The ten-percent across-the-board cut in state government spending is having a big economic impact in the counties where Iowa’s three public universities are located. In Iowa City, Plumbers Supply Company CEO John Balmer says his business has definitely taken a hit from the belt-tightening at the University of Iowa.

“Since January, we’ve noticed a reduction of about 28-percent and in real dollars, that’s significant,” Balmer said. “The University of Iowa is our largest customer.” The universities have cut their spending on supplies and implemented pay freezes. Dean Hunzinker is a realtor and home builder in Ames. He says the market has softened, but he credits the overall economy more so than the cuts at Iowa State University.

Hunzinker says his company is much “leaner” than it was two years ago and is preparing for a potential boost from first-time homebuyers. “We have cut some positions and we’ve gotten very lean, if you will,” Hunzinker said. “In terms of our construction business, we are accelerating our spec housing market. We feel there’s going to be some demand between now and April 30 for spec houses and we’ll have these homes finished so that people can buy and occupy and get the tax credit.”

The University of Northern Iowa in one of the largest employers in Black Hawk County. Steven Dust is the President of the Greater Cedar Valley Alliance. “Anytime an institution the size of UNI in a metro area the size of Waterloo/Cedar Falls suffers that kind of a reduction in revenue hitting programs, centers of study and relatively high paid people on a university campus, it impacts us negatively,” Dust said. “Is it going to hurt us? Absolutely.”

Story, Johnson and Black Hawk Counties are usually insulated from economic downturns because of the universities. Charles Whiteman with the University of Iowa Institute for Economic Research says that insulation is much “thinner” this time around. However, he expects the university communities will bounce back.

“These are very vibrant economic activity centers and they will weather this storm,” Whiteman said. “Looking back on this from some point in the future, I don’t know that we’re going to be able to see much of the effects from this particular round of cuts in these communities.”