The Des Moines Register released a new poll that shows a 53 percent job approval rating for Governor Kim Reynolds. This is up from 51 percent from the last poll. Governor Reynolds approval rating is even higher, 57 percent, when asked how she has handled Iowa’s economy. The poll affirms that Iowa supports the conservative pro-growth policy agenda that Governor Reynolds is advancing in Iowa. Governor Reynolds and the Republican-led legislature are leading Iowa in a conservative direction with fiscal conservatism and defending traditional values. Governor Reynolds is demonstrating that conservative policies work.
Governor Reynolds has been confronted with numerous challenges from the COVID-19 pandemic to storms that have brought devastation to Iowa. Through each of these challenges she has shown remarkable leadership and courage, even under severe, and often unfair, criticism. It should be noted that Governor Reynolds has also been helped with conservative legislative leaders. The most notable is Senate Majority Leader Jack Whitver, who is a conservative champion and understands the importance of pro-growth fiscal policies and defending traditional values.
Iowa’s economy has recovered from the pandemic triggered downturn because of Governor Reynolds and the Republican legislature following a policy of fiscal conservatism. Prior to the pandemic, Iowa’s economy was in strong condition. Even heading into the pandemic, Iowa’s fiscal house was in strong order thanks to prudent budgeting. As the 2021 legislative session began, Iowa had a budget surplus, and the reserves were full.
Currently, Iowa is expected to have over a $500 million surplus. In addition, there is plenty of money available for a rainy day, including a combined $817.9 million in the Cash Reserve fund and the Economic Emergency fund and $316.4 million in the Taxpayer Relief fund.
By following fiscal conservatism, Iowa’s economy was not only prepared for the economic emergency, but it allowed the state to recover quickly. Governor Reynolds and the Republican legislature have not only kept spending in check, but they have enacted pro-growth tax reforms.
In 2018, the legislature passed a comprehensive tax reform measure that began to lower both the individual and corporate income tax rates. The legislation also broadened the sales tax base, which helped lead to better-than-expected sales tax revenues during the pandemic. Further, in 2019, the legislature started to address Iowa’s high property taxes by passing an accountability and transparency measure.
Iowa was one of 11 states that enacted tax reform this year. A crucial component of the 2021 tax reform law, besides phasing out the inheritance tax, was eliminating the income tax triggers that were put in place in 2018 to lower the income tax. Now that the triggers are to be eliminated in 2023, the top rate will fall to 6.5 percent, and the individual income tax brackets will condense from nine to four brackets with a bottom rate of 4.4 percent.
In 2022, the Iowa legislature will have an opportunity to build on previous tax reform. Priority should be placed on lowering the individual and corporate income tax and addressing high property taxes. When signing the 2021 tax reform bill into law Governor Reynolds stated “we are not done yet. Next year, I’ll be proposing additional income tax cuts as we continue to make Iowa the most attractive place in America to open a business, raise a family, and start a career.”
Governor Reynolds has even stated that the ultimate goal is to eliminate Iowa’s income tax. Governor Reynolds understands that Iowa is in competition with other states for both jobs and people. Iowa cannot become complacent as other states lower tax rates. The 2022 legislative session will be an opportunity for Governor Reynolds and the Republican legislature to enact pro-growth tax reforms that lowers income tax rates. In addition, an opportunity exists to address Iowa’s high property taxes.
Conservative policies are working in Iowa. Whether it is the economy, education, or defending traditional values, Governor Reynolds is a national conservative leader.
John Hendrickson is policy director of Tax Education Foundation of Iowa, a public policy think tank