Tuesday, April 13, 2021

GOP lawmakers still undecided on tax cut prospects

(Radio Iowa) - Republican lawmakers have yet to decide what the 2021 legislature will do on tax policy. Republican Governor Kim Reynolds says the state can easily afford to speed up a series of income tax cuts. While Republicans in the Senate have endorsed that move, Republicans in the House are more cautious. Speaker Pat Grassley says Republicans in the House want to make a sound decision that can be sustained for the long term.

"We've been in the majority in the House for 10 years now and I think a lot of that is because of the decisions we've made on the budget," Grassley says, "and the stability that we've brought to state government."

Under current law, the cascade of income tax cuts only take effect if state tax revenue is projected to increase at least 4% -- and total tax collections are above $8 billion. Grassley refers to these requirements as "triggers."

[RIkayGOPtaxdebate1] "The reason the triggers were put in there was that was one of the piece that House wanted to put in during negotiations back in 2018...to make sure that we can stair step our way into it, provide that tax relief we want, without having to put the state budget at risk," Grassley says.

Tax revenue is projected to grow at 3.8%. Majority Leader Jack Whitver says Senate Republicans believe that's sufficient and agree with the governor on income tax cuts. The Senate GOP also wants to reduce county property taxes by having state taxes cover mental health system costs.

"Most states across the country use state funds to pay for mental health," Whitver says, "and we have a system that has locked in mental health funding for over 20 years on property taxes."

Whitver says Senate Republicans are not going to wait to find out if federal pandemic relief money being sent to the State of Iowa prevents the legislature from cutting taxes.

"We want to reduce taxes and I don't want another year. I mean, I don't think Iowans want us to wait another," Whitver says. "...We're not going to let Nancy Pelosi, Chuck Schumer and Joe Biden tell us what we can do with taxes in the state of Iowa."

Whitver and Grassley made their comments during separate appearances on "Iowa Press" on Iowa PBS.

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