February 9, 2012

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University presidents make direct money pitch to legislators

February 9, 2012 By

Members of the Board of Regents and the presidents the state-supported universities made their pitch for state funding at the capitol Wednesday. Iowa State University President, Steven Leath, says they need money to deal with a combination of a growing student body and rising infrastructure costs.

“If we are going to continue to provide a quality education, we need funds just to keep up and give all the students, including these new students, the same quality education there predecessors had,” Leath said. Representative Ron Jorgenson, a Republican from Sioux City, said there’s a public relations issue about how the schools operate, and asked the presidents if they should bring in someone to do an outside evaluation.

“Do you think that would be a good idea to counter this perception that’s out there that you are too costly and too inefficient?, Jorgenson asked. University of Iowa President, Sally Mason, responded that she didn’t want to waste money to learn what she already knows. She says they have already had and outside review.

“It showed that we were a $6-billion asset to the state of Iowa, and yet people then turned to me and said ‘well I don’t believe that.’ So, tell me what would convince people of what we know we’re doing and were doing well,” Mason said. Mason says what they are doing well at is cutting costs– she says all three colleges have slashed administrative costs, while at the same time trying to maintain higher educational standards.

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Report suggests state support of higher education lagging

February 7, 2012 By

A coalition of liberal-leaning groups has issued its own analysis of Republican Governor Terry Branstad’s spending priorities for higher education. Andrew Cannon authored the report for the Iowa Fiscal Partnership, to call lawmakers’ attention to the level of funding for the state universities and community colleges.

“Our hope is we’ll look at what is needed,” Cannon says.

According to Cannon’s calculations, the University of Iowa, Iowa State University and the University of Northern Iowa are getting 3.5 percent less state support this year compared to last year. Cannon also suggests state support of the 15 area community colleges is still less than it was in 2008 or in 2009.

“Over that same period, community college enrollment has grown from 88,000 students to over 106,000 students,” Cannon says. “So the questions we need to be asking: Are we meeting the needs or are students going to be faced with larger debt burdens as they move on to their careers?”

Governor Branstad’s spokesman says Iowa’s higher education institutions “are a priority for the governor, which is why they were one of the few institutions to receive increased funding in the governor’s recommended budget.” The governor’s aide noted the “overwhelming majority” of state agencies are seeing no increase or a reduction in funding during this time of “scarce” state resources.

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ISU holds engineering career fair

February 7, 2012 By

I.S.U. engineering career fair.

Engineers are in high demand in Iowa right now and today in Ames, more than 200 companies will be meeting with thousands of young people hoping to enter that line of work.

Brian Larson is director of Engineering Career Services at Iowa State University.

“I think the economy is just really picking up and we’re living in a much more technological world, so there’s a big demand for engineers right at the moment,” Larson said.

 He’s helped organize the I.S.U. College of Engineering Spring Career Fair. The event runs from 12 to 6 p.m. at Hilton Coliseum and the Scheman Building.

Many of the fair attendees could end up with a job by the end of the week. “In the days following the career fair, we’ll have upwards of 1,200 interviews happening and many students will be walking away with full-time positions or intern/coop positions,” Larson said. Good job prospects and high salaries are among the reasons Iowa State and other universities are experiencing record engineering enrollments.

Larson notes the average starting salary for an engineer is just over $58,000 a year. A recent report in the Wall Street Journal stated seven of the top 10 highest-paying college majors are engineering degrees.

 

 

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Bid to deny pay hikes to college presidents dies

February 3, 2012 By

A proposal to deny pay raises to the presidents of Iowa, Iowa State and UNI if tuition rates for students go up has died in the Iowa House. Representative Jeremy Taylor, a high school teacher from Sioux City, was pushing the idea.

“There’s an age-old fallacy within education institutions that you either give us more money or students are going to suffer,” Taylor said. “Now I think there is a third-rail and a third option and that option is to look at administrative expense, and the cuts should come from the top.”

A three-member subcommittee rejected Taylor’s bill after more than 20 minutes of discussion on Thursday. Representative Mary Mascher is a Democrat from Iowa City, which is home to the University of Iowa. She told Taylor tuition hikes are really the fault of legislators who’ve failed to provide the state universities enough money.

“You seem to think there isn’t a correlation between what we allocate in the legislature and tuition increases and what I’m telling you there’s a direct relationship,” Mascher said.

Representative Josh Bynes, a Republican Osage, suggested the bill’s death doesn’t mean the “critique” of university administrators is over.

“I realize that this bill has got some heartburn all the way around,” Byrnes said. “I think that sometimes legislation can also be used as raising awareness and I think the awareness piece here on this piece of legislation is that there’s a serious concern about rising tuition costs.”

In December, the board that governs the state universities voted for a 3.75 percent increase in tuition rates for undergraduates who are residents of Iowa. That higher rate goes into effect for the fall semester. This past August the Board of Regents voted to hike the base salaries for the presidents of Iowa, Iowa State and UNI by four percent. UNI president Ben Allen and his wife have donated his salary hike to a university scholarship fund. Iowa State’s president retired in January and his replacement has taken over in Ames.

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Economists say Iowa’s income taxes should be target for reform

January 13, 2012 By

Two Midwestern economists agree a state’s economy can be aided by a “competitive” tax system, but not necessarily by new tax incentives or the dramatic cut in commercial property taxes legislators are considering.

Creighton University economist Ernie Goss would start, instead, by lowering income taxes on individuals and corporations.

“I see too much in terms of incentives,” Goss says of Iowa’s tax system.

Iowa State University economist David Swenson says “efficient” and “well-run” state and local governments can be the “foundation” for a state’s economy, but he also sees the state’s income taxes as a key target for improvement.

“We need to lower the rates and broaden the base,” Swenson says. “We get rid of some of the distortions and/or the gimmicks — we make the system more predictable.”

Legislators and the governor have been negotiating for more than a year over a package that would lower commercial property taxes, but Swenson says state policymakers need to ensure there are “comprehensive” tax adjustments for all types of property, not just commercial.

“We have very, very beneficial provisions for ag-land, for residential properties,” Swenson says. “But the commercial side doesn’t get the same kind — just by virtue of how commercial property changes over time — doesn’t get the same kind of breaks.”

Goss, the economist from Creighton, says property taxes seem more onerous than income taxes, for example, because most people pay property taxes in two annual payments.

“Let’s focus more on the growth side. Let’s look at income taxes,” Goss says. “I think that’s where Iowa has some competitive issues.”

Goss and Swenson made their comments during taping of the “Iowa Press” program which airs tonight on Iowa Public Television.

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Charles City plant finds niche market in China

December 26, 2011 By

Over the past 40 years, livestock processing facilities in Iowa have had to diversify in order to stay in business, but a plant in northeast Iowa has found a niche market and is gearing up to provide a delicacy to China. Cedar River Processing in Charles City will process spent hens, or hens who no longer are top egg layers.

General Manager Gary Shank says the timing was just right because they wanted to expand and another company was leaving town. “We started looking about a year-and-a-half ago to find a processor who would process some spent hens with a head on and feet on and nobody would do that,” Shank explains. “So we started looking to see where the most spent hens were in the country, so we started looking in Iowa to find a further processing facility.”

Shank says Cedar River Processing is affiliated with the Charles Austin wholesale meat company of Chicago which has been doing business overseas for years.

Iowa State University Extension Livestock Specialist John Lawrence says partnerships like that are one of the keys to success. He says the Charles City plant has found a niche in a couple of ways. “Iowa being the largest egg producing state in the nation has a large number of spent hens that historically have had a very low value, and have at times have even been a cost of how do you dispose of these animals. And then doing it in such a way in finding a market where they can utilize that product.”

Finding enough animals to keep the facility running is imperative to its success. Gary Shank says they’ve done their homework. “It’ll be slow at first as we get people trained, and then we hope to get to 60,000 birds per day on one shift. And a year or so down the road, we’d like to put on a night shift where we’re killing 100,000 birds per day,” Shank says.

All that processing equals a number of jobs for Charles City. Shank says they’ll initially employ around 60 workers and hope to more than double that number to nearly 140 over the next three years.

Lawrence says Iowa has a large supply of ag resources,  but a population of only three million, which is why such international connections are so important.

“So we’ve got one percent of the people, if we only produced one percent of say the pork or once percent of the beef or the chicken or whatever, so we only fed Iowans, it would greatly, greatly limit our economic activity if we didn’t trade outside our state borders. You can take that extensions a step further and say trade outside our national borders to say China.”

The exports of chickens to China from Cedar River Poultry are expected to begin very soon, as the plant is expected to begin processing hens on December 27th.

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Farmland values hit an all-time high in ISU survey

December 14, 2011 By

Michael Duffy

Iowa State University’s Extension Department has been doing surveys of farmland values for 70 years, but the results for this year show numbers like nothing that’s been seen in the previous seven decades. Economist Mike Duffy put together the survey.

“The biggest record in my opinion was the percentage increase, our survey this year showed a 32.5% increase (in land values), and that’s higher than even what we saw in 1973, which as a little over 31%,” Duffy says. Landowners in all 99 counties saw increases.

“Every county was up over 20%,” Duffy says, “the highest county actually was Scott County, and it was up 37%. The lowest percentage wise was Washington County, but it was still up 28%.”

The average value of an acre of Iowa farmland is $6,708, which is an all-time high. The top driver of the higher farmland values according to Duffy, is the increase in gross farm income brought on by higher corn and bean prices. He says there are a lot of secondary drivers too, including lower interest rates, and the fact that land is a relatively good investment.

“You know a lot of people were saying ‘if we sell the land, what are we going to do with it,’ and so they’re not seeing as much of a supply of land and yields, even though some parts of the state were not as good, we did have good yields (overall),” Duffy says.

Past history always raises the question of whether land prices could crash. “It’s one of the things that when we ask people in the survey to list negative factors, 31% indicated that land was too high and that were expressing concern that we may be on speculative bubble and that land values would really collapse,” he says.

Duffy has some encouragement though for those concerned about farmland going the way of home values. “My personal feeling is that we’re not on a speculative bubble, I do think there is a possibility for corrections though, we saw a little correction in 2009. That to me is a good sign in that it shows there is still discipline in the market,” Duffy explains. “Right now these levels of increases that we’ve seen, even though they are very high, there’s a lot of fundamentals backing them.”

Some land in Sioux County sold last week for $20,000 dollars an acre — but Duffy doesn’t believe that’s an indicator that overall prices are going to go rapidly higher. “It think we have to always remember the $20,000 and the $16,000 plus are auction sales, and a lot depends on if you have two people going head to head and want it, then the (land) prices go higher,” Duffy says.

He says he thought the prices in his survey are a little higher than he expected, but not totally out of line. You can see maps showing the 2011 farmland values and additional information on the I.S.U. Extension website: www.extension.iastate.edu/topic/landvalue

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