economy & budget

Amy Mayer/IPR file photo

President Donald Trump has sent a proposed budget to Congress that includes slashing $38 billion from farm bill programs, including crop insurance and nutrition supports, such as the Supplemental Nutrition Assistance Program (SNAP).

Iowa Republican Sen. Chuck Grassley says reducing crop insurance subsidies would leave taxpayers on the hook to pay for farm damages from natural disasters.

John Pemble/IPR file photo

Governor Branstad has submitted his revised budget to the state legislature, as lawmakers move toward considering a spending plan for the next fiscal year.  IPR Statehouse correspondent Joyce Russell told Clay Masters that the governor had to revise an earlier budget proposal after the Revenue Estimating Conference met in March and said the state would take in less money than expected.

Joyce Russell/IPR

Governor Branstad this week submitted his revised budget for next year as required by law, and his fellow Republicans in the legislature are concerned about how little wiggle room there is in the spending plan.

Because tax receipts have faltered, Branstad reduced his 2018 spending plan by more than two percent compared to what he submitted in January, and there’s no ending balance to provide a cushion for emergencies.     

Creighton University

A monthly index of the mid-America economy is at its highest point in nearly three years. The survey of supply managers in nine states indicates solid hiring in the manufacturing sector.

The Mid-America Business Conditions Index compiled by Creighton University economist Ernie Goss stands at a strong 60.5 for February. This is well above the growth neutral mark of 50. Goss says the reading for Iowa is even healthier at 62.6.

John Pemble/IPR

Governor Branstad delivered what will likely be his final Condition of the State Speech at the statehouse Tuesday, outlining plans to improve education, public safety, health care and water quality.   But he also unveiled a proposal to cut more than $100 million from this year’s state budget, which hits higher education the hardest.   Majority Republicans haven’t ruled out cutting some of the areas the governor would protect.     

The governor has never been known for his prowess as a public speaker, and he got off to a rocky start.

Amy Mayer/IPR file photo

With farmers coming off a third straight year of lower incomes, 2017 may require more belt-tightening for many.

Persistently low prices for major commodity crops including corn and soybeans may inch up slightly in the New Year. But farmers may find they still need to adjust their strategies to ride out the slump.

JIMMY CENTERS / OFFICE OF GOVERNOR TERRY BRANSTAD

Some spending reductions are to be expected in the upcoming budget, according to Gov. Terry Branstad. Due to lower revenue estimates, Iowa will likely have to cut about $100 million.

Despite this challenge, Branstad says he won’t consider an across-the-board cut.

"Instead I’m going to work with the legislature and make recommendations," says Branstad at his weekly news conference today. "I want to protect K-12 school aid from reductions, and property tax credits, I don’t want to see those reduced."

Joyce Russell/IPR

State lawmakers will have the tough job of cutting this year’s state budget when they convene in January, after new projections Monday from the Iowa Revenue Estimating Conference. 

The REC predicts that tax receipts will grow by 4.2 percent in the current fiscal year that ends June 30.

That’s $96 million less than earlier estimates.    

Department of Management Director Dave Roederer says to accommodate the shortfall, the governor will be recommending how to cut this year’s budget by roughly $100 million.

file: Luke Runyon/Harvest Public Media

The Great Recession decimated the American economy more than eight years ago. And while many of America's cities have crawled back to modest economic prosperity, the rural economy has stagnated, displaying few bright spots in employment and poverty rates.

In short: rural parts of the country are still struggling.

InfoCash / Flickr

Apple Pay, Google Wallet, Samsung Pay, Venmo -- the cutting-edge payment options of today are in our pockets, if not in our wallets. Before we had technological access to our bank accounts, there was a more rudimentary barrier to jump: getting money regardless of what bank or ATM was available. 

screenshot

Airbnb, a marketplace for people to list and rent vacation homes and rooms to stay, was founded in 2008 in San Francisco. Today, there are more than a million listings in more than 30,000 cities around the country. As the service grows in popularity in the state, cities in Iowa including Clear Lake, West Des Moines, Fairfield and Coralville are looking to regulate its use.

"There is a great demand for this type of service. It was founded as a means to accommodate people during large business conventions," explains Art Durnev, a professor of finance at the University of Iowa. 

Joyce Russell/IPR

Republican State Auditor Mary Mosiman warns that an $800 million state budget surplus has now fallen to about $80 million because of big property tax cuts and a new teacher leadership program.   

She warns against new multi-year commitments, now that state tax receipts have dwindled. 

Mosiman says when lawmakers passed the big programs, the state could afford them.

“It’s taxpayer money and we need to do something with it,” Mosiman says.  “So they put it to use with the multiyear commitments being education and property tax reform.” 

Amy Mayer/IPR file photo

Midwest farmers may be facing some of the toughest financial times they have experienced in three decades, largely thanks to low prices for some of the region's biggest crops.

The average net farm income for farmers in Kansas, for instance, plummeted in 2015 to just $4,568, according to a report released this week by the Kansas Farm Management Association (KFMA). The figure is less than 5 percent of the previous year's average of $128,731.

Kristi Koser for Harvest Public Media

At the grocery store, processed foods like cereal, crackers and candy usually maintain the same price for a long time, and inch up only gradually. Economists call these prices "sticky" because they don't move much even as some of the commodities that go into them do.

Take corn, for example, which can be a major food player as a grain, a starch or a sweetener.  

Corn prices can fluctuate widely, so why don't products containing corn also see price changes? Why does your cereal pretty much cost $3 per box every week?

It's partly thanks to the futures market.

Amy Mayer/IPR file

As farmers put their 2016 crops in the ground, they face another year of corn and soybean prices that will make turning a profit on the land challenging. Sen. Chuck Grassley (R-Iowa) says already he's seeing early signs of strain in the farm economy.

"We're hearing a little bit from bankers," he said. "We're hearing isolated instances of farmers [hurting]. We're hearing that the 800 number where farmers that are in trouble can call in and ask for help or get advice that they're getting a few more calls now."

Photo by Amy Mayer

Near Alexander, Iowa, on a cloudy spring Tuesday, Josh Nelson watches a bright red Case IH Magnum 340 tractor pull a 24-row planter and crest a small hill, dropping corn seed at careful intervals. Nelson says his family farm dodged a weather bullet this week, but it's just one of many hurdles this season promises.

 

Paul Townsend/Flickr

A group of Iowa’s business leaders reports a slowdown in the number of people they expect to hire. The decline in the Iowa Business Council's latest report is likely a result of global economic forces driving down exports.

The survey finds that 30 percent of the group’s CEOs and chairmen say they’ll likely hire in the next six months. That’s down from 45 percent in the group’s December survey.

IPR file photo by Amy Mayer

One of Iowa's U.S. Senators says he's surprised at how far the state's wind energy production has come. Iowa continues to lead the nation in wind energy, and Republican Sen. Chuck Grassley was among its early backers. This week the US Department of Energy reported Iowa generates more than 30 percent of its power from wind, the highest percentage in the country. Grassley says back in 1992 when he pushed for tax incentives for wind energy, he didn't expect it would get this big.

"I'm glad it is," Grassley says, "but I'm just telling you I didn't foresee that."

Photo by Grant Gerlock

There are mounting concerns about the direction of the farm economy. The U.S. Department of 

Agriculture expects farm income to fall for the third year in a row in 2016. At the same time, farmers are borrowing billions more from banks to get by.

The change in farm fortunes follows a drop in prices for corn and soybeans, the top Midwest crops. Supply and demand are both working against the commodity markets. Farmers have raised an oversupply of grain, while at the same time the slow global economy has brought down demand.

Don Graham/Flickr

Cuts to the crop insurance program will again be a talking point on Capitol Hill.

The budget drafted by President Obama and released Tuesday would make cuts to the crop insurance system, allocate more funds for agricultural research and fund the summer program that provides free meals to children.

IPR file photo by Amy Mayer

As Congress moves toward a budget deal, a $3 billion cut to crop insurance is now on the table. This comes after the money was approved as part of the 2014 farm bill, and the proposal is not sitting well with some Midwest senators. 

Sen. Chuck Grassley (R-Iowa) says in a party caucus Monday, he and Sen. Pat Roberts (R-Kansas) both expressed frustration over pulling more from farm programs. The current five-year farm bill, which includes crop insurance, other agricultural subsidies and many other programs like school nutrition and rural development, was passed early last year.

IPR file photo by Amy Mayer

Many farmers are going to lose money on this year's huge harvest because prices are lower than they have been.

Farm bill subsidy programs, which kick in when the average national price of a commodity drops below a certain price, will almost certainly be triggered this year for corn and soybeans. But it is not yet clear the extent to which those programs will help.

"It's going to help, but it's still not going to get the help above the cost of production," says Iowa Republican Senator Chuck Grassley. 

Photo by Frank Morris for Harvest Public Media

China's rapid industrialization and economic expansion over the past few decades has been a boon for U.S. farmers — especially soybean farmers. But China's economy is slowing down, leaving American farmers exposed to the downside of being tied to the world's second largest economy.

With tall stands of corn and green soybean fields stretching for miles, the river bottom land around Langdon, Mo., seems a long, long way from Beijing. In an economic sense, though, it's practically right next door. 

Iowa Public Radio / John Pemble

Iowa’s auditor of state says revenues for Iowa are strong and growing, but that there is also room for improvement. After completing her assessment of the state budget for fiscal year 2016, Mary Mosiman says it’s not wise to use carryover surplus money to create a balanced budget, as lawmakers have done this year.

Photo by John Pemble

The U.S. Congress is back at work with a lengthy agenda for a short month and the federal budget squarely in its sights. Iowa's senior senator, Republican Chuck Grassley, says the Waters of the U.S rule (WOTUS) is in the cross-hairs.

That rule, which extends Clean Water Act regulations to more bodies of water, went into effect in August, but only in states where courts hadn’t ruled to block it.

John Pemble / Iowa Public Radio

Economics teachers across the country use blackboards and chalk to teach people about supply and demand. The Planet Money team hands out candy to seventh graders.

Planet Money, a twice weekly podcast from NPR, sprung from an episode of This American Life that explained the subprime mortgage crisis. For the past six years, they’ve covered everything from the history of light to toxic assets, all to make the economy and finance more understandable to the average person.

kc7fys / Flickr

In the budget proposal he released last week, Governor Branstad quietly cut funding for two of Iowa's four mental health institutes.

Jason Parks

Finding a trustworthy and affordable child care provider is one of the biggest challenges working parents face. At the same time, providers are asked to do demanding and important work for little pay.

Unfortunately, there's no easy answer to that problem, says infant and toddler consultant Beth Walling.

"It's like trying to tackle poverty," she says.

Walling is especially concerned, since studies show there's an achievement gap that exists at 10 months of age.

"A 3-year-old’s vocabulary can predict their third grade reading level."

Premium Processing

Nov 11, 2014
IPR's Pat Blank

Central Iowa is about to get a much needed economic shot in the arm as a long awaited beef processing plant opens its doors providing hundreds of new jobs. 

John Pemble / Iowa Public Radio

Economics teachers across the country use blackboards and chalk to teach people about supply and demand. The Planet Money team hands out candy to seventh graders.

Pages