Archive for the ‘Organization’ category

Why $15? Good reasons to consider it

August 12, 2015

There can be little question that Iowa’s minimum wage — like that of the nation — is too low.

At $7.25, it doesn’t come close to a living wage, yet the data show conclusively that in a significant share of households, income from a minimum-wage job is critical to the ability of a family to make ends meet. Plus, in Iowa it has stood at $7.25 since January 2008. An increase is long overdue.

Proposals for how much it should rise, however, are all over the map — literally. Not only do 29 states have wages at various levels higher than the federal minimum, but so do a growing number of cities. Even in Johnson County in Iowa, county officials are thinking of moving to $10.10 over the next 17 months.

In our new report, “The Case for a County Minimum Wage,” we look at the impacts on households of a $15 minimum wage in Johnson County and in Linn County. We find a benefit to over 43,000 workers.

Why $15? First, recognize that it is a conservative number. Had the wage been indexed to the growth in productivity since the late 1960s, it would be over $18 now. The graph below shows how the minimum wage, average wage, and productivity have changed from 1968 through 2014. The stark gap between both the minimum and average wages and the pace of productivity illustrates how income inequality has grown so rapidly — gains are not being shared with average or low-wage workers.

150810-minwage-Fig1

Basic RGBAnother reason to look at $15 is that it would be a significant step toward the wage needed for a basic-needs budget in many Iowa families. Our Cost of Living in Iowa analysis shows a married couple in Johnson or Linn County with one wage earner and one or two children needs a job paying $19 to $27 an hour just to pay for the basic costs of rent, utilities, food, child care, transportation, and health care. With two earners, each parent needs between $13 and $18 an hour. For a single parent, the budget math becomes more daunting, as child care costs must be paid out of a single paycheck. Now an hourly wage of $20 to $31 is needed.

Beyond the philosophical arguments about minimum wages, and speculation about whether a local minimum wage law will pass a court test in Iowa, these basic economic realities offer the context necessary to consider a minimum wage increase and to determine a meaningful level — whether adopted by a city, county, state or the U.S. Congress.

2010-PFw5464  Posted by Peter S. Fisher, Research Director of the Iowa Policy Project

REAP: Long on Promise, Short on Support

July 30, 2015

When Iowa’s Resource Enhancement and Protection program (REAP) was established in 1989, the Legislature set its spending authority at $30 million, but funded it at only half that — $15 million. The next year, funding (FY1991) was set at $20 million, an amount we thought was sustainable.

It never again reached that level — though lawmakers attempted to set it at $25 million for the 25th anniversary of the program in the just-completed fiscal year. Governor Branstad vetoed $9 million that year, leaving REAP at $16 million for FY2015, where it stands for FY2016 as well.

Ironically, the 2014 veto came as the state was promoting its voluntary Nutrient Reduction Strategy. Twenty percent of REAP goes to these programs. The veto reduced funds available to help farmers implement new nutrient runoff reduction and filtration measures that could contribute to the goals of the nutrient strategy. Actions like these contributed to a long-term REAP shortfall of more than $220 million.

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See our new Iowa Policy Project report, REAP: A Case Study of Stewardship. With a more clear understanding of how REAP can make a difference in our quality of life, all Iowans may evaluate how it should be funded. In practice, REAP is kept well short of the $20 million annual support that had been envisioned — a nearly 25-year trend that keeps REAP well short of its potential.

IPP-osterberg-75Posted by David Osterberg, IPP co-founder and environmental researcher

On big issues, Iowa leaders emerging locally

July 23, 2015

If state leaders won’t lead, local leaders in Iowa are showing they will take up the job.

On three big issues in the last several months, we have seen this:

I don’t know about you, but I’m beginning to see a trend.

Public policy matters in Iowans’ lives, in critical ways. We elect people who can take care of it in a way that works for all Iowans, but not enough who will. In the absence of state-level leadership, it’s inevitable, perhaps, that local officials who also are hired to work for their constituents will find a way to help them.

Owen-2013-57Posted by Mike Owen, Executive Director of the Iowa Policy Project

Big ‘Oops’ for tax-cutters in school vetoes

July 15, 2015

Governor Branstad’s vetoes of “one-time” funding pose “ongoing” and “recurring” problems for a major and ill-advised proposal by his allies to restructure personal income taxes in Iowa.

And they should.

During the last session, while lawmakers and the Governor were telling schools the state could not afford more than a 1.25 percent increase in per-pupil school aid, a group in the House was pushing a plan to let individuals choose a “flat” income tax rate option. In other words, figure your taxes under the current rate structure, then compare it to the flat rate, and choose which one costs you less.

It benefits primarily the wealthy, and it costs big money. There is no upside.

We have seen such a proposal in the past, and we are virtually guaranteed to see it again in some form in 2016. Not only does it compound fairness issues in Iowa’s tax structure, but it loses hundreds of millions of dollars in revenue, year after year, that Iowa legislators and the Governor have been telling us we cannot afford to lose.

Its supporters cannot avoid that contradiction, given their obsession this year about not letting a surplus — and a sustained one at that — be used for “ongoing” or “recurring” expenses on grounds they were not “sustainable.” Those are the grounds for the Governor’s vetoes of one-time funds for local schools, community colleges and state universities.

For good analysis of the 2015 alternative flat-tax proposal, which was not presented on the House floor as some of these messaging contradictions quickly became clear, see this Iowa Fiscal Partnership backgrounder by Peter Fisher. As Fisher noted, the projected revenue loss was projected at nearly half a billion dollars — $482 million — for the new fiscal year and around $400 million for each of the next three.

In short, the flat-tax idea is not “sustainable.” No need to discuss in the 2016 session.

Owen-2013-57Posted by Mike Owen, Executive Director of the Iowa Policy Project

Ongoing mistake in ‘one-time’ rhetoric

July 8, 2015

The Governor appears to be missing his own point.

Vetoing one-time funding for one-time uses — as Governor Branstad did last week — goes against what the Governor himself has been saying. And Iowa students will suffer for it.

Set aside for a moment that it can be quite sensible to use one-time funds for ongoing expenses. It depends on the circumstances. Set aside the fact that Iowa revenues and projections are strong and that state money seems to be available on an ongoing basis for corporate subsidies if not for restoring repeated shortfalls in education funding.

In the case at hand, the Governor vetoed one-time funds — for public schools, community colleges and the three regents universities — that ironically would have been spent in line with his own stated concern. The $55.7 million in one-time funds for local schools and area education agencies would have supplemented regular funding, set at 1.25 percent growth per pupil, all part of a package negotiated by the split-control Legislature.

Here’s the oft-stated concern about one-time funds, in a nutshell: You don’t spend one-time money on things that commit you to the same or greater spending in the future, because you don’t know whether the funds will be there later on.

The compromise on school funding negotiated and passed by legislators (part of HF666) reflected that concern:

  • For K-12 schools, the legislation specifies that funds “are intended to supplement, not supplant, existing school district funding for instructional expenditures.” It goes on to define “instructional expenditures” in such a way that assures the funds are for one-time uses that carry no additional commitment beyond the FY2016 budget year.

So, you can add to one-time expenses that you would have had to leave out, for purposes such as textbooks, library books, other instructional materials, transportation costs or educational initiatives to increase academic achievement. You can’t plan on having the same funds available in the following budget year.

  • For community colleges and the regents, each section of the bill included this stipulation: “Moneys appropriated in this section shall be used for purposes of nonrecurring expenses and not for operational purposes or ongoing expenses. For purposes of this section, ‘operational purposes’ means salary, support, administrative expenses, or other personnel-related costs.”

In his veto message, the Governor stated, “Funding ongoing expenses with one-time money is unsustainable.” In neither case did the Legislature propose doing so.

The larger problem with one-time funding is that such a cautious approach was unnecessary, because funds are available for more ongoing spending on education than what either the Governor or the House leadership permitted. The latest estimates are for 6 percent revenue growth in the coming year.

With or without the one-time funds that would have helped school districts, the legislative compromise ensures the continued erosion of the basic building block for school budgets, the per-pupil cost.

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Supplemental State Aid (formerly termed “allowable growth) defines the percentage growth in the cost per pupil used to determine local school district budgets, which are based on enrollment. For FY2016, the Legislature and Governor have set the growth figure at 1.25 percent. Though state law requires this figure to be set about 16 months before the start of the fiscal year, the issue was not resolved until last week, when the Governor signed the legislation, and the fiscal year had already begun. The Senate passed 4 percent growth for FY2017 and the House 2 percent, but no compromise emerged and that remains unsettled. The education funding vetoed last week by the Governor affects separate one-time spending that would not have affected future budgets.

For the last six budget years, per-pupil budget growth has been above 2 percent only once. Once it was zero, and schools for the coming year are at 1.25 percent. This does not come close to meeting the costs of education at the same level year after year.

Ultimately, that is the test of what is, or is not, sustainable.

Owen-2013-57Posted by Mike Owen, Executive Director of the Iowa Policy Project

 

See the Iowa Fiscal Partnership statement from July 2

New expectations on minimum wage

May 4, 2015

What, you won’t give us $10.10? OK, we’ll take $12.

Now, we’re talkin’!

At a time when progressive positions are compromised before they are given a chance to help the economy, boost family prosperity and lessen growing inequities, minimum-wage proponents have drawn the line at an unusual place in the sand: ahead of the one before.

It’s a bold stroke when the House and Senate leaders are against any increase in the current minimum of $7.25 an hour. The national minimum wage has been stuck there since July 2009 — and in Iowa even longer, since the state minimum rose and stopped there in January 2008.

Seven-plus years later, inflation has put minimum-wage workers in Iowa behind where they were in 2007 and 2008.

In 2013, Senator Tom Harkin of Iowa and Congressman George Miller of California teamed up to promote $10.10, calling $7.25 “unconscionably low.” But it has not happened.

Last week, Senator Patty Murray of Washington and Congressman Bobby Scott of Virginia introduced legislation to raise the minimum to $12 by 2020, in five steps. It also would eliminate the $2.13 tipped wage and index the new minimum to inflation.

Here’s an Iowa fact sheet, and here are reports from the Economic Policy Institute and National Employment Law Project.

150428-MWgraphic12

For some a $12 minimum wage will still sound too low. For some it will sound too high — which is why the debate retreated to $8.75 in Iowa this year, and that cannot even get a vote in the Iowa House.

Pushing the debate ahead to a place where it will affect more workers — 436,000 in Iowa, or 42 percent more than the 306,000 affected with a minimum at $10.10 — is where this needs to go. It may increase pressure to the point where we see more candidates taking a stand and votes taken in Washington and more state capitols.

Owen-2013-57Posted by Mike Owen, executive director of the Iowa Policy Project
Basic RGBThe Iowa Policy Project is a nonprofit, nonpartisan organization. IPP is a 501(c)3 organization and contributions to IPP are tax-deductible as permitted by law.

Budgeting in the dark

April 13, 2015

April 15 is more than Tax Day. It’s also Budget Day, the date by which Iowa school districts are required to certify and adopt their budget for the year starting July 1.

And that’s important, because Iowa schools consider themselves bound by law.

This stands in stark contrast to the General Assembly. The Legislature and Governor, you see, have not told the school districts yet how much money they will have for this budget that must be set by Wednesday. By law, they’re about 14 months late … and counting.

You read that right. Lawmakers were supposed to tell school districts in February 2014.

If schools were really getting the “first bite at the apple,” as some are so fond of saying, this number would have been set. Instead, schools are left wondering how much of the core of the apple will be left when legislators finally get their act together.

Those first bites are already gone — to backfill property-tax cuts, or to provide giant subsidies to multistate corporations that pay no income taxes to our state, or to let millions slip through corporate tax loopholes while our Legislature looks the other way.

The budget deadline is here, and schools don’t know how much they will be permitted to spend, how much of it will be state aid, or how much to levy in the property tax share of that budget.

How, then, do districts respond?

The safest approach for school districts is to assume the worst. This will differ around the state; for many, it means no increase in state aid or per-pupil budget growth.

Because budgets are a mix of state aid and property tax, and you’re assuming no state aid increase, you’ll be setting a levy at its highest amount. If state aid comes in higher, you will lower your levy to the authorized amount — but your overall budget may still be too low to meet the needs you have identified.

While these little tricks keep your district within the law, they do nothing for the spirit of transparency, to enable everyone to be part of the process.

  • District residents don’t really have a clear picture of what their levy will be, so what can they expect to learn, or say, at the required public hearing?
  • District teachers and board members trying to negotiate contracts in good faith through the winter and early spring have no firm numbers to discuss.
  • District administrators trying to plan for fall classes may not be sure whether they will be able to keep current staff levels, or be able to add staff to meet increases in enrollment, special needs, or demands for achievement in cutting-edge fields of study.

All we know as April 15 approaches is that districts, one way or another, will meet the letter of the law. No thanks to state legislators.

Owen-2013-57Posted by Mike Owen, Executive Director of the Iowa Policy Project
Editor’s Note: Mike Owen has been a member of the West Branch Community School Board since 2006.

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