December 22, 2014

Study shows gaming creates huge ripple in Iowa’s economic pond

aga-logoInformation from the Iowa Racing and Gaming Commission shows the gambling industry has a $1 billion direct impact on the state, and now a new survey shows the overall impact is more than double that amount. The president of the Iowa Gaming Association, Wes Ehrecke, says a study commissioned by the American Gaming Association looked at the secondary or “ripple effect.”

“When the employees from the casinos take their dollars and reinvest in the community, the many vendor companies that we use for this Buy Iowa First program, and that ripple effect shows that there’s a $2.5 billion annual economic impact supporting 16-thousand jobs and over 725 million in taxes generated,” Ehrecke says.

Ehrecke says that’s a lot of money turning over. “It spreads out throughout the entire economy of the state, certainly within these respective communities where these casinos are located — the 18, now soon to be 19 casinos. There’s that impact at the local level, but it also impacts the entire state, there’s certainly the taxes that the legislature allocates in many visionary ways,” according the Ehrecke.

The study by Oxford Economics comes on the heels of a study showing support of gambling has increased in Iowa. “Over 80 percent of people when polled think that going to a casino is an acceptable form of entertainment for themselves of others. That’s always remained pretty high,” Ehrecke says. “We strive to be premiere entertainment destinations and certainly want to be a viable part of Iowa’s economy, adding value to the state’s tourism and entertainment industry for years to come.”

Ehrecke says the casinos have weathered the economic downturn like other businesses and also have face some challenges recently. “January and February of 2014 was probably about as brutal as it could be with ice and snow and sub-zero temperatures for many weeks, and you just don’t get that back where people stayed home,” Ehrecke says. He says they face continued challenges with the ag prices being depressed and hurting Iowa’s economy, as all those things are is tied into where people’s discretionary income is spent. But Ehrecke says the industry is looking forward to the future.

“We’re optimistic that the next couple of years will continue to improve, as well as with the casinos going to land based, several more doing that, will help with that as well,” Ehrecke says. For more on the study, go to :



Drop in gas prices puts pressure on ethanol

Gas pumpNot everyone is fully enjoying the decline in gas prices, according to U.S. Department of Agriculture Chief Economist Joe Glauber. In Iowa, motorists are paying around $2.36 a gallon for regular unleaded fuel. That’s down from $3.05 a year ago.

“That’s good news for everyone except ethanol producers,” Glauber says. Iowa is the country’s largest producer of both corn and ethanol, a fuel made from corn. Corn prices have been plummeting and the decrease in gas prices has been adding to the downward pressure. As ethanol-blended fuel prices drop to keep competitive with gasoline, ethanol plants are reducing how much they’ll pay for corn.”Ethanol is competing with gasoline and a lot of our ethanol goes out in world markets,” Glauber said.

In some world markets, ethanol can’t keep pace. “Last month, we had a little bit there where ethanol prices were trading higher than gasoline,” Glauber said. “We haven’t seen that in several years.” Iowa has 43 ethanol refineries capable of producing more than 3.8 billion gallons annually. Two years ago, the prices at the gas pump hit $5 a gallon in some areas of the country. This week, there are 13 states with gas under $2 a gallon.

Latham sees ‘big appetite’ for ‘big deal’ in next congress

Congressman Tom Latham during his retirement speech Monday.

Congressman Tom Latham during his retirement speech. (file photo)

Retiring Congressman Tom Latham is offering this advice to those who’ll serve in the U.S. House and Senate next year: “do some big things.”

“We’ve got to address our long term debt,” Latham says. “We’ve got to look at entitlements…They’re not sustainable as they are and so I’m hopeful that there will be some serious legislation. We have a great opportunity but also great hazards, too, if in fact we’re not successful.”

House Speaker John Boehner and President Obama were rumored to be on the verge of what was called a “grand bargain” a few years ago, but the deal fell through. Latham and Boehner have become best friends during their time in congress over the last 20 years and Latham says he’s told his friend to “think big” and seize “the opportunity of a lifetime.”

“The speaker very well knows that this is an opportunity in a limited time,” Latham says. “And I don’t know how long he’s going to stay there, but he knows that if history is going to treat him well and treat the congress well, then something needs to be done and something very significant.”

With the 2016 presidential campaign essentially underway today, Latham cautions that “it’s going to be difficult” to reach agreement.

“You’re going to have people on both sides of the aisle that will use it as a political weapon if, in fact, you try to have a ‘grand bargain’ — a big deal that would give us solvency in the long term and that’s the unfortunate part of it…Anything is possible,” Latham says. “…I think if the president would lead, I think it would make it very possible, but he’s always been very hestitant and the ‘grand bargain’ they almost had a few years that he walked away from, you know, we were right there and it didn’t happen.”

Republicans will hold a huge majority in the U.S. House and the GOP will take over control of the U.S. Senate in January. Latham suggests a good first step would be for the president to sit down and start negotiating with congressional leaders from both parties.

“To have anything that’s going to actually work long term, that’s not going to be used as a political club in the future, it has to be bipartisan,” Latham says, “and if the president will lead, I think that there is a huge appetite on both sides in the House and Senate to actually get that big deal done.”

Latham decided about a year ago that he would not seek reelection in 2014. Latham, who is 66, describes serving in congress as the “honor of his life.” He plans to vacation “somewhere warm” and talk with his wife about what part-time work he might choose to take in the future.

Latham discussed his career and his future plans during taping of the Iowa Public Television program, “Iowa Press,” which airs tonight at 7:30.

Unemployment rate drops again in November

The state labor market improved in the last month with a drop in unemployment. Iowa Workforce Development spokesperson, Kerry Koonce, talked about the latest numbers. “Our unemployment rate dropped down to 4.3 percent, which puts us pretty much in line with where we were last year at this time at 4.2. The U.S. rate is still sitting at 5.8 percent for November,” Koonce says. The state rate was 4.5 percent in October.

Koonce says the total number of Iowans working hit a peak for the year at 1,639,800. “We added 18-hundred jobs to the overall economy, so that’s very good,” Koonce says.”The civilian labor force also grew in size, and so when you put those two things together, we had a nice drop in the unemployment rate. We had a large jump in jobs in leisure and hospitality and then in the professional and business services areas.”

Koonce says much of the increase in the leisure and hospitality area came form restaurants hiring more staff. “It’s and indication that people had more disposable income and they are willing to spend it, especially when they are already spending it on the holidays,” according to Koonce.

Some areas did see a drop in jobs including construction, which is typical this time of year, and manufacturing was also down. The trade, transportation and utilities area was still down. “And a lot of that is on the retail side where more people are doing online shopping and not in the stores. So, spending is up, but not necessarily direct walk-in traffic,” Koonce says.

Non-farm employment in Iowa is 15,700 higher than one year ago, which is one percent higher.


Supreme Court rules cable company serving Sioux City also a phone company

The Iowa Supreme Court says an Arizona company providing phone service via the internet to western Iowa can be taxed as a phone company. Cable One Incorporated provides cable TV services to Sioux City, and in 2006 it began offering what’s called Voice over the Internet Phone service. The Iowa Department of Revenue ruled the internet phone service qualified Cable One as a telephone company and it should pay state property tax.

Cable One argued its wiring was not originally installed to provide telephone service and it should not have to pay the tax. An Administrative Law Judge, and a later Polk County District Court ruled Cable One was operating a cable broadband network and not phone lines, so it shouldn’t be defined as a phone company.

The Iowa Supreme Court looked at the historical interpretation of laws governing technology and says when telephone service began while the telegraph was still being used, phone service was not mentioned in state statutes. But the courts found both services provided communication through wires through different methods are were both subject to taxes. The Supreme Court says even though Cable One’s telephone service is provided through wires originally intended for cable TV, it is still acting as a telephone company.

The Supreme Court sent the case back to the district court for more action.

See the full ruling here: Internet phone ruling PDF

Suspect caught in Cedar Rapids bank robbery

A suspect is in custody following an eastern Iowa bank robbery. Police responded to the robbery of a U.S. Bank branch on 16th Avenue Southwest in Cedar Rapids shortly after 4 p.m. Thursday. The suspect had displayed a handgun and left with cash. No one in the bank was injured.

The man left the bank on foot. An investigation led police to arrest 44-year-old Tony Alan Spies of Cedar Rapids. He was found last night in an apartment about two miles away from the bank. Spies is charged with first-degree robbery.


Escaped sex offender caught in Des Moines County

Shane Lieb

Shane Lieb

A sex offender who escaped from a southeast Iowa work release facility last weekend is back in custody. A spokesperson for the Iowa Department of Corrections says 40-year-old Shane Lieb fled a vehicle during a traffic stop on Saturday while being transported from the Mount Pleasant Correctional Facility to the Burlington Work Release facility.

He was captured Thursday and taken to the Des Moines County Jail. Lieb is serving a “special” life sentence for third-degree sex abuse in Mount Pleasant. He began serving the prison sentence in July 2009 and was in the process of being discharged to the work release program at the time he escaped.