The sweeping tax plan Republican Governor Kim Reynolds calls the “Invest in Iowa Act” got its first hearing at the statehouse this week.

It would raise the sales tax to fill a state fund for outdoor recreation and water quality projects. Dustin Miller with the Iowa Chamber Alliance said that part of the plan could help with the state’s workforce shortage.

“One of the ways to attract talent to the state is to provide resources for placemaking,” Miller says, “and making attractive places people want to come to.”

The plan would also lower income taxes and see the state take on more of the costs of mental health services that are paid now by property taxes. Peggy Huppert with the National Alliance on Mental Illness Iowa supports the plan, but urged legislators to make sure the new limit on property tax funding can be lifted if state support dwindles.

“We are concerned about imposing this very low cap on counties and then them not having any recourse if the state does not live up to their end of the bargain,” Huppert said.

Business groups expressed support for the income tax cuts, but asked lawmakers to also lower corporate taxes. Others are concerned about changes in the natural resources funding formula and warn there isn’t enough accountability built into water quality programs.

The governor is holding more town hall meetings in Harlan and Council Bluffs tomorrow to discuss her Invest in Iowa Act.

(Reporting by Iowa Public Radio’s Katarina Sostaric)