Grecia Palomar guides a group of drywall finishing apprentices at the Finishing Trades Institute of the Upper Midwest on March 23, 2023 in Little Canada, Minnesota. (Photo by Nicole Neri for the Minnesota Reformer)
Republicans supporting a bill passed Wednesday by the Iowa Senate said the measure addresses a specific concern with favoring unions in local contracts, but opponents argued it will prevent local entities from taking steps to ensure workforce safety through training requirements.
Senate File 603 initially largely dealt with eliminating the state’s taxable wage credit and changing the definition of “taxable wages” in Iowa Code. Under the bill, Iowa employers would not have to pay unemployment insurance taxes on the wages of out-of-state workers, if that state has a reciprocity agreement with Iowa.
The Legislative Services Agency reported these changes are expected to result in a $394,000 increase annually to the Unemployment Compensation Trust Fund due to the elimination of the taxable wage credit, and that three full-time positions administering the credit, paid for by federal funds, would be impacted.
The bill was amended by the House Tuesday to include a new section related to workforce training, making changes to the Registered Apprenticeship Act. State agencies and local governments would not be allowed to mandate requirements related to apprenticeship training for contractors, except when required by law. Cities, counties and school districts also would not be allowed to impose other additional “restrictions, qualifications, or requirements” on contractors, subcontractors, developers and apprentices.
Republicans supporting the measure said the proposal was added to the legislation as a way to address concerns about local entities — primarily, the city of Des Moines — considering adding a requirement related to contracts for private projects funded with tax increment financing (TIF) dollars. Rep. Bobby Kaufmann, R-Wilton, said Tuesday the measure will address attempts by local entities to favor contracts with certain entities, like unions or organizations that offer apprenticeship trainings.
“Belonging to a union is a great thing,” Kaufmann said. “Guess what? They can still bid on these contracts. They just can’t have a local entity — the city of Des Moines — decide that they’re a licensing entity. They’re not. They can still bid on these contracts. They just can’t have a local city — the city of Des Moines — thinking they’re the Legislature.”
But Democrats and some Republicans said the language would have much broader impacts. Sen. Charlie McClintock, R-Alburnett, introduced an amendment Wednesday removing the House’s changes, criticizing House Republicans for not running the measure as an independent bill. He said the language would put a significant burden on cities and counties as they make contracts.
“I was a mayor before I came here, years and years ago — nobody was complaining about this,” McClintock said. “I’ve not been approached by anyone to do this. I don’t think any of my colleagues have been approached by anyone to do this. I don’t see any urgency here to do this right now today, before we’ve had an opportunity to review this and make sure there’s not an issue.”
McClintock’s amendment was voted down 15-32. While supporters of the measure said the House language was specifically targeting the situation in Des Moines, several Democrats said the measure would have larger effects on local government’s ability to put restrictions in place that improve worker safety or efficiency.
Sen. Bill Dotzler, D-Waterloo, said the bill prevents efforts “protecting the public from people trying to do stuff on the cheap,” especially related to local governments giving preference for public contracts related to apprenticeship programs. He argued Republicans were attempting to make the bill about unions when the measure could have bigger impacts on ensuring workers for these projects are properly trained.
“This isn’t about union apprenticeships, it’s about apprenticeships, whether they’re non-union or union,” Dotzler said. “Why are we rushing through a bill, as Sen. McClintock said, where we haven’t had a chance to vet it properly? I think it’s because you heard the word union in there, and you’re against it.”
Sen. Thomas Townsend, D-Dubuque, said in his experience, many local governments’ restrictions are about “trying to keep local workers on those jobs.”
“Because a lot of these jobs, when you go totally with low bid, totally with all this other stuff, without any other type of protections in there — you drive past there, and there’s not hardly a license plate from Iowa on those jobs,” Townsend said. “So where is that money going? It’s not going into the state of Iowa. It’s going other places.”
Sen. Cindy Winckler, D-Davenport, added the measure could create conflicts with Iowa local governments seeking federal Community Development Block Grants, as these grants have wage requirements for developers that local governments would be unable to set under the bill.
Sen. Jason Schultz, R-Schleswig, floor manager for the bill, said the measure is “defending the status quo” rather than making changes to existing procedures as Democrats argued. He also said Iowa lawmakers will bring up a block grant bill later in the session that could address any concerns about conflicts with the workforce bill if needed.
“This is a vote to keep things the way they are,” Schultz said. “Iowa’s doing pretty well. Economy is growing, unemployment is lower than the national average, and all of Iowa’s workers deserve the opportunity to have their employers go out look to to bid for jobs and to compete on a level playing field.”
The legislation heads to the governor for final approval.