JOHNSTON — Gov. Kim Reynolds said Friday she hopes she and the Republican-run Legislature can approve changes next session that will simplify the state’s complex income tax system and reduce the financial burden for hardworking Iowans helping to fund the government.
“It’s too complicated,” said Reynolds, who sees making Iowa’s tax code more competitive as a priority in growing the economy and creating good-paying jobs. “We need to make it simpler, we need to make it fairer, we need to make it flatter.”
During a taping of Iowa Public Television’s “Iowa Press,” the governor said she has been meeting with Republican legislative leaders over the interim. She said hopes they will come with a united tax package during the 2018 session once it’s better known what happens at the federal level and how that might impact Iowa’s income tax system.
Details still are being worked out and some significant factors remain unresolved, she noted.
“Virtually everything is on the table,” Reynolds told reporters after the taping.
She declined to specify whether some current tax credits, Iowans’ ability to deduct their federal tax liabilities on their state returns or other provisions of Iowa’s tax code might be outside the bounds of tax discussions.
“I just wanted to leave my options open,” she explained. “When you’re talking about tax reform, you need to go into it basically with almost everything being on the table ... .
“I really want to have a good, honest discussion about how we can help Iowans keep more of their hard-earned money in their pockets. If you start peeling things off, then pretty soon it really takes away your ability to put in place honest tax reform.”
Reynolds said her first months since months as governor after succeeding Gov. Terry Branstad, who resigned in May to become the U.S. ambassador to China, have been challenging and rewarding.
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For example, Reynolds said the state’s privately managed Medicaid system is undergoing a “restart” in its second year. It has a new director leading the state Department of Human Services, a new Medicaid director coming on board next week, the process is undergoing transition as one of three managed-care organizations has exited Iowa, and a search is underway to find a replacement insurer.
“This is a big shift from what we did before,” Reynolds said.
She rejected a suggestion that the system is “imploding,” saying Iowa is not the only state that has had providers “step out” in the process of moving from a fee-for-service approach to private management.
“It’s not unusual,” she said. “It’s kind of part of the process. But we’re focused on really providing continuity of care, to really minimizing the disruption that some of our most vulnerable Iowans are experiencing.”
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