart about once a month for a couple of products I can get no where else – remember they ran much of their competition out of business – I can attest to those problems. Lots of empty shelves, lots of product out of place, expired or near expired product on the shelves and no one, literally no one working on it.
So Walmart’s raise in wages was not due to their generosity, but to self-preservation. That is a real trickle on by the Walton heirs.
Liberals have long pushed for wages beyond the minimum to what is known as a living wage. A living wage varies from place to place due to cost of living differences. Right now about $15/hour is a generally accepted minimum living wage. There are a couple of small pockets where a living wage is in effect such as Seatac, Washington which voted it in a year and a half ago. It is hard to isolate what effect such laws have had on local economies since those earning a living wage is narrowly defined and do not necessarily live in that community.
But there is one state that has raised wages considerably, taxed the rich a bit more and has done it for a long enough period that the effects can be evaluated. Many may have heard this week of the success stories coming out of Minnesota. Iowa and Minnesota elected new governors in 2010 both changing parties from their previous governors. In Minnesota, Democrat Mark Dayton faced a huge leftover deficit, and the specter go the I-35 bridge collapse under his predecessor, Tim Pawlenty. Branstad came back into power in Iowa to a budget that was actually in pretty decent shape, and an economy that weathered the Republican recession of 2008 fairly well. Branstad came in with promises of 200,000 jobs and higher wages.
The two governors took entirely different approaches. Branstad took the usual Republican approach of tax cuts for the rich and state cut backs in spending. In Minnesota minimum wages were raised and the highest earners were taxed at a slightly higher rate.
Iowa’s economy has plodded along as the national economy has gained steam. Jobs in Iowa have increased but at a pace far below that promised by Branstad. Meanwhile in Minnesota the economy has prospered. Jobs are up nearly 200,000 under Dayton, governmental finances are in tip-top shape and roads are being repaired. Iowa’s roads and especially its bridges are among the very worst in the country.
Once more tried and true liberal answers to economic problems are proven to work while Republican approaches prove not to work. While the contrast between Iowa an Minnesota are stark, the contrasts between Wisconsin and Minnesota are even more stark. Given that Wisconsin and Minnesota are remarkably similar in many respects, the contrast in approaches and results between now presidential wannabe Scott Walker and Mark Dayton are much more easily discerned.
Republican economic ideas are written by the rich for the rich. Democratic economic ideas are based on scientific research and experience. Once again, the Democratic model proves the best and most reliable model.
Just as this is posted, a new Elizabeth Warren video is making the rounds. Warren says in about 6 minutes what I was trying to say. Since I can’t put the video here you will have to go here to watch it.
It surely is a strange situation when we have our Republican legislators tell us out of one side of their mouths that there is no money for Iowa schools to maintain the status quo, yet from the other side of their mouth the can tout all the tax cuts they have garnered for their rich contributors. Once again, Iowa Fiscal Partner brings this to light. Once more I suspect that few will read the report and fewer still will do anything about it.
IOWA CITY, Iowa (Feb. 11, 2015) — More companies are benefiting from a lucrative tax subsidy that permits large, profitable corporations to get checks from the state without paying any Iowa income tax.
The latest annual report from the Department of Revenue on the use of the Research Activities Credit (RAC) shows that 248 companies claimed $51 million from the program in 2014, one-third more than the highest number of companies in the last five years.
Most of the credit claims — $34.8 million, or 68 percent — were paid out as checks, not as tax reductions.
“Most notable is that Iowa continues to give a lot of money to companies that aren’t paying income tax. There were 181 companies that received RAC checks from the state because their tax credits exceeded their income tax liability,” said Mike Owen, executive director of the nonpartisan Iowa Policy Project in Iowa City, part of the Iowa Fiscal Partnership.
“The $35 million that went to those 181 companies could have provided 1 percent supplemental state aid for public schools, or it could have gone to other public services, if it had been part of budget discussions. But the state does this kind of spending outside the budget process.”
The report, released Wednesday, also shows:
— Only 16 companies — or 6.5 percent — claimed 83 percent of the benefits and at least 75 percent of the checks.
— Those 16 companies each had at least $500,000 in claims, totaling over $42 million in 2014.
— The top five companies benefiting from the credit have been the largest beneficiaries over the last five years: Rockwell Collins, Deere & Co., Dupont, John Deere Construction and Monsanto.
“Those are highly profitable companies. We need to be asking whether it makes sense, when school budgets are tight and enforcement of environmental and workplace laws are weak, to be subsidizing these businesses to do research that they already would have to do, and can afford to do on their own,” Owen said.
Owen noted a special tax credit review panel appointed in 2009 came back in 2010 with many recommendations to curtail spending on business tax credits — including elimination of the so-called “refunds” of the research credit.
Rockwell Collins was the biggest corporate beneficiary in 2014, with $11.7 million in claims, followed by Deere at $9.4 million and Dupont at almost $6.9 million.
Does anyone besides me think that giving money to corporations is a very bad way for Iowa to spend taxpayer dollars? This goes against everything I ever learned about democracy, and also seems to go against everything I hear the right say about government