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Reynolds seeks sales tax hike

GOP excited by priorities the governor outlined

Iowa Gov. Kim Reynolds delivers her Condition of the State address before a joint session of the Iowa Legislature, Tuesday, Jan. 14, 2020, at the Statehouse in Des Moines, Iowa. (AP Photo/Matthew Putney)

Local legislators representing Fort Dodge and the surrounding area are excited by a number of priorities Gov. Kim Reynolds outlined in her Condition of the State speech Tuesday morning.

Among them are millions more for flood relief; a sales tax increase to accommodate mental health funding, conservation spending and income tax cuts; expansion of E-15 tax credits and promotion of renewable fuels; high speed broadband expansion; strengthening child care infrastructure and reforming Iowa’s occupational licensing system.

Reynolds also called on the state legislature to help pass constitutional amendments removing the ban on voting by former felons and removing the constitutional right to obtain an abortion.

“If we take this bold step, right now, then whoever is standing at this podium in 10, 20, or 30 years — Republican or Democrat — can proudly say what I can say today: The condition of our state is strong,” Reynolds said, telling the legislature that “it’s time we show the world the opportunity that lives here.”

While many specifics of bold priorities outlined Tuesday are yet to be laid out, legislators in the majority party — which has a trifecta of control in the Senate, House and governor’s office — know one thing.

“We’re going to be busy,” said Sen. Tim Kraayenbrink, R-Fort Dodge, “which is good.”

For Rep. Mike Sexton, R-Rockwell City, many of the measures mentioned will make his district more livable for the next generation of Iowans.

State Rep. Ann Meyer, R-Fort Dodge, said she was excited about the governor’s overall “positive message” during the address.

Off the top of Reynold’s speech was a commitment to earmark an extra $20 million for flood relief, which could particularly help the western side of the state devastated by floods last year.

Many other priorities outlined — mental health funding, E-15 and broadband — would touch rural Iowans in particular.

Reynolds said she would like to see the state sales tax raised a penny to better fund mental health regions — including the new children’s mental system created last year — currently funded solely by property tax.

“My district is mostly ag,” Sexton said. “If we can pull mental health away from property tax, that’s a huge benefit for property owners in my district.”

Sexton acknowledged that the priority may need to be tweaked as the state has a conversation about how the increase in sales tax and decrease in income tax could disproportionately impact lower-income constituents.

“I don’t know that I’ve ever been part of a bill (passage) where there wasn’t some unintended consequences,” Sexton said. “Mostly, they’re small.”

Meyer said mental health access has been something she has been working on in the legislature and in Fort Dodge, and she’s glad to see Reynolds making it a priority.

“That’s a priority for us, it’s a bipartisan issue,” Meyer said. “The things that I’ve been working on are bipartisan issues, and I’m glad that we’re going to be able to find some common ground and address these problems this session.”

“We’re pretty focused on not getting property tax out of whack,” Kraayenbrink said.

Reynolds touted the cut of Iowa’s top income tax bracket from 9 percent last year to what will be 5.5% in 2023, proposing an additional 10% to 25% income tax cut for nearly all Iowans.

“I have no interest in raising taxes,” Reynolds said, “so any increase in revenue from a sales tax would be more than offset by additional tax cuts.”

It’s unclear how the state would fund additional priorities with an effective net decrease in tax revenue.

Sexton also commended Reynolds on her emphasis of the E-15 Plus Promotion Tax Credit, which Reynolds said will support the sale of E-15 year round and drive domestic demand for renewable fuels.

“It’s very important to us, if you’re going to be the clean energy state, that our actions speak louder than words,” Sexton said.

The representative also was excited about Reynolds’ commitment to rural broadband, which he said is necessary to keep small towns competitive in a global economy.

“If we want to keep people in these rural towns, we have got to have high-speed internet in these small communities,” he said. “You can fix up an old building on Main Street and run a business … but (success) won’t happen without high-speed internet.”

Kraayenbrink said that mental health funding and a push for telehealth to address behavioral issues in schools struck a chord with him.

“We’ve all pushed for that last one,” he said.

Legislators were less unified on the governor’s request that Iowa rid itself of a blanket voting ban for those convicted of a felony. Iowa is now the only state in the union to ban felons from voting and require those wishing to restore their voting rights to apply personally to the governor.

“There’s a lot of questions out there to be had,” Kraayenbrink said. “(Reynolds) is bringing them to the forefront and forcing Iowa to have that discussion.”

Concerns for the senator include how the restoration would impact other constitutional rights for felons, such as the right to own firearms.

“We need more clarity to that,” he said.

Sexton, who voted on a felon voting rights restoration amendment that passed the House, said that allowing ex-offenders to vote would include the proper checks and balances necessary to prevent negative consequences.

The state budget Reynolds is introducing includes more than $103 million in new funding “so that Iowa schools can maintain the best teachers and classrooms in the world.” She called the funding a “historic investment.”

“I don’t know what ‘enough’ is for education, but I know that we have consistently over the past few years added more and more (funding) to education,” Meyer said. “I definitely think it’s a great step in the right direction.”

Both Kraayenbrink and Sexton noted that child care were prominent needs to their constituents.

Kraayenbrink said his biggest concern for child care was the simple lack of providers and spots for children. Another prominent concern of his, the “cliff effect” was addressed by Reynolds.

Reynolds proposes expanding the Early Childhood tax credits to families making $90,000 per year or less, double the current limit of $45,000. She said that addressing the top of the limit with a tiered system would avoid punishing Iowans from working hard enough to earn a raise that puts them just over the limit.

“The ‘cliff effect’ for child care assistance is in a particular bill that I’m working on,” Meyer said. “And I think we’re going to be able to find some common ground in solving that problem. I’m really excited about it.”

Sexton called child care in more rural areas almost non-existent — a burden for families with two working parents trying to make ends meet.

“When (House Republicans) have it listed as a priority and the governor makes it a priority, it makes you feel like this is something you can get done this year,” he said.

Meyer is optimistic for this legislative session.

“I think everything we’re working on, for the most part, is bipartisan and I think we’ll get things through without too much difficulty,” she said.

But a constitutional amendment with the potential to ban all abortions in Iowa might be a flash point for the government amidst many initiatives with bipartisan potential. The Senate has already passed such an amendment.

“We’ll probably take another swat at that to try to move that forward,” Kraayenbrink said. “That needs to be in front of voters.”

Unlike the Heartbeat Bill banning an abortion at around six weeks, which was signed in May 2018 but subsequently struck down in court, Kraayenbrink said voters would be getting the final say on the right to an abortion, which has been enshrined as a right to privacy in the federal constitution since Roe v. Wade and protected by Iowa’s Supreme Court in recent challenges.

“If we put this in front of voters, we’re not making the decision that abortions are illegal,” he said. “If (legislators) vote against (the amendment), they’re not trusting the voters of Iowa.”

All amendments to the Iowa Constitution must be passed through the Senate and House in two successive sessions and then ratified by a majority of voters.

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