Republican leaders in the Iowa legislature say they’ll “keep an open mind” as they wait for more details of the governor’s tax package.
Republican Governor Kim Reynolds used the annual “Condition of the State” address this morning to propose deeper state income tax cuts as well as an increase in the state sales tax to finance mental health care services and more water quality projects.
“It’s kind of the canvas that I’ve laid out,” Reynolds said during an interview with Radio Iowa late this afternoon. “We have an opportunity to really set the stage — and I meant that in the speech — for the next 10 to 20 years.”
Reynolds used the word “comprehensive” to describe the plan.
“It touches everything,” Reynolds said. “I tried to think about all the issues, the different areas that people were invested in.”
The plan speeds up a series of income tax cuts originally approved in 2018 and adds a 10 percent across-the-board cut for most Iowans as well as a 25 percent reduction in state income taxes for low-income Iowans. The additional revenue from the one-percent state sales tax hike would have two uses under the Reynolds plan — first, to dramatically increase state spending on the mental health system for adults and children.
“And it invests significant dollars into water quality, conservation and quality of life,” Reynolds said, “and if we want our young people to stay in this state and we want to attract new people here, this is an opportunity to build out what that looks like.”
Some Democrats today suggested cutting income taxes and raising the sales tax shifts the tax burden onto lower income Iowans. Reynolds, in response, said the state does not charge the sales tax on food and prescription medications and she’s calling on legislators to erase the sales tax on diapers and feminine hygiene products as another way to reduce the tax burden for low-income Iowans.