Iowa Senate GOP fast-tracks bill with $1B in annual tax cuts
DES MOINES, Iowa (AP) — Iowa Senate Republicans on Wednesday released a plan they say would cut more than $1 billion annually in taxes, and they appear set to fast-track its passage through the chamber even though few details have been shared publicly about its full fiscal impact.
The proposal, released in a roughly 130-page bill, would make a wide range of changes to Iowa’s tax system. It includes cutting corporate and individual income taxes and phasing out some tax credits that have taken up more of the state budget in recent years.
“This is real, meaningful reform coupled with a significant reduction — not just tinkering around the edges,” said Senate President Jack Whitver, an Ankeny Republican.
Still, Senate Republicans gave the public little time to review the bill before scheduling a subcommittee meeting Thursday morning and a vote hours later in a tax writing committee. That means the legislation could have several procedural votes a little over 24 hours after it was introduced.
At a legislative meeting Wednesday, some Senate Democrats raised concerns about how quickly the bill could advance without more fiscal data available to lawmakers and the public.
“Is this responsible government?” asked Sen. Herman Quirmbach, an Ames Democrat.
The bill goes further than a tax plan from GOP Gov. Kim Reynolds that would cut individual income taxes but not corporate taxes, in part because of ongoing revenue shortfalls in the state’s current $7.2 billion budget. Reynolds wants the Legislature to study the state’s use of tax credits and has indicated she wants to address corporate taxes in the future. Reynolds’ proposal, available in a bill released earlier this month, has not had a preliminary subcommittee meeting yet.
Both tax proposals come as the GOP-controlled Legislature is considering mid-year budget cuts of at least $30 million that are expected to impact various state agencies and public universities. Lawmakers are also sorting out how to address repaying about $144 million in borrowed money from emergency reserves.
Senate Republicans did not focus on those financial realities in a statement, though it’s possible the federal tax cuts approved through Congress late last year could play a role. Those changes are expected to bring in some new state revenue.
Senate Majority Leader Bill Dix, a Shell Rock Republican, claimed without specifics that the plan in his chamber “will boost the local economy.” Sen. Randy Feenstra, a Hull Republican who leads a Senate tax writing committee, added the proposal “encourages Iowans to invest in themselves and our state.”
Feenstra later declined to offer a concrete timeline on whether more financial data about the bill will be available in time for Thursday’s committee vote.
The Senate GOP plan includes reducing the top corporate tax rate from 12 percent to 7 percent. Individual tax rates would also be cut, including reducing the top rate from 8.98 percent to 6.3 percent.
The measure, like Reynolds’ plan, would eliminate a system that has allowed Iowans to deduct what they pay in federal income taxes from state tax liability.
Brenna Smith, Reynolds’ press secretary, said the governor’s office was still reviewing the Senate GOP bill. Smith said Reynolds is “pleased” the Senate is adding provisions the governor didn’t include in her own plan. She declined to comment on the bill’s legislative speed through the chamber.
“We look forward to working with both the Senate and the House to pass a bill that cuts taxes and does it in a fiscally responsible way,” Smith said in an email.
The nonpartisan Legislative Services Agency has yet to publish fiscal notes that analyze the financial implications of either the Senate GOP plan or Reynolds’ proposal, though it notes that procedural rules won’t require the notes until the measures moves further along through the Legislature. The Iowa Department of Revenue has provided a preliminary review of the governor’s plan, but the agency doesn’t have one yet for the Senate GOP plan.
It’s unclear how much support the Senate GOP plan has within the other chamber. House Republican leadership was reviewing the bill for the first time Wednesday, according to a spokesman. The chamber did not have an immediate comment.