Gov. Reynolds' $1.7 billion tax cut bill was the subject of a public hearing at the statehouse last night, where dozens of Iowans weighed in for and against.
The bill which is under consideration in the House cuts personal income taxes by up to 23 percent as well as small business taxes. It would cost the state treasury $300 million a year starting next year.
One supporter, Amy Boozell, is a mother of five who works with the Boys and Girls Clubs of Story County. She says working people deserve a break on their taxes.
“I see low- to medium-income families in my day-to-day work,” Boozell said. “For many Iowans a few extra dollars in their paychecks can put gas in their cars or buy groceries.”
Business groups, including the Iowa Chamber Alliance and the Iowa Association of Business and Industry spoke in favor of the small business tax cuts in the bill, but argued the legislation should also include corporate tax cuts.
A lobbyist for the Koch brothers-funded Americans for Prosperity said it’s important for the tax package to promote “real growth” in the state.
“We’ve got to do something about the business tax environment, which puts us dead last in the country,” said Drew Klein. "We’re supportive of the governor’s package, but we think there are a number of things we could do to make it more meaningful.”
But critics questioned how the state budget can afford the loss of $300 million a year without cutting education and other services, when the state budget is already under stress.
“The Iowa State Education Association believes this bill is illogical and borders on the brink of insanity,” said ISEA lobbyist Brad Hudson.
“Just this last month we passed SF 2117 which included $35 million in additional cuts to the current budget,” said Morgan Miller with the American Federation of State County and Municipal Employees. “I can’t comprehend how the legislature will handle the shortfalls to the scale of $1.7 billion.”
In addition to tax cuts, the bill increases sales taxes for a number of services, from digitally-delivered information and internet sales to ride-sharing services such as Uber and Lyft.
“Don’t tax the new economy,” argued former Cedar Rapids Mayor Ron Corbett.
A bigger tax cut bill that does include corporate tax cuts was rushed through the Senate without public input. Republicans in the House and Senate are now working to reconcile their two bills.
“We’re not wedded to any specific thing,” said Rep. Guy Vander Linden (R-Oskaloosa), who chairs the tax-writing Ways and Means Committee in the House.