Timing is everything. It is especially bad timing to cut Iowans from food assistance and other basic support during a deadly pandemic that has claimed over 5,400 Iowa lives, infected well over 1 in 10 Iowans and led to a devastating economic crisis.
Even worse is proposing these cuts two weeks after the state reminded us how much Iowa spends on its largest business tax credit: nearly $70 million from the Research Activities Credit, mostly in the form of "refund" checks sent to big companies that paid no income tax that year.
But the Iowa Senate found no problems with their timing when they approved SF 389 on Tuesday. This bill would set up barriers to enrolling and staying on safety-net programs like SNAP (food assistance) by establishing a pricey new eligibility system and punitive rules and red tape. The bill is a pointless, complex scheme that defies common sense in making sure that health and food assistance dollars are used properly and effectively.
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Already, the state verifies identity, income and other eligibility criteria using state and federal sources, including the IRS and Social Security Administration. An Iowa Department of Human Services official told a Senate panel the verification elements of the bill are unnecessary because a new national system is in development that states will be able to use for free. This legislation would cost the state money to contract with a private company and hire new positions to process the resulting paperwork.
Rather than improve accountability, this bill would burden eligible families, creating extra hurdles to qualify and respond in a timely way if questions are raised. It gives incentives to outside vendors hired by the state to find discrepancies and trip up benefits to a family in need of help.
One out-of-state, pro-restriction lobbyist estimated during a public hearing that enrollment in SNAP alone would decline by over 50,000 people — 1 in 6 Iowans currently enrolled.
Ramping up red tape is especially heartless during a pandemic and economic crisis during which hundreds of thousands of Iowans have lost jobs and do not need extra hassles. But extra requirements are shown to reduce participation even in better times. Analysis in California over 15 years found that, with SNAP re-enrollment paperwork requirements, three eligible households left the program for every one ineligible household screened out in a given month.
The Iowa bill also would deny food assistance to households with more than one vehicle. So, if someone in a family loses a job, the family faces a terrible choice: sell their old, second car (even if it's needed to find and get to a new job) or go without enough food. The Urban Institute has shown how asset limits keep the lowest-income families from getting ahead and becoming self-sufficient, even as they raise administrative costs.
This bill stands in stark contrast to what we do for the most powerful, who never have to worry about where they'll find their next meal. The annual state report on the Research Activities Credit found once again the giveaway included over $40 million in checks to companies that didn't pay Iowa state income tax. The automatic subsidy supplements the millions of dollars in research they already do and would do anyway, on their own, without the benefit.
There has never been a demonstrated need for this big-business subsidy, and Iowa legislators decline to reform it year after year — but they want the poor to jump through hoops to get food on the table.
The danger right now to Iowa families and our economy is providing too little support to help families keep their children fed, sheltered and healthy. Let's focus on making our public assistance systems both efficient and humane. Families need the help now. Timing is everything.
Mike Owen is deputy director of Common Good Iowa, a nonpartisan, nonprofit public policy research and advocacy organization with offices in Des Moines and Iowa City. Contact: mowen@commongoodiowa.org.