Iowa Unemployment Reaches 20-Year High Print
Commentary/Politics - Iowa Politics
Written by Lynn Campbell   
Friday, 13 March 2009 16:06

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.

Elisabeth Buck"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.

Iowa's situation was still better than things nationally. The U.S. jobless rate rose to 7.6 percent in January from 7.2 percent in December. This was the highest national unemployment rate since the fall of 1992, when 11.6 million people were out of work.

"Today's announcement only fuels the need for our state's leaders to move quickly on putting federal recovery money to work in our state," said Iowa Policy Project Executive Director David Osterberg. "As more hard-pressed working families need services from the state in such a serious economic crunch, we need to make sure we're giving those stimulus funds from the federal government a chance to do what they're supposed to do: pick up our economy, and meet Iowans' needs."

After the unemployment report, the Iowa House gave final legislative approval to a bill modernizing unemployment-insurance practices in the state by a vote of 84-13. With the Senate having already passed an identical version of the bill, Governor's Chet Culver's signature would effectively guarantee $71 million in federal stimulus money for the state's unemployment-insurance program.

Governor Unveils Details of $750-Million Bonding Plan

Culver on Thursday unveiled details of his $750-million, three-year bonding plan called "I-JOBS" and argued that it's a way to create 21,000 jobs, improve infrastructure, and strengthen the economy.

Under the plan, the state would use $56 million a year in gambling revenue to pay back 20-year bonds. Here's how the money would be spent:

  • $250 million for transportation projects, roads, and bridges;
  • $175 million for projects already scheduled, including those at the Iowa Veterans Home and community colleges;
  • $150 million for public buildings and disaster relief;
  • $100 million for water-quality and wastewater-improvement projects; and
  • $75 million for local infrastructure, broadband technology, and alternative energy.

"It's practical. It makes sense. It's a jobs initiative," Culver said. "This will create jobs, jobs, jobs in every county of our state. That's really what this is about. I am extremely concerned about the economic challenges that our state is faced with. It really bothers me that we have 70,000 families that are collecting unemployment. Those families are counting on all of us to provide solutions, to provide them some hope, to help them get a job."

Culver said his plan doesn't raise taxes. He pointed to the state's triple-A bond rating and said Iowa ranks 48th in the nation in debt load, and would still be ranked 48th even if it tripled its debt load by bonding for infrastructure projects. "We want to turn dirt as quickly as we can," he said. "I'll be touring the state with my shovel."

House Speaker Pat Murphy said he thinks the Iowa House has enough votes to bond for $175 million to pay for already scheduled projects such as the one at the Iowa Veterans Home, and it's possible to do something more for disaster relief. But he said getting the votes to bond for roads and bridges as proposed by the governor will be more difficult.

"It's an uphill climb," said Murphy (D-Dubuque), explaining that some legislators still prefer the gas tax to pay for roads and bridges. "Whenever you bond for roads or bridges ... you start cycles within the construction industry. When you do bonding, you'll have a two- or three-year surge in construction. And if you don't have as much in bonds, you have a huge drop-off. Whereas with the gas tax, you have a constant revenue source that's rolling in there. It tends to be fairly consistent."

Republicans are adamantly opposed to bonding this year in general, whether it's for $175 million or $750 million.

"I think it shows the clear distinctions in that Iowans are trying to keep their head above water in this economy," said Senate Minority Leader Paul McKinley (R-Chariton). "The Republicans would like to throw them a life raft in the form of sustainable jobs, and the Democrats are throwing them anchors in the form of piling on more debt by borrowing on the credit card. That's what got us into this mess, and it's what will keep us in this mess. You cannot borrow and spend your way out of a poor economy."

One day after announcing details of his $750-million I-JOBS plan to bond for infrastructure, Culver on Friday kicked off the statewide "Shovel Ready" Tour with an event in Des Moines to highlight transit projects that could benefit from his proposed initiative. That event was scheduled to be followed in the days ahead with stops in northern and eastern Iowa by the governor, and stops in western Iowa by Lieutenant Governor Patty Judge.

Increase in Gas Tax Taken Off the Table

The legislative proposal to increase the state's gas tax by 8 cents a gallon is dead for the year, Senate Transportation Chair Tom Rielly, one of the chief proponents of the proposal, said minutes after Culver declared at a public meeting that he would veto the bill.

"I have tried to be extremely clear about my opposition to increasing the gas tax at this time," Culver said. "I will veto an increase in the gas tax. ... During an economic recession which is unmatched in its scope, this is not the time to raise taxes on hardworking Iowans that are already struggling to pay their utility bill, their food bill, their mortgage payment. I don't know how much more clear I need to be, but I will not sign an increase in the gas tax."

Culver's statement came as the House and Senate transportation committees appeared poised to approve a gas-tax increase. Culver said Iowa just received $360 million from the federal stimulus and could generate another $250 million from a state bonding plan for roads and bridges.

Thus ends a months-long stalemate between Culver, who has repeatedly told reporters that a recession is not the time to increase taxes, and lawmakers, who continued to pursue the idea while explaining that Culver never said the words "no" or "veto" until now.

After hearing the final word from the governor, Rielly admitted: "To be honest with you, I have the same concerns. People are really hurting right now. I don't know if this is the time to do it or not."

Iowa motorists now pay a tax of 19 cents a gallon for ethanol-blended gasoline and 21 cents a gallon for regular gasoline. An 8-cent increase would have cost an average Iowan about $40 a year. The state hasn't raised the tax since 1989.

House Minority Leader Kraig Paulsen (R-Hiawatha), said he's pleased that the governor said he's ready to start vetoing tax increases.

"As the governor says, there could not be a worse time to raise taxes on hardworking Iowans than during this time of economic downturn," Paulsen said. "This is why I would urge the governor to also publicly take removing Iowa's federal deductibility off the table as well. Repealing federal deductibility would result in another significant tax increase on the backs of Iowans."

"Choice of Doctor" Bill Advances

Iowa businesses argued that the "choice of doctor" bill would cost businesses $120 million and workers' compensation rates would increase 12 to 15 percent, while labor unions argued that workers deserve to have a say in their care because a workplace injury affects other parts of their lives.

"Our 1,400 members are in opposition to this bill," said John Gilliland of the Iowa Association of Business & Industry. "I was at a workers' compensation seminar put on by our organization last week. I asked this question of the audience, and it was 100 percent in opposition to this."

House File 530, which would give the employee rather than the employer the right to chose a doctor who's a primary-care provider if the worker is injured on the job, moved this week from subcommittee to public hearing to committee passage. Debate of the bill initially scheduled for Friday was postponed.

Representative Rick Olson (D-Des Moines), chair of the "choice of doctor" subcommittee and the House Labor Committee, repeatedly interjected that the current bill is not pure employee choice -- it only allows workers to predesignate a primary-care physician.

"I didn't want pure employee choice because I thought I would get so much pushback from the lobby that it would be unbearable," said Olson, who also led debate on the prevailing-wage bill last month, which fell one vote short of passage.

Janice Laue of the Iowa Federation of Labor, AFL-CIO, argued that Iowa is one of only nine states in the nation that has the employer pick the doctor for injured employees when there is a workers' compensation claim.

"The reason we support this is because we are having lots and lots of problems, more and more stories of people who are not getting quality care, who are getting their care delayed," Laue said.

Myron Linn, the workers' compensation manager of the Pella Corporation, said giving employees their choice of doctor will lead to a 12 to 15 percent increase in worker-compensation rates; a $120-million cost to employers; $20,000 in increased premiums to the Pella school board; and a $10-million to $15-million loss of revenue to the state of Iowa, largely due to loss of taxable corporate income.

But Laue said there's more to cost than just dollar bills.

"There is a cost to the lives of these people that are involved," she said. "You work 40 hours a week, what about all the rest of your life when you go back home, play with your kids? Do things for recreation? Go to church, whatever? All of the rest of your life is impacted. So it's just not what the employer pays in terms of dollars. That individual suffers in terms of the rest of their lives, and they deserve to have some say-so in what their physical well being is going to be."

Scott Weiser of the 3M Corporation said companies such as his that are currently providing on-site medical care probably would no longer do so if this bill were to pass. "That option's probably gone," he said.

Later in the week, Olson dismissed the possibility that Democrats may not have the necessary 51 votes to pass the bill. "I'm not bringing it to the floor on Friday because there was consensus there are some other things that need to be done this week, and we have to caucus on this," he said.

House Majority Leader Kevin McCarthy (D-Des Moines), said there hasn't been a vote count taken on the bill yet, and denied that Democrats are short of the votes needed for passing the second of four priority labor bills.

It's not likely that Democrats would debate the bill on the House floor unless they believe they have the 51 votes for passage. Last month, the prevailing-wage bill fell one vote short of passage after Representative McKinley Bailey (D-Webster City), changed his mind on the bill following defeat of his amendment.

Bills on Cell-Phone Use Among Hundreds Claimed by Funnel

Bills that would have prohibited Iowa motorists from driving while using cell phones and prohibited students from using cell phones during school hours are among hundreds that didn't make it this week. Also dead for the session are bills that would have legalized medical marijuana, capped payday loans at 36 percent, and increased the gas tax.

Representative Ako Abdul-Samad (D-Des Moines) had talked about how dangerous it can be when motorists get distracted by talking or texting on their cell phones while driving. The proposal drew a lot of interest, and Abdul-Samad had hoped his bill, House File 9, would still get out of committee this week.

But the legislation wasn't getting enough backers this year. "It's not gelling," said Representative Brian Quirk (D-New Hampton), chair of the House Transportation Committee. "It's just not getting bipartisan support."

Another bill dealing with cell phones - House File 371, which would have required school boards to establish a policy for students that prohibits the use of cell phones and other electronic communication devices during school hours - was advocated this year by Representative Deborah Berry (D-Waterloo).

But Representative Roger Wendt, a retired teacher and principal who's chair of the House Education Committee, said that the bill is not necessary and that he did not hear a thing from constituents on the issue.

"We're not running Berry's bill," said Wendt (D-Sioux City). "They have the ability to control that at the local level. ... They can do this. That's micromanaging at its utmost. That's a fundamental thing in a school district that you establish with the board of education. If the board says they can have cell phones, you live with that. But I don't think any of them would."

This week was the Iowa Legislature's official first "funnel," when all bills had to clear at least one committee to be considered alive for the remainder of the session. Budget and tax-writing bills are not included in the deadline, and any issue can resurface through a leadership bill or amendment.

More than 50 bills were up for committee debate on some days this week as lawmakers rushed to meet the funnel deadline. But with legislative leaders eying an early adjournment - Senate Majority Leader Mike Gronstal said he hopes to adjourn soon after the Revenue Estimating Conference meets next Friday to adjust its estimates of state revenues - most priority bills were approved early this year.

"We told our members that we expected them to have their bills out by at least last week," said House Speaker Murphy. "We had most of our priorities out last week or the week before."

Among those squeaking through in advance of Friday's deadline were bills to study school reorganization, regulate livestock manure on frozen ground, license day-care homes, allocate another $100 million for flood relief, and make it a crime for parents to knowingly expose their kids to pornography.

Democrats also took quick action on labor bills this week, moving the "choice of doctor" bill through committee, along with two other bills: one that would prohibit employers from infringing on employees' political activities after work hours, and another that would award additional workers compensation to those whose benefits were unreasonably denied, delayed, or terminated.

In addition, lawmakers advanced bills that would create mental-health parity and would require health insurance coverage for diabetes self-management and certain cancer treatments.

Other bills are in a gray area. A bill to establish motor-vehicle-emission standards survived but was changed dramatically to a bill that would study the issue. A bill increasing hunting and fishing fees also cleared a committee, but only after controversial resident fees were stripped out of the bill. And a bicycle bill has been approved by the Iowa Senate, but the chair of the House Transportation Committee has concerns with the bill and its impact on rural Iowa, so it's not likely to advance down the road.

Two labor bills didn't technically clear committee, but that won't stop Democratic leaders from bringing the bills forward if a compromise can be reached and if they have the 51 votes.

A bill that would have nonunion workers pay their "fair share" for union services could be introduced later as a leadership bill, Democratic leaders said Thursday. Meanwhile, House Study Bill 269, a noncontroversial collective-bargaining bill, was approved 10-7 Thursday by the House Labor Committee and can be used as the vehicle to bring forward a more controversial expansion of collective bargaining.

"I thought we were going to sneak that by," joked Murphy (D-Dubuque). "We are looking at all four labor bills. We are going to do a cleanup bill for Chapter 20, but we may also - and it's germane to that subject matter - debate opening the scope of collective bargaining in that bill."

Iowa Veterans Home Commandant Not Reappointed

Dan Steen will not be re-appointed as commandant of the Iowa Veterans Home, Culver announced amid disclosures that a new policy at the home cut overnight physician staffing while significantly increasing the pay of a four salaried doctors, including the home's medical director. Steen's current four-year term ends May 1.

"I am considering changes and improvements to how state government is organized to better meet the needs of our veterans," Culver said. "Those changes will mean new leadership at the Iowa Veterans Home, and I look forward to working with the legislature and the veterans' community on this issue."

Attorney General Undergoes Prostate-Cancer Surgery

Iowa Attorney General Tom Miller underwent successful surgery this week for an early stage of prostate cancer at Iowa Methodist Hospital. Dr. Steven Rosenberg, who performed the surgery, has told Miller that he expects a full recovery.

"I was lucky to have found this early, while it can be readily treated," Miller said in a news release. He urged Iowans to talk with their physicians about testing for prostate cancer. "Since there are no warning signs of early prostate cancer, it is important for men to talk with their physicians to make sure appropriate testing is part of their annual physical."

Miller's office said the attorney general expects to spend several weeks in recovery before returning to his normal schedule.

This weekly summary comes from, an online government and politics news service. staff contributed to this report.

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