Governor Reynolds Launches 4% Income Tax in State Address | Government-and-politics

ERIN MURPHY Journal Des Moines Bureau

DES MOINES – A four-year transition to a 4% flat tax rate on state income, shortening the time frame during which Iowans could claim unemployment benefits and a new plan to dedicate kindergarten to 12th grade public year to private school tuition is part of the proposals presented Tuesday night by Iowa. Governor Kim Reynolds in his charge before state legislators.

The Republican governor, who faces re-election this year, unveiled the proposals during her annual State of the State address to the Iowa legislature. She delivered her remarks in the room of the Iowa House at the Iowa Capitol.

State taxes on all of Iowan’s income would be reduced annually to 4% in 2026, according to Reynolds’ proposal. The governor’s office said that would make the state of Iowa’s tax burden the fifth lowest in the country. The state, according to the governor’s office, currently has the 16th highest burden.

“Flat and fair,” Reynolds said, according to his prepared remarks.

When fully implemented, the income tax cut would mean the average worker in Iowa would pay $ 1,300 less per year in taxes, the governor’s office said. This adds, according to the office, to $ 1,000 of average savings already expected thanks to the income tax cuts adopted by the state in 2018.

People also read …

“It’s money that can be reinvested in our economy and used to promote the prosperity of every Iowan,” Reynolds said in his prepared remarks. “Yes, we’ll have less to spend once a year on Capitol Hill, but we’ll see it spend every day on the main streets, in grocery stores and in restaurants in Iowa. We will see it spent in businesses rather than bureaucracies. “

The proposal would reduce state revenues by about $ 1.6 billion in 2023, the governor’s office said. The most recent state budget was just over $ 8 billion.

The governor’s office said if state revenue and expenditure continued to rise to their recent averages of 4 and 2 percent respectively, the flat-rate income tax of 4 percent would result in no budget cuts. The office also said the plan does not require any use of the state’s taxpayer trust fund, which currently stands at $ 1 billion.

Reynolds’ proposal would also phase out all state taxes on retirement income.

The governor’s tax plan requires legislative approval. Some legislative Republicans have proposed eliminating state income tax altogether.

Reynolds also proposed making more changes to the state’s unemployment system to address the shortage of workers in Iowa. According to his staff, Reynolds will create a separate division within the state’s workforce development agency to work with companies looking for employees.

Reynolds also proposed reducing the length of time Iowans can receive unemployment benefits – from 26 weeks to 16 weeks – and reducing new wage offers that Iowans receiving benefits must accept.

Currently, Iowans who receive benefits must accept a job offer if it pays a certain percentage of their previous salary. Reynolds will propose lowering those thresholds as a way to get unemployed Iowa workers to work earlier.

According to his prepared remarks, Reynolds said the current 26 weeks to receive benefits are “frankly … longer than necessary,” and the lowering of the wage threshold will ensure “that those who perceive unemployment cannot turn down suitable jobs. while living off taxpayer funds. “

Education financing and policy

Reynolds’ budget proposal includes a 2.5% funding increase for each of K-12 schools, community colleges, and the state’s three public universities.

She also proposes to use federal stimulus funds on a one-time retention bonus of $ 1,000 for all teachers in Iowa who stay in their school for another year.

Reynolds also proposed an expansion of public funding for private school tuition fees. His proposal would make $ 5,340 available to any public school student living in a household at or below 400% of the federal poverty line. This equates, for example, to a three-person household with a total income of $ 87,840 or less, or a four-person household with a total income of $ 106,000 or less.

The figure of $ 5,340 is based on 70 percent of state aid per student. The remaining 30 percent, or about $ 2,300, would go into a state fund and would be reallocated to smaller school districts.

Reynolds’ previous proposal for private school tuition fees was not passed in Iowa House, in part because she feared it would put financial stress on small rural school districts.

“We want to make sure our small schools remain strong while allowing parents to choose what’s best for their child,” Reynolds said in his prepared remarks.

The program would initially be capped at 10,000 students, the governor’s office said.

Responding to recent concerns from parents and some lawmakers in the Republican state about books in school libraries that they deem to have graphic or explicit material, Reynolds said strong words in his speech but came up with a modest policy proposal .

Reynolds’ proposal would require all schools to publish all classroom materials, including textbooks, curricula and standards, as well as a full list of books available in the school library online. Schools are already required to have this information; Reynolds’ proposal would force them to post this online.

His proposal would also add a provision that if a school district does not respond to a parent’s complaint about books or materials within 30 days, the complaint is forwarded to the state’s education department. State funding would be denied to any district that did not comply with the new requirements.

“We live in a free country with freedom of speech. But there’s a difference between shouting vulgarities around a street corner and pointing them out as required readings in class. There is a difference between late night cable TV and the school library, ”Reynolds said. “If school boards and administrators refuse to understand this – if they believe the classroom is about pushing their worldview – then we’re on the wrong track. “

Books reported by some parents and lawmakers are generally about LGBTQ characters or written by LGBTQ authors and describe sexual encounters in brief passages.

Reynolds is also proposing, according to his office, to require all students to take a citizenship test in order to graduate from high school.

Reynolds has also changed from last year and will reintroduce ethanol legislation. His new proposal will require all retailers with compatible equipment to offer the E15 ethanol blend by 2026 – a blend of less than 10% is the most common today – and will require any newly installed or upgraded infrastructure to be E85 or B20 compatible.

Reynolds has proposed a budget of $ 8.2 billion for the fiscal year that begins July 1. His proposal would leave $ 960 million in the final balance and all of the state’s emergency and reserve accounts would be full.

Most state agencies would benefit from status quo funding, with the exception of an $ 86 million increase in health and social services funding – of which $ 71 million would go towards the increase in health and social services. funding for mental health care – and a combined $ 11.6 million increase in justice and justice funding. systems.

No agency would be forced to cut spending, the governor’s office said.

Comments are closed.