Governor Kim Reynolds is suggesting the tax and budget cutting formula she’s used over the past seven years could be the model for Republicans who will be in control of congress and the White House next year.
“As Washington prepares for taxes to take center stage in the next administration, there’s a new growth oriented, fiscally conscious model to look to in the heartland,” Reynolds said during a speech today at the Iowa Taxpayers Association’s annual symposium.
Reynolds, a Republican who’s a former county treasurer and state senator, took over as governor in mid-2017. She has signed five separate tax reduction plans into law. Next month, Iowa’s personal income tax will shrink to a single rate of 3.8%. The state income tax for corporations has been reduced as well, but has not reached the target of a single 5.5% rate.
“Iowa’s journey to tax competitiveness — it wasn’t a matter of a few modest tweaks,” Reynolds said. “It was a complete, top-to-bottom transformation.”
Reynolds also spearheaded a reorganization plan for state government in 2023. It consolidated 37 state agencies into 16. Earlier this year Reynolds signed the law that has eliminated dozens of state boards and commissions.
Today, Reynolds cited the so-called ‘Kansas Experiment” that saw GOP lawmakers there slash income taxes in 2012, but in 2015 they wound up raising the sales tax in Kansas to the second highest rate in the nation to deal with budget woes. Reynolds again indicated budget trimming is required in order to cut taxes in Iowa responsibly.
“Fundamentally the story of Iowa’s transformation was less about implementing clever policies and it was more about unleashing the energy and creativity in Iowans and in our communities,” Reynolds said. “It was truly the triumph of simplicity over complexity, growth over spending and bottom up energy over top down management.”
Reynolds reviewed policies of the past at the Iowa Taxpayers Association luncheon, but did not reveal what tax or spending ideas she’ll ask legislators to implement in 2025. Before her remarks at today’s luncheon, Reynolds received the annual Iowa Taxpayers Association’s award for advancing business-friendly tax policies. The national Tax Foundation gave Reynolds its annual distinguished service award last month.