News from District 96
As Ways and Means Chair, I am responsible for reviewing all tax legislation. In the Governor’s Condition of the State address she proposed implementing an additional 1-cent sales tax will increase Iowa’s revenue by $540 million, enabling the following:
- Create additional tax relief, improving Iowa’s competitive position and allowing Iowa families to keep more of what they earn.
- Fully fund the Natural Resources and Outdoor Recreation Trust Fund, further improving Iowa’s water quality and quality of life.
- Fully fund Iowa’s Regional Mental Health System, ensuring that every Iowan has the opportunity to be healthy and well.
Governor Reynolds has made a commitment to reducing taxes to ensure that hardworking Iowans are able to keep more of their hard-earned dollars. To carry out this, she has proposed a plan to cut individual income tax by 10 percent on average and by lowering the highest tax rate from 8.5 percent to 5.5 percent. The bill will also reduce property taxes by lowering the county mental health levy statewide by $77.1 million. The State will replace these dollars through appropriations funded by the 1-cent tax increase, which will allow for an overall increase for mental health funding in Iowa. We will also broaden the number of items that are sales tax exempt to include diapers and feminine hygiene products.
The bill also includes Early Childhood Development and Child and Dependent Care tax credits by doubling the maximum net income amount for eligibility from $45,000 to $90,000. This part of the legislation is very similar to a bill that the House passed last session but stalled in the Senate.
In 2010, Iowans voted to amend the constitution and create the Natural Resources and Outdoor Recreation Trust Fund with the purpose of “protecting and enhancing water quality and natural areas in this state.” To date, the trust has remained unfunded. By raising the sales tax, the amendment will dedicate 3/8 of the proposed 1-cent sales tax and provide the necessary, sustainable funding for the trust.
The fund will allocate $99.5 million to water quality efforts. This funding will strengthen Iowa’s nutrient management reduction plan. $52.3 million of the fund will be dedicated to the improvement of conservation and recreation in Iowa.
Adjustments to Iowa Code Chapter 461 are proposed to acknowledge the nutrient reduction strategy as the foundation of the state’s water quality efforts and ensure periodic reviews of the code are conducted to comply with the most current evidence-based practices and policies.
This bill is currently undergoing the legislative process, and if you would like to read further you can find the bill on the legislative website by searching for HSB 657. Also if you have any question or comments relating to HSB 657 please feel free to email me at Lee.Hein@legis.iowa.gov.