House Republicans have sent the governor a tax plan that ensures another round of income tax cuts go into effect in 2023. It gets rid of the state inheritance tax and it shifts the responsibility for funding for mental health services from counties to the state. That shift eliminates a property tax levy that has supported the mental health system.
“That right there is something that I think we can all go home with and say: ‘This is something we’ve done for you,'” Hite said. “We’ve eliminated that burden on the Iowa property taxpayers.”
Nine Democrats joined 55 Republicans to pass the bill. Representative Timi Brown-Powers, a Democrat from Waterloo, was among those who voted against the plan.
“In the long run, we’re probably not meeting the goal that we wanted to meet with child or adult mental health,” Brown-Powers said, “and I am afraid that we are going to see services cut instead of services expanded.”
The bill ends state payments to cities and counties to cover a commercial property tax cut the legislature ordered in 2013. Representative Sharon Steckman, a Democrat from Mason City, said the state is breaking a promise.
“You’re just playing a shell game,” Steckman said, “because eventually either the services in a city and county will be cut or they’ll have to raise property taxes.”
Republicans say the state payments are being phased out in the next five to eight years, giving city and county officials time to make budget adjustments. The bill has a host of other provisions, including more tax credits for housing developers and child care operators. It also ensures small businesses that got federal loans from the Paycheck Protection Program won’t have to pay state income taxes on that pandemic relief.
“This is an easy vote for me,” Hite said. “I’m going to vote for the Iowa taxpayer.”
Senate Republicans approved the tax package Monday. Republican Governor Kim Reynolds took to Twitter tonight, calling the bill a “WIN for Iowans.” She said it will “fully implement” tax cuts approved in 2018 and address other priorities like providing equitable state funding of Iowa’s mental health system.