State officials are worried Iowans will end up spending their federal “stimulus” checks to fill up their tanks if the price of gas reaches $4 a gallon. State budget director Dick Oshlo says hopefully the stimulus checks will be used to generate economic activity in the state by boosting retail spending or savings and investment.
There is reason to be optimistic about Iowa’s overall economy, according to Oshlo, but rising gas prices could wreak havoc. “Rising gas prices (eat) up disposable income for the average Iowa family and it makes it more difficult for small businesses to stay in business and make an attractive return on investment,” Oshlo says.
Iowa Department of Economic Development director Mike Tramontina says these dramatically rising gas prices are further proof the nation needs to invest far more in alternative sources of energy. “Gas prices at this level are an unmitigated disaster for the consumer. It’s very bad and it’s only been very bad for a relatively short period of time…but the forecast isn’t that it’s going to get any better,” Tramontina says.
Leisa Fox, the Iowa Association of Business and Industry’s vice president for membership, says A.B.I. members tell her they’re altering their delivery schedules. “They’re just being more responsible with their transportation dollars and that’s probably not a bad thing,” she says. “It’s good for the environment and it’s just making them more responsible with the fuel that they’re using.”
Jim Schipper, the president of American State Bank in Osceola, is the chairman of the Iowa Bankers Association Board of Directors. Schipper says the price of oil was a topic of discussion as his bank’s loan committee just met to review the bank’s portfolio. “It’s not unusual anymore for a community bank to be talking about the price of energy and oil and what OPEC is going to be charging for oil as it related to corn prices and agriculture in Iowa,” Schipper says.
Schipper and the others made their comments today during a forum organized by www.iowapolitics.com .