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Iowa Governor’s Attempt to Shut Down 2/3s of the State’s Unemployment Offices Ruled Unconstitutional

Last year, Iowa Governor Terry Branstad decided to use a line item veto of Senate File 517 to redirect money away from state unemployment offices. Now, that decision has been ruled unconstitutional by the Iowa Supreme Court in a unanimous decision. The veto effectively cut the funding for 36 of the state’s 55 unemployment offices last summer. Governor Branstad decided to eliminate language that required the state to fund the same amount of unemployment offices as the previous year and reappropriated the money for a separate project, Iowa Workforce Development, that would have instead placed self-help kiosks in places like libraries and homeless shelters.

The closing of unemployment offices would have saved the state $6.5 million according to Branstad, but the Iowa Supreme Court ruled that the state’s constitution did not allow for a Governor to redirect money via line-item veto. Justice Thomas Waterman, who wrote the opinion, explained the ruling:

“Simply stated, the legislature appropriated funds to (Iowa Workforce Development) with strings attached and our constitution does not permit the governor to cut the strings and spend the money differently,”

After the veto last summer, the Iowa State Legislature came up with a bipartisan agreement to continue funding for a year. Now, as that year has passed, the debate will awaken with the two sides polarized even more. The initial response to the court’s ruling by Branstad’s administration was that the decision could lead to, “the closing of more state offices and the layoff of close to 200 workers.” Democrat Tim Albrecht labelled these threats, “a transparent act of retaliation” for losing the high-profile case.

On Monday, in his first public comment since the ruling, Branstad said that, “Legislature must act to restore workforce development funding, but shouldn’t try to reopen unemployment offices.”

In his weekly press conference, Branstad admitted there were some flaws in his original decision, but would not back down on trying to keep the unemployment offices closed.

“There’s a recognition that this basically knocked out funding for workers comp and I don’t think anybody wants to see that continue,” Branstad said. “They don’t want to see a disruption, so I’m very hopeful that in the next couple weeks this can all get resolved.”

he also added,

“The legislature should not attempt to provide funding or add language requiring the offices be reopened when they revisit the issue in the coming days,

Democrats are unlikely to bow to the Governor’s interest in seeing the issue disappear. On Friday, Democratic Senator Bill Dotzler, the chair of the Senate Economic Development Budget Subcommittee, suggested that the court’s decision means Iowa politicians must act quickly in order to keep program disruptions to a minimum:

The ruling calls for the legislature to take immediate action that he hopes can be resolved as early as next week so that the programs are not shutdown. It’s likely that the legislature will have to approve what is commonly known as a “supplemental appropriation.” Both Dotzler and Hunter want that to include money to reopen at least some of the unemployment offices, notably one in Ames that they both said was a critical hub of the system.

“This court cases really tosses the balls up in the air and there are a lot of them to juggle,” Dotzler, a member of the Senate Appropriations Committee, said.

Further, as the Des Moines Register points out, the court case is beginning to become an unwelcome expense for Iowa’s taxpayers:

The state’s Executive Council voted at the governor’s request in September to hire Nyemaster, Goode, West, Hansell & O’Brien law firm in Des Moines to represent Branstad in the lawsuit. Attorney Richard Sapp costs taxpayers $275 an hour for his work, while Ryan Koopmans cost $160 an hour. Both have GOP ties and have donated money to campaigns of key Republican leaders, public records show.

To date, the payments to the firm have been $68,787, state records show.


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