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Iowa House lawmakers consider bill to reduce unemployment taxes

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(The Center Square) – An Iowa House subcommittee advanced a bill Thursday that would reduce the amount of money employers contribute to the state’s unemployment insurance fund.

House Study Bill 735 would reduce the number of tax rate tables from eight to four and slash the number of benefit ratio ranks from 21 to nine. Those figures determine how much unemployment tax businesses owe.

The bill drew opposition from several trade groups at a hearing.

“We know that the unemployment trust fund is strong right now, but that doesn’t necessarily mean it’s going to be strong and financed down the road if we were ever to have an economic downturn,” said Nick Laning, a lobbyist for the IBEW Iowa State Conference. “I know that the economy looks good from the outside right now, but we’re seeing some signs even in Iowa, we could have some issues. We just saw the Perry plant closure, we saw John Deere doing layoffs. We have some of these signs around the state that we have concerns on.”

Tyson Foods announced earlier this week that it would close its plant in Perry, affecting about 1,200 jobs.

The Legislature passed a bill in 2023 that cuts the maximum number of weeks for unemployment benefits from 26 to 16. Democrats have said Republicans should consider reversing that law in light of the Perry plant closing.

“I think that the Perry closing has been something of a wake-up call to us,” said Rep. Monica Kurth, D-Davenport, who said she would not support advancing the bill. “And I also agree that we have already taken away benefits. Why are we now planning to give the employers additional money back?”

The bill’s fiscal impact cannot be calculated until the bill is sent through committee, said Rep. Dave Deyoe, R-Nevada.

“I think there will probably be some time before you see this on the floor,” Deyoe said. “We don’t know if the math on this works or not. We haven’t gotten good numbers yet.”

Deyoe and Rep. Craig Johnson agreed to advance the bill to the Ways and Means Committee.

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