A coalition of businesses that employs 160-thousand Iowans is calling for a reduction in the taxes Iowa businesses pay into the state fund that pays out unemployment benefits.
Joe Murphy is president of the Iowa Business Council, which represents some of Iowa’s largest employers, including HyVee, Casey’s and John Deere. He raised the issue during an online hearing Governor Reynolds hosted. “While income tax reform continues to take place, we look forward to working with you and the General Assembly on other areas of competitive tax reform,” Murphy said, “…including Unemployment Tax Insurance, where Iowa ranks 33rd.”
Governor Reynolds used federal funding at the beginning of the pandemic to cover the large jump in jobless claims in 2020. In 2022, the governor signed a law that reduced the amount of time Iowans may receive unemployment benefits from 26 weeks to 10 weeks. J.D. Davis, a vice president for the Iowa Association of Business and Industry, said the Unemployment Trust Fund is stable and it’s time to consider changes.
“We are at a moment now, I believe, where we can look at the amount of premium going in each year, the amount of benefits going out each year,” Davis said, “how to make sure that insurance program is effective and that we can work to make it simplified.”
Governor Kim Reynolds proposed this business tax cut last January, but key lawmakers tabled the bill in March. They asked for an analysis showing that if unemployment rises during a recession, the Unemployment Trust Fund would remain solvent even if the taxes businesses pay into it is lowered.