ARTICLE

'Devil is in the details' of Iowa's tax package

Republicans weigh sales tax for natural resources, mental health

A sunset illuminates the Iowa State Capitol dome in Des Moines. (Rebecca F. Miller/The Gazette)
A sunset illuminates the Iowa State Capitol dome in Des Moines. (Rebecca F. Miller/The Gazette)

DES MOINES — Minority Democrats balked Thursday at committing their support for passing a tax package that would include funding for water quality and environmental initiatives because they have not been part of the ongoing talks by majority Republicans and Gov. Kim Reynolds.

“I’m hesitant to say where Senate Democrats will land,” said Senate Minority Leader Janet Petersen, D-Des Moines, when asked about the prospects for lawmakers raising the state’s sales tax and infusing some of the proceeds into a natural resources trust fund that Iowa voters approved in 2010.

GOP leaders say they are discussing a wide-ranging proposal for the 2020 session that would include the IWILL — Iowa’s Water and Land Legacy — sales tax and possibly having the state take over the cost of mental-health services — now financed by property taxes — by using a share of a 1 percent boost in the state’s sales tax.

“Tax reform will be on the table again this year,” Senate Majority Leader Jack Whitver, R-Ankeny, told a legislative forum sponsored by the Greater Des Moines Partnership.

However, he said, any sales tax increase would be part of an overall package that would reduce Iowans’ tax burden — most likely by further cutting state income taxes.

“As long as we’re in the majority in the Senate and as long as I’m the leader, we’re going to continue to try to reduce the tax burden on Iowans, and so that bigger bill would have to be a tax reduction,” Whitver said. “We’re not going to go through a tax increase, I’m confident of that.”

Bipartisan Support Needed, GOP Says

The work-in-progress tax package also would need to revamp the formula for distributing the three-eighths of a penny in sales tax going into the IWILL account — a permanent and protected funding source dedicated to improving the state’s water quality, protecting and conserving Iowa’s productive farmland, expanding natural areas, including parks, trails, fish and wildlife habitat, and providing recreation.

“It’s probably going to be part of an overall package, but what that looks like I don’t know,” said House Majority Leader Matt Windschitl, R-Missouri Valley.

“The devil is always in the details,” he added, saying for any tax-change package to advance next session, “it would have to have bipartisan support.”

Republicans currently hold majorities of 32-18 in the Iowa Senate and 53-47 in the Iowa House, where Rep. Jo Oldson, a Des Moines Democrat who serves as the minority’s party whip, said there could be support for an IWILL proposal that “interweaves” tax changes in an overall approach that funds priority needs as well.

“We’ll wait and see what comes at us,” said Oldson, who noted the Statehouse has been short on details but flush with “rumors” about what may be components of a measure — a package that could include a long-term, sustainable funding source for addressing the mental-health needs of children and adult Iowans.

Whitver said the state is in a good position to consider more tax reductions, given its “strong financial position” with a surplus topping $400 million and reserves of more than $800 million after several years of shortfalls and austere budgeting.

Democrats Say They Lack Info

However, Petersen said, many priorities, like education, health care and public safety, have gone underfunded and other needs neglected as Republicans passed a massive tax cut two years ago with no input from Democrats or most Iowans.

She said she doesn’t want to see that repeated in 2020.

“It looks like Republicans are headed down the road of more slashes to the budget in terms of tax issues,” she told reporters after Thursday’s forum.

“We have yet to be invited to any of the meetings where things are being discussed and where groups are negotiating,” Petersen said. “This should be a discussion that everyone should have a chance to see happen in the public eye, not behind closed doors.”

Absent more details and a place at the negotiating table, she added, “I’m hesitant to say whether or not Democrats would support it.”

The Legislature is scheduled to begin its 2020 session Jan. 13.

Comments: (515) 243-7220; rod.boshart@thegazette.com

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.