Capitol Notebook: Gov. Kim Reynolds’ government reorganization helped expedite tax cuts, pro-business group’s report says

DES MOINES — Savings realized in the reorganization of the Iowa executive branch helped cover state income tax reductions, which in turn fueled economic growth, a new study from a pro-business, Iowa-based think thank says.

The report was published Tuesday by Common Sense Institute, a nonpartisan research organization that is “dedicated to the protection and promotion of Iowa’s economy” and lists free enterprise, economic vitality and individual opportunity among its guiding principles.

The report, titled “Iowa’s DOGE,” explores the relationship between statehouse Republicans’ recent reorganization of the executive branch of state government and recently enacted state income tax cuts.

In 2024, state lawmakers and Gov. Kim Reynolds accelerated previously planned state income tax reductions. It was the culmination of a series of state income tax reductions that ultimately created just one state income tax bracket — 3.8 percent for most Iowa workers.

One year earlier, in 2023, Reynolds and statehouse Republicans passed a restructuring of state government that reduced the number of cabinet-level state agencies from 37 to 16 and eliminated scores of vacant state government jobs.

According to the Common Sense Institute’s analysis, that government reorganization in 2023 paved the way for those accelerated income tax cuts in 2024.

Reynolds said during her annual Condition of the State address last month that the state has saved $217 million as a result of the 2023 executive reorganization bill.

Common Sense Institute’s analysis used that figure as a baseline and suggests the savings enabled those income tax reductions to come two years sooner than planned. That led to state GDP growth of $252 million and an additional $10.8 million in state tax revenue, according to Common Sense Institute.

The report praises Reynolds and the Republican-led Iowa Legislature for its fiscal policy, saying that Iowa shows states can reduce tax rates without impacting state services.

“State revenues have surged since the pandemic. But rather than indiscriminately increasing spending as revenues grew, state leaders controlled the rate of growth in government and prioritized improving efficiency,” Common Sense Institute Director of Policy and Research Ben Murrey said in a press release. “This approach enabled tax cuts while preserving essential services, creating a model for sustainable fiscal policy.”

New site maps recycling centers

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A new website — empties.org — created by the non-alcoholic beverage industry shows Iowans where to find the 300-plus recycling redemption centers in Iowa.

The Iowa Beverage Association, which represents Iowa’s non-alcoholic beverage producers, bottlers and distributors, created the site.

It is designed to help Iowans find local redemption centers where they can recycle beverage bottles and cans and help the redemption centers by making them more accessible, the Iowa Beverage Association said.

A nickel is collected as a “bottle bill” deposit in Iowa, which can be redeemed by returning empty bottles and cans.

In 2022, the state repealed the law’s requirement that grocery and convenience stores accept returned recyclables and increased the fee paid by beverage distributors to redemption centers, with the goal of incentivizing the expansion and creation of more redemption centers across the state.

The number of state-licensed redemption centers has increased, but not enough to offset the number of grocery and convenience stores that got out of the recycling business, recycling advocates say.

“Recycling your cans and bottles isn’t just about redeeming your nickel, it’s helping to divert waste from landfills, conserve natural resources and support a more sustainable future,” Jon Murphy, executive director of the Iowa Beverage Association, said in a news release.

“Our association, along with our colleagues in the industry, are committed to helping Iowans bring their bottles back to a redemption center near them. Empties.org provides an opportunity to help with recycling, and put some change back in the pockets of Iowans.”

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