AP NEWS

Iowa Republicans at odds over plan for tax reform, cuts

April 12, 2018

DES MOINES, Iowa (AP) — Iowa Republicans offered conflicting proposals Thursday for how they intend to reform the state’s tax system and cut taxes, setting up a major legislative battle in the waning days of session.

GOP lawmakers with majorities in both chambers held nearly back-to-back legislative meetings at the state Capitol to advance their own versions of a tax plan that would need approval while lawmakers also finalize the next state budget.

Some provisions in the tax proposals are drastically different, indicating GOP lawmakers are far apart.

“We’re continuing to negotiate,” said Sen. Randy Feenstra, a Hull Republican who oversees the Senate’s tax-writing committee. ”... The bottom line here, the Senate is going to stay here as long as it takes to make sure that Iowa taxpayers get what they deserve.”

Rep. Guy Vander Linden, an Oskaloosa Republican and Feenstra’s counterpart in the House, said he hasn’t seen the Senate’s latest tax plan, but he questioned how responsible it would be.

“We know — well, assuming that the estimates are correct — where we will end up,” he said. “But we don’t know yet where the Senate plan is yet, but we need to know that, and I think Iowans need to know that.”

The Republican factions are working off a tax bill introduced earlier this session by GOP Gov. Kim Reynolds. That plan would cut tax revenue by $1.7 billion over six years, in part by cutting personal income taxes but leaving alone corporate tax rates.

Both Republican sides say they’re changing the details around. Whatever they do, they’ll need to reach agreement to send a final bill to Reynolds.

House Republicans have offered a plan that they say would cut $1.3 billion over five years. Senate GOP lawmakers offered a new plan Thursday that they say cuts $2 billion in tax revenue over roughly the same period.

Senate Republicans provided the public a one-page summary Thursday with few details. House Republicans introduced their plan late Wednesday after holding a short-notice public hearing on the governor’s bill Monday evening.

Separately, Republican lawmakers have yet to release spending targets for the state budget that goes into effect in July. A budget panel has estimated Iowa is expected to collect roughly $7.5 billion in state revenue.

Democrats, who have no real legislative power this session, criticized the tax proposals floating around as unrealistic. The state has faced budget cuts in recent years, and Democrats questioned the timing as well as which taxpayers would benefit the most from proposed tax reforms. The Republican plans seek to collect new sales taxes from internet sales.

“I’m afraid that money that we’re giving them back in tax refunds is going to be negated by other taxes,” said Rep. John Forbes, an Urbandale Democrat.

Lawmakers will stop receiving reimbursement for daily expenses next Tuesday, a date that’s long been considered the unofficial target for adjournment. The uncertainty over taxes and the budget has lawmakers planning for a later finish.

AP RADIO
Update hourly