Governor Kim Reynolds.
Republican Governor Kim Reynolds says she does not plan to dictate which components of her tax plan must be included in the final version she negotiates with Republicans who control the legislative branch of government.
“I’m not going to do that because that’s not how you build consensus,” Reynolds says.
For example, the governor’s original plan included a form of “speed bumps” so a yearly tax cut would not go into effect if there’s a downturn in Iowa’s economy. Those “triggers” are not included in two of the three tax plans that have emerged in the Republican-led legislature. Plus, the plan that cleared a House committee last Thursday did not include the governor’s proposal to end a state tax break for federal taxes. It’s a tax deduction that makes Iowa’s individual income tax rates look higher than they are when compared to other states.
“It’s part of the negotiation,” Reynolds says. “I believe it’s important that we do something with federal deductability because we have federal tax reform and so the timing seems appropriate.”
Because of that deduction and because federal taxes were cut, Iowans will wind up paying more income taxes to the State of Iowa if policymakers fail to do something to cut Iowa individual income tax rates.
As for the size of the tax cut, House Republicans are aligned with the governor at about $300 million a year, while Senate Republicans are proposing about three-quarters of a billion dollars. Reynolds told reporters today the final tally of tax cuts may wind up “somewhere in the middle.”
“But what I’ve said from the word go is that I want to make sure that it’s comprehensive, it’s significant, but sustainable,” Reynolds said during her weekly news conference.
A “sustainable” plan will leave the state with enough tax revenue to meet on-going commitments to the state’s education system, the Medicaid program and other priorities, according to the governor.
AUDIO of Reynolds’ weekly news conference