Tax cuts, broadband, and amendments highlight Reynolds’ address

BY CHUCK VANDENBERG
PCC EDITOR

DES MOINES – Reactions from local legislators was mixed over Governor Kim Reynolds condition of the State address Tuesday morning.

Reynolds called for bold budget changes to several programs and called for two constitutional amendments around abortion and felon voting rights. She again reiterated her effort to reduce Iowa’s income tax structure.

The second-term governor introduced the Invest in Iowa Act where she proposes to cut income and property taxes, while creating sustainable funding for mental health issues and fully funding the Natural Resources and Outdoor Recreational Trust.

“These changes will make our vision a reality. It’s an investment in our future. And it’s an investment in those who are our future,” Reynolds said.

GOV. REYNOLDS

In 2010 Iowa voters created the outdoor trust based on a formula for distributing funds. Reynolds wants to adjust that formula to allow for 58% or about $100 million annually, of the funds to go to water quality issues, while committing $52 million to other efforts.

Sen. Rich Taylor (D-Mt. Pleasant) said there are already minor water quality programs going on in the state and the 58% may not be enough to address the major issues.

“I’m just afraid we’ll see some of those go away and then we won’t be putting much more into it than we have been, but I hope I’m wrong on that.”

Taylor said, in general, he was pleased with what he heard in the Governor’s speech, but said as in the past, she didn’t say how she was going to pay for the programs.

“She has to be planning on cutting programs to pay for everything and still give more tax breaks,” Taylor said. “You just can’t do these things without money.”

The state wrapped up 2019 with a $289 million surplus of funds and full cash reserve, but has some mandates in play that haven’t been funded including the state’s mental health care programs.

Reynolds said she is still set on reducing property tax and income tax burdens on individuals and businesses including reducing the state’s top tax rate from 9% to 5.5% by 2023.

She also plans to reduce personal income taxes by 10% for almost every Iowan with lower income Iowans receiving as much as a 25 percent cut in 2021.

“If we’re going to drop the top by 3.5% then we should drop the lower bracket by 3.5% as well. I doubt that will happen. This will be another issue where the rich get all the benefit,” Taylor said.

SEN. TAYLOR

State Rep. Joe Mitchell (R-Wayland) said he supports reducing people’s tax burden as long as some of the commitments don’t get lost in the cuts.

“I haven’t seen the numbers directly and this is the first time I’ve heard the proposal from her or anyone else,” Mitchell said.

“My concern is that our financials show we can afford to keep our promise to our schools, roads, bridges, prisons, and health care. In general I’m supportive but sometimes we jump the horse and we do the tax cuts and don’t cut anywhere else and get in trouble.”

Reynolds also wants to put an additional $15 million into rural connectivity and restructure the state’s match program to better leverage private and federal funds to connect the entire state.

“Broadband is not a luxury; it’s critical infrastructure. From the farmer checking crop conditions to the Main Street business participating in the 24/7 marketplace, connectivity should be the expectation no matter where you live,” Reynolds said.

Taylor said he has a bill on his desk that proposed to raise the state’s commitment $10 million, but would also add money to the state’s Chief Information Officer’s budget to help smaller Internet service providers secure federal grants to improve service.

“So many of our smaller Internet providers are people trying to provide service in rural areas and they just don’t have the resources or the personnel to write the grants and qualify for them,” Taylor said.

“I’m hoping we can mix our goals together and use the good part out of mine and the $15 million in hers and make a real program that will work for the little guy.”

Mitchell said he’d like to see that number a bit higher.

MITCHELL

“$15 million is in the right direction, but in our rural areas we have to have access to high speed. No business will want to come to southeast Iowa if we don’t have that,” he said.

Reynolds also talked about education funding and said she is proposing to put $103 million in new funding into the state’s public schools in the next budget. The state added $90 million in 2019.

Taylor said that amounts to about 2 to 2.5% allowable growth, which he said still isn’t near where it should be, but it’s a big step forward from the past several years.

Reynolds also said computer science should be a basic skill taught in every school and is asking for the state to be at 100% of elementary schools teaching computer science.

Mitchell said it’s the skill set of the future and we have to be teaching our kids to be competitive with the rest of the world.

“It’s a good initiative to have every school have computer science as something they are teaching,” Mitchell said.

“At WACO they innovated it and have received grants for those programs. That’s future coding, computer science and technology, so obviously we need to be preparing our kids for that skill set.”

Reynolds said she wanted to get sustainable funding from the general fund to help pay for the state’s mentally ill. Lee County spent down their mental health services budget in 2019, but will have to levy a property tax for those services in the next budget. Reynolds’ move would eliminate that.

Taylor is skeptical that can be a permanent solution.

“I don’t want to cut counties from levying and then decide in three years that’s not working out and we have to pick that levy back up,” Taylor said.

“If it’s permanent I’m all for it, and our area supervisors would be in favor of that. But if it’s not permanent, then we better be leery of what we’re signing up for.”

Reynolds also said it was time for constitutional amendments addressing abortion and felon voter rights.

“We must protect life by making clear, through an amendment, that our constitution does not grant a right to abortion. It’s time, and unfortunately it’s necessary.”

Mitchell said he didn’t read that as a constitutional amendment banning abortion, but amending to say there’s no constitutional right to an abortion under Iowa law.

“This is reversing the ruling and saying there’s not a right in the constitution to have an abortion,” Mitchell said.

“An amendment, if approved through the House and Senate, would go to a vote of the people and I’m fully supportive of letting people directly vote on it.”

Taylor said it’s an attack on women’s health care in the state.

“I really have never thought anybody is in favor of abortions, but that is a women’s health care issue and I think we should stay out of women’s, and families’, and health care decisions. It’s another attack on woman’s health.”

The governor is also pushing for an amendment to restore voting rights for felons. Taylor said she could do it by executive order if she was really passionate about it, but Mitchell said he thinks Reynolds wants it in the state’s constitution so it’s not so easily reversed as another executive order.

“She wants this set in stone and is pressuring the legislature to do our job and pass that so it’s forever instead of temporary,” Mitchell said.

Other new proposals in the speech included:
• an additional $2 million for Renewable Fuels Infrastructure and expanding the E-15 Plus Promotion Tax Credit
• expanding tele-medicine throughout the state to include public schools and birth facilities
• adding $1 million for work-based learning coordinates to expand apprenticeships and learning clearinghouses
• add $2.8 million each to the Last Dollar Scholarship program and the Employer Innovation Fund to help state workers upskill for new jobs
• double the income limit from $45K to $90K to qualify for Early Childhood tax credits
• reduce hurdles to professional licensing to include those with criminal records, as well as eliminating licensing fees for low-income Iowans

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