The Iowa legislature's budget subcommittees worked this week to craft budgets for various areas of state government that would cut an average of 12 percent after state revenue estimates were lowered by $269.9 million next fiscal year, making layoffs almost a certainty.

Iowa Senate Majority Leader Mike Gronstal called the decline in state revenues "the worst I've ever seen" in 27 years in the legislature and said everything is at risk of being cut.

"I wouldn't say there's anything off the table," said Gronstal (D-Council Bluffs). "These are incredibly challenging times. ... We will do, probably in some cases, across-the-board stuff. We will also make selective cuts."

The River Cities' Reader asked Iowa state legislators from Scott County to answer two questions related to the national popular vote and the deductibility of federal income-tax payments. The deadline to respond was five days after the questions were sent out. All four Republicans responded. Of the five Democrats, only Representative Elesha Gayman responded.

More budget cuts are on the way in Iowa after the three-member Revenue Estimating Conference (REC) on Friday lowered estimates of state revenues by $129.7 million this fiscal year and $269.9 million next fiscal year.

"The economy continues to falter," said Holly Lyons, director of the Legislative Services Agency's fiscal services division. "We're witnessing more layoffs. We're witnessing reduced hours and furloughs. We may not even be halfway through this recession."

The lowered revenue estimates, combined with the $700-million budget gap the state already had for Fiscal Year 2010, make for a $1.1-billion gap between expenses and revenues over the next 15 months, according to Representative Scott Raecker (R-Urbandale), ranking member of the House Appropriations Committee.

The number of unemployed people in Iowa increased to 80,600 in January, surpassing the 80,000 mark for the first time since September 1987, Iowa Workforce Development announced this week. That's up from 73,700 in December, and 64,900 a year ago.

"Jobless claims remain very elevated, and continue to point to large payroll losses," said Elisabeth Buck, director of Iowa Workforce Development. "The major share of Iowa's job losses since January 2008 occurred during the final four months of the year."

The state's seasonally adjusted unemployment rate increased to 4.8 percent in January, up from December's revised rate of 4.4 percent and last year's rate of 3.9 percent. The total number of working Iowans dropped to 1,592,100 in January from 1,602,900 in December.

Officials with the Iowa Public Employees Retirement System (IPERS) attempted to ease concerns this week about its $339-million investment with Westridge Capital Management that's been frozen during the investigation of Westridge owners Paul Greenwood and Stephen Walsh for securities fraud.

Donna Mueller, IPERS' chief executive officer, told the legislature's joint Government Oversight Committee that the frozen assets represent just 2 percent of the pension fund that serves about 300,000 current and former employees in state government, cities, counties and school districts.

"We're going to aggressively pursue every last dollar," Mueller said. "We maintain an additional cash balance so that we do not have to unnecessarily cash out investments. We are managing cash so we have a cash reserve to pay monthly benefits. It's only 2 percent, so we have other assets that are available to manage and to pay benefits. A greater concern, almost, is what's happening in the economy and impacting the entire portfolio."