A bill that’s cleared an Iowa Senate subcommittee would cut taxes that businesses pay to cover unemployment benefits when people get laid off from their jobs.
Governor Reynolds says Iowa’s Unemployment Trust Fund has too much money in it and she wants to provide more tax relief. Reynolds, who made the same proposal last year, is asking lawmakers to lower the top unemployment tax rate and reduce the taxable wage base by half.
Ryan Sempf with the Quad Cities Chamber of Commerce told senators the bill is an opportunity to improve Iowa’s competitiveness with neighboring states. “This is one of the few places where we actually have an opportunity to really continue to move the needle on that,” he said, “so appreciate this bill and hope it moves forward this year.”
Peter Hird with the Iowa Federation of Labor said the bill won’t benefit working people. “In 2022, benefits for workers were cut, cutting the maximum number of weeks that they can collect from 26 to 16,” Hird said. “This bill basically is a result of those cuts, and it’s going to turn into savings for nearly a billion dollars for Iowa employers.”
The same bill stalled last year over concerns that the state might have to raise business taxes if there’s a recession and Iowa’s unemployment rate soars. This year a Senate Republican has proposed adding a surcharge on the bill for businesses that have seasonal layoffs, to cover the unemployment benefits workers from those businesses collect during the winter. An Iowa Workforce Development official says that would cause a one-year delay in implementing the tax cuts for businesses.
(Reporting by Katarina Sostaric, Iowa Public Radio)