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(Des Moines, IA) -- Cuts to taxes on businesses which go towards Iowa's Unemployment Insurance Fund will survive this week's legislative funnel. Senate Study Bill 1173, which will be renumbered on its way to the Iowa Senate floor, is a proposal brought forth by Iowa Governor Kim Reynolds. She says the state has nearly $2 billion in the fund, so the proposal would chop the taxable wage base in half.
"We need to stop punishing our employers by requiring them to pay more tax than necessary," Reynolds says. "Instead, employers should keep and reinvest this money into their businesses, their workers and their communities."
Some opponents say the surplus is there due to one-time federal American Rescue Plan Act funding that was allocated towards it and not because the employers' money has filled it. They say the cuts could lead to problems in the event of a recession. State Sen. Zach Wahls (D-Coralville) is one of them.
"I share the agreement about wanting to make sure that when the economic situation deteriorates as eventually it will," Wahls says. "The economy goes in cycles. That we have a strong trust fund that can pay out the benefits that workers and the communities they live in are going to depend on."
Supporters say they've taken those concerns into consideration. State Sen. Adrian Dickey (R-Packwood) chairs the Senate Workforce Committee.
"Last year when this bill was introduced, that was the very first question I asked too," Dickey says. "Is this sustainable? Is this a short term thing? Long term thing? What if another COVID happened?...I think the number [Iowa Workforce Development] said that needed to be had was $800 million. That's not what was needed, but that was more than sufficient for what we just went through."
The bill is now eligible for the Iowa Senate floor and can still be amended.