Working on tax reform



District 11, R-Storm Lake

Chairman of the Justice Systems Appropriations Subcommittee

We are currently in the “hurry up and wait” stage of the 2018 session. The number of policy bills has dwindled and the focus is now on the budget. The “hurry up and wait” is a result of negotiations among the House, Senate and the Governor. House and Senate appropriations chairs along with leadership are meeting multiple times per day to negotiate not only the budget, but also a tax reform package. Each negotiation session results in change, and each change results in the need for a new computer analysis in order to evaluate the consequences.

We are undertaking tax reform because Iowa’s tax code is outdated, overly complex, and has some of the highest income tax rates in the entire country. Also, due to tax reform at the national level, Iowans will pay $1.8 billion less in federal taxes in tax year 2018.  However, due to the fact that Iowa has federal deductibility, Iowans will pay additional state taxes totaling $107 million in tax year 2018, and grows to $153 million in tax year 2019. This money should not be used to increase spending and grow state government. Rather, it should be returned to the hard-working taxpayers of Iowa who deserve relief.

We are working diligently to find a way to leave more money in the pockets of Iowa taxpayers while making our tax code simpler and fairer. We also understand that any tax reform must be pragmatic and protect budget sustainability for future years.

On Monday Gov. Kim Reynolds signed a bill that creates affordable health plan options for Iowans who can’t afford to buy health insurance. Senate File 2349 allows health plans created by associations of employers or sponsored by certain agricultural organizations. In her Condition of the State address in January, the governor called for lawmakers to work together on a bill to give Iowa farmers, small business owners and their employees’ access to affordable health care.

Before the Affordable Care Act took effect, Iowa had a healthy individual insurance market. There were nine carriers, with good participation and reasonable premiums. Today, the state’s market is in collapse. Premiums went up 57% last year, forcing many Iowans to choose between going broke or going without insurance. As a result, 26,000 Iowans left the insurance market.

Senate File 2349 allows Farm Bureau to build a self-funded health benefit arrangement that will work for Iowans forced from the individual market. It also gives small employers the ability to band together to create affordable health care options for their employees.