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Yahoo
11-03-2025
- Business
- Yahoo
Senate GOP bill adds surcharge on some businesses as they move to cut unemployment taxes
Senate Republicans are advancing Gov. Kim Reynolds' unemployment tax cut proposal ― with a twist. The governor's bill, Senate File 504, would result in a nearly $1 billion unemployment tax cut for businesses. It would cut in half the amount of wages on which businesses pay unemployment taxes, as well as lower the maximum unemployment tax rate from 7% to 5.4% and reduce the number of tax tables. Businesses in Iowa currently pay taxes on two-thirds of the average statewide wage, or about $39,500. The bill would cut that to one-third, or closer to $19,500. Republicans on the Senate Workforce Committee amended the bill last week to add a 10% surcharge for companies whose employees withdraw more than 25% from the unemployment trust fund than the company contributes over a three-year period. On Tuesday, the Senate Ways and Means Committee advanced the bill on a party line vote, meaning the measure is now eligible for a vote by the full Senate. More: Iowa lawmakers introduced 1,500+ bills this session. Which survived the 'funnel' deadline? Molly Severn, Reynolds' deputy chief of staff and legislative liaison, told senators Tuesday at a subcommittee on the bill that "the governor's original proposal before the surcharge amendment was added in the Senate Workforce Committee is the proposal the governor's office is supportive of." According to the governor's office, 7,469 businesses in Iowa would be subject to the 10% surcharge if the Senate version of the bill passes. The majority of those businesses are small or medium-sized, the governor's office said. The surcharge would bring in an estimated $2.9 million for the state's unemployment trust fund. Severn said the surcharge could also hurt Iowa in its national ranking from groups such as the Tax Foundation, which track tax system competitiveness. "States with a surcharge are negatively impacted in their ranking by the Tax Foundation, no matter the purpose of that surcharge," she said. Sen. Adrian Dickey, R-Packwood, who chairs the Senate Workforce Committee, said the surcharge would only affect employers whose business model involves seasonal layoffs, since those companies' employees receive more in unemployment benefits than the company pays into the trust fund in taxes. "This means that if a business simply had a bad year, the surcharge would not affect them," Dickey said. "With the three-year average provision, the only businesses that would be subject to the surcharge are businesses that are using the unemployment system to subsidize their labor expense on the backs of 92% of the other businesses in Iowa." Tim Goodwin, a lobbyist for Iowa Workforce Development, said Tuesday that the governor's original bill could be implemented beginning Jan. 1, 2026. But adding the surcharge included in the Senate version would delay the tax cuts until 2027. More: Iowa GOP unveils sprawling property tax 'reboot' with $426M cut, $25K homestead exemptions At the subcommittee on Tuesday morning, representatives of several business groups in Iowa said they were still working through the implications of the surcharge language. Dustin Miller, executive director of the Iowa Chamber Alliance, said his group supports the bill but he asked senators to think about how the surcharge would affect Iowa's competitiveness. "From a competitive standpoint, when you're trying to land large-scale prospects no one single thing typically knocks you out of contention but being noncompetitive in certain things is important in that full checklist," he said. "So that would be something also to also consider on that surcharge. Does that make us an outlier?" Other groups said they were supportive of the bill. "We really appreciate the legislature and the governor for working on policies that make our state more competitive for businesses," said Ryan Moon, director of government relations and public policy at the Greater Des Moines Partnership. Iowa's unemployment trust fund had more than $1.8 billion in it as of Jan. 1, 2024, ranking Iowa ninth in the country for unemployment trust fund balance, ahead of more populous states. Democrats pointed out that Reynolds used $727 million in federal COVID relief funds and American Rescue Plan Act money to prop up the trust fund during the COVID-19 pandemic. Sen. Tom Townsend, D-Dubuque, said he's concerned about whether the cuts will be sustainable if the economy worsens. "The economy's been pretty good in the state of Iowa for the last several years, contributing to this fund going up," he said. "I'm concerned if there gets to be a huge economic slowdown and that fund starts to crash, then how do we make sure that it's sustainable? Do we increase the insurance premium on businesses at the time when they're hurting the most or do we turn around and cut benefits again?" Stephen Gruber-Miller covers the Iowa Statehouse and politics for the Register. He can be reached by email at sgrubermil@ or by phone at 515-284-8169. Follow him on X at @sgrubermiller. This article originally appeared on Des Moines Register: Reynolds, Senate GOP differ on surcharge in unemployment tax cut bill
Yahoo
11-03-2025
- Business
- Yahoo
Senate committee moves bill to exempt overtime pay from income tax
Mar. 10—dbeard @ MORGANTOWN — Following the lead of President Trump, state senators are considering a bill to exempt overtime pay from personal income tax. The Senate Workforce Committee OK'd SB 6010 on Monday and sent it to Senate Finance. The exemption would begin in the 2026 tax year. A Tax & Revenue Department fiscal note with the bill estimates tax revenue loss ranging from $70 million to $100 million. Deputy Revenue Secretary Mark Muchow told the committee that Alabama was the first state to try this, with a temporary exemption set to run from January 2024 through June of this year. Alabama had to modify the exemption after actual looses far exceeded the estimates. News reports from Alabama say the fiscal note with its original bill estimated a loss of $45 million, and supporters foresaw the loss to be made up through increased consumer spending. Muchow said that after nine months, Alabama's revenue loss topped $230 million, so the law was amended to only apply to workers covered by the Fair Labor Standards Act. The FLSA, according to the U.S. Department of Labor, "establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in federal, state, and local governments." If Congress passes a federal overtime exemption law, Muchow said, the Legislature would need to update state code next year to conform to the federal one. The legislature annually passes legislation to conform state code to federal code. Sen. Scott Fuller, R-Wayne, raised the issue of workers who receive comp time off instead of overtime and asked Muchow what would happen in those instances. Muchow said that's one factor that could raise the cost of the bill, along with salaried workers who press their employers to switch them to hourly, and workers who press their employers for more overtime. Two issues not discussed in committee were the $400 million revenue shortfall projected by the governor for next fiscal year, and a House bill — HB 2139 — to exclude income from tips from personal income tax. That bill is sitting in House Finance and is estimated to cost the state about $5 million.
Yahoo
04-03-2025
- Business
- Yahoo
Iowa Senate advances bill that would cut $1 billion in unemployment taxes for businesses
Businesses would receive a nearly $1 billion tax cut on the money they pay into Iowa's unemployment trust fund, under a proposal from Gov. Kim Reynolds that is advancing in the Iowa Legislature. The measure — which Reynolds called on lawmakers to pass in her Condition of the State address in January — would cut in half the amount of wages on which businesses pay unemployment taxes, as well as lower the maximum unemployment tax rate from 7% to 5.4% and reduce the number of tax tables. Those taxes flow into Iowa's unemployment trust fund, which pays unemployment benefits to workers when they are laid off. Reynolds has said Iowa collects too much in unemployment taxes from Iowa businesses, which makes it an outlier from surrounding states. "Our unemployment trust fund is full," she said in the address. "In fact, we have more than we need. Our nearly $2 billion trust fund is the ninth-highest in the country, even though we're 32nd for population. Clearly, we're over-collecting." More: Kim Reynolds wants a big unemployment tax cut for businesses. Here's how Iowa stacks up: The Senate Workforce Committee voted Monday to advance Senate Study Bill 1173. Sen. Adrian Dickey, R-Packwood, said the bill will leave enough money in Iowa's $1.8 billion unemployment trust fund to pay unemployment benefits in the event of an economic downturn. "In Iowa, we are the 13th most generous state as far as weekly benefits," he said. "We treat our workers very fair, but we should always, always aspire for our citizens to aspire for more than a weekly unemployment benefit check." Sen. Zach Wahls, D-Coralville, opposed the bill. He said he wanted to ensure that the state would still have enough money to pay the benefits that "families are going to depend on when a bad time hits." "I worry that the changes that are proposed in this bill will not necessarily deplete the trust fund in a year or two years," he said, "but will, unfortunately, put us on a trajectory where the trust fund could be depleted and where you would actually have to raise taxes on employers, potentially during times when things are in a deteriorating economic position." Sen. Tom Townsend, D-Dubuque, criticized changes Iowa has made to its unemployment system in recent years, including a 2022 law that cut the maximum number of weeks Iowans can receive benefits from 26 weeks to 16. "As someone who lives in a border community, I know several construction workers that are working in Illinois or Wisconsin right now because they can get more unemployment for longer," Townsend said. "We've made it almost impossible to file for unemployment. It's miserable." Townsend said he disagrees with the idea of looking at Iowa's unemployment trust fund as a tax cut. "This is an insurance policy," he said. "This is to help someone when they're at their worst time. And we need to make it easier for people to get it, not harder." The bill says that any savings an employer receives as a result of the tax cut must either be used to pay for employee salaries and benefits or as an alternative to unemployment benefits during seasonal layoffs. Senators amended the bill to include a 10% surcharge for companies whose employees withdraw more than 25% from the unemployment trust fund than the company contributes over a three-year period. "Everybody's subject to it, but it's probably going to pertain more to a seasonal employer who uses the unemployment system as part of their business model," Dickey said. Iowa had more than $1.8 billion in its unemployment trust fund as of Jan. 1, 2024, according to data from the U.S. Department of Labor. That ranks Iowa ninth in the country nationally for unemployment trust fund balance, ahead of more populous states. As of January 2024, Iowa taxed businesses on about $38,200 of an employee's wages. That ranks Iowa 12th in the country for its taxable wage base for unemployment insurance. Reynolds' proposal would cut that number in half, meaning Iowa would tax businesses on about $19,000 of an employee's wages. Currently, Iowa's wage base is the second-highest among its surrounding states, second to Minnesota ($42,000). "If I'm able to get this bill passed and cut the taxable rate in half, we're still second," Reynolds told the Des Moines Register in January. "So we're still above Nebraska and Missouri and Kansas and Illinois." Iowa would still tax more wages than South Dakota ($15,000), Wisconsin ($14,000), Kansas ($14,000), Illinois ($13,590), Missouri ($10,000), Michigan ($9,500) and Nebraska ($9,000). The governor's proposal would also lower the top rate paid by employers from 7% to 5.4%, reducing both the tax itself and the base they pay the taxes on. Stephen Gruber-Miller covers the Iowa Statehouse and politics for the Register. He can be reached by email at sgrubermil@ or by phone at 515-284-8169. Follow him on X at @sgrubermiller. This article originally appeared on Des Moines Register: Iowa Senate advances bill with $1B unemployment tax cut for businesses
Yahoo
28-02-2025
- Politics
- Yahoo
WV Senate passes bill repealing work permit for 14- and 15-year-olds, bill now moves to House
Senate Workforce Committee Chair Sen. Rollan Roberts, R-Raleigh, addresses the Senate on Friday, Feb. 28, 2025 in Charleston, Senators unanimously passed a bill that would exempt 14- and 15-year-olds from needing a work permit to seek employment. (Will Price | West Virginia Legislative Photography) A bill advancing in the West Virginia Legislature would allow 14- and 15-year-olds to work without first obtaining a work permit. The Senate unanimously passed Senate Bill 427 Friday. Currently, state law requires 14- and 15-year-olds who want to work to get a permit from their school superintendent. The permit includes age certification, a commitment by the employer to employ the child legally, a description of the work the child is applying to do, a signature by the child's principal saying that they're attending school, and parental consent. If SB 427 becomes law, employers seeking to hire the teenagers would be required to obtain an age certificate verifying the child's age from the state Division of Labor and the written consent of the child's parent or guardian. The bill would not change the law that prohibits children under 18 from working in certain dangerous jobs, such as logging or demolition, according to Senate Workforce Committee Chair Sen. Rollan Roberts, R-Raleigh. 'Overall, the bill would make it easier for teenagers seeking job opportunities in the state to begin learning valuable skills,' Roberts said. The House of Delegates passed a similar bill last year, but the bill did not make it through the Senate. Opponents of the legislation argued that repealing the work permit process could leave some children open to exploitation by their parents. The bill will next go to the House of Delegates for consideration. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Yahoo
18-02-2025
- Politics
- Yahoo
WV Senate Workforce Committee advances bill expanding work requirements of food stamp recipients
Members of the state Senate Workforce Committee met Monday, Feb. 17, 2025, and advanced a bill that expands work requirements for SNAP recipients in West Virginia. (Will Price | West Virginia Legislative Photography) The Senate Workforce Committee on Monday advanced legislation that would expand the work requirements for West Virginians who receive benefits through the Supplemental Nutrition Assistance Program, commonly known as food stamps. The bill would mandate participation in a SNAP employment and training program for able-bodied adults up to age 59 unless they meet a qualification for exemption. The programs are currently voluntary. Under the bill, exemptions include caring for a child under age 6 or an incapacitated adult, going to school at least part time, being employed at least 30 hours a week and participating in a drug or alcohol treatment program, among other things. With some exceptions, the federal government requires able-bodied recipients ages 18 to 54 to meet work and training requirements in order to receive SNAP longer than three months within three years. If the bill passes, SNAP recipients would be required to work at least 20 hours a week or be subject to a time limit on SNAP of three months within three years, and work 30 hours a week to be exempt from the state's SNAP Employment & Training (SNAP E&T) participation requirements, an attorney for the committee explained. The bill would allow the state Department of Human Services to exempt up to 20% of individuals from the SNAP E&T program work based on challenges that the person would experience complying with the requirements. The Senate passed the legislation during the 2024 legislative session, but the House did not adopt it. Sen. Rollan Roberts, R-Raleigh, told West Virginia Watch late last year he planned to reintroduce the bill this session. During that interview, Roberts said the bill combines compassion with responsibility. 'I don't know what they're doing with their lives,' Roberts said. 'They're not volunteering, seeking vocational training, or they're not working. OK, so what are these able-bodied adults doing with no dependents? They are not contributing to society in a positive way, apparently, and are we sustaining that lifestyle? And does that lifestyle impact other negative consequences everywhere in society? I suspect that it does. It's anecdotal proof.' Jeremiah Samples, former deputy secretary for the state Department of Health and Human Resources, testified before the committee on behalf of the Opportunity Solutions Project, a partner organization to the Foundation for Government Accountability, a right-leaning organization that promotes work over welfare. 'The most simplistic way to describe this bill is that this expands those work requirements [from 54] up to age 59,' Samples said. 'Ultimately the reason that I have been involved with this issue for many years and that the FGA and the Opportunity Solutions project is involved is that work gives individuals dignity. Employment gives an individual community. 'We're talking about giving people hope and an opportunity to better their lives,' Samples said. 'In West Virginia, and you all know many of our statistics, we struggle with a lack of hope.' West Virginia has poor rankings for workforce participation, poor mental health days, drug overdoses, adults reporting poor health, diabetes, obesity, middle age death rate, foster care rates, grandparents raising grandchildren, Samples noted. 'The bottom line is that West Virginia is caught in a vicious cycle where individuals and communities, they do not have the resources available to them to get into the workforce, nor the expectation,' Samples said. 'A mandatory SNAP E&T program lays out an expectation as counsel laid out but it also provides individuals with resources.' Samples said the legislation would have a 'negligible' impact on the state's overall workforce participation rate. Caitlin Cook, director of advocacy and public policy for Mountaineer Food Bank, said the redundant work requirements in the bill would add stress to the state's charitable food network. The organization opposes the legislation, she said. Some states that have had a mandatory work and training program have changed their programs to voluntary because they did not meet their employment and self-sufficiency goals, she said. 'We know in those other states that have mandatory SNAP E&T programs, it's both increasing food insecurity as well as not achieving the intended outcome of the SNAP E&T program, which is to connect people with tools, resources and opportunities to achieve self-sufficiency, and in turn no longer need food assistance through SNAP or the charitable food network,' Cook said. Mandatory SNAP E&T programs also typically struggle to meet federal regulations and increase bureaucracy, she said. The bill will next be considered by the Senate Finance Committee. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
