Heading into the 2020 legislative session, we said policymakers had the opportunity to speed up scheduled tax cuts, make it easier to enter new careers, guarantee support is given to those who are genuinely in need, and increase the fiscal accountability of local governments.
ITR supported legislation that would allow Iowans to keep more of their hard-earned money and increase the freedom to make decisions without the government creating unnecessary barriers.
Now that the legislative session is over, what did lawmakers accomplish?
Two bills that ITR supported were passed by both the Iowa House and Senate and will now be sent to the Governor for her signature.
Remove Excessive Licensing Regulations- HF 2627
Excessive occupational licensing regulations create barriers for individuals entering the workforce and increases costs for businesses and consumers. This important reform:
- Implements universal recognition, allowing new Iowa residents with an out-of-state license to use their skills and training in the same licensed profession here in Iowa without additional red tape
- Waives initial licensing fees for first-time applicants of families earning less than 200 percent of the federal poverty level
- Applies common-sense criminal justice reforms to the licensure process for those with a conviction history
- Adds provisions related to the COVID-19 pandemic and the Governor’s proclamations during the public health emergency allowing continuing education requirements to be fulfilled online
Governor Reynolds included this bill as one of several key pieces of legislation that "will help ensure every Iowan, regardless of their background or circumstance, has an opportunity to succeed."
Senate Majority Leader Jack Whitver believes the reforms will "bring more people who are able to work into the workforce...lowering barriers to work in some professions."
Passing occupational licensing reforms will in fact make it easier for Iowans to work and pursue career opportunities, especially as we move forward from the economic havoc caused by COVID-19.
We all know heavy regulations serve as a red tape tax that impacts Iowa’s working class. Occupational licensing laws make it more difficult and more expensive for Iowans to earn a living and fill high-demand jobs. The changes passed by the legislature in House File 2627 put Iowans ahead of the special interests.
This legislation protects Iowa businesses and health care providers from many coronavirus-related lawsuits if they are acting responsibly and with caution.
House Speaker Pat Grassley explained, "These Iowans should be protected for their heroism, selflessness, and for doing the right thing during an unprecedented and rapidly evolving situation. That’s what our COVID liability legislation is about. But if there were businesses who failed to keep their workers safe, they can and should be held accountable for their actions. Our legislation ensures that."
Sen. Zach Whiting, the bill's floor manager said, "If you're an employer or a premises operator or health care professional, and you did your best to keep your people and your property safe based on the public health guidance and best practices at the time, you're OK, and you should not have the threat of litigation hanging over your head."
Senate President Charles Schneider provided a nice summary of the legislative accomplishments for the last few years:
"Since January 2017, the Legislature passed the largest income tax cuts in state history, making Iowa a more competitive place to attract jobs and people. We reformed the opaque and punitive property tax system by giving property taxpayers more say on how local governments set their tax rates. We put hardworking Iowans, instead of the union bosses, in charge of the state, local governments, and school districts. We cut unnecessary rules and regulations that hindered economic growth and job creation. We protected doctors and business owners from frivolous lawsuits. We held the state budget in check. We even created the blackout license plate, the most popular specialty license place in state history! I couldn’t be prouder of our record. I believe these reforms make Iowa a more free, fair, and prosperous place to live."
Work Left to Do for Some Issues
Income tax reform was a topic of much discussion, but major changes did not come to fruition. Governor Reynolds and Senator Jake Chapman should be given credit for introducing bills that would have re-shaped tax policy in Iowa and ensured a reduction in our income tax rates.
SSB 3116/HSB 657 - First, Governor Reynolds's comprehensive Invest in Iowa Act would have reduced income taxes, reduced property taxes, increased the sales tax, shifted mental health funding away from property taxes, and funded the Natural Resources and Outdoor Recreation Trust Fund. After the coronavirus paused the legislative session, Reynolds said, "It is now on the back burner, but it will be back in the future.
ITR offered strong support for Governor Reynolds’s Invest in Iowa Act. A good summary of that support can be found in this piece published in the Sioux City Journal.
SSB 3202 - The second bill attempting to bring about major income tax reform was introduced during the final week of the session by Senate Ways and Means Chair Jake Chapman. It would have eliminated economic triggers from 2018's tax reform and simply instituted the promised lower rates on January 1, 2023 without additional revenue hurdles. The bill passed out of subcommittee, but it did not advance further.
Chapman said, "That is taxpayer money. More now than ever, we need predictability in our tax climate, we need to incentivize, not penalize, Iowans. This is the time to really get our economy back on solid ground. These are measures that I believe provide the stability we need to get that engine rolling again."
Why is it so important to bring income tax rates down?
As ITR President Chris Ingstad testified in support of Senator Chapman’s bill, "Iowa’s income tax rates are still high in comparison to the rest of the country, and certainly within the Midwest. Of our neighboring states, only Minnesota has higher rates than Iowa. Lower-income tax rates, and increased certainty within the code, will make Iowa more attractive to people and businesses looking to move to our state. Reducing rates will also help encourage existing Iowans to stay here."
Other legislation not advancing this year:
The bills listed below were introduced, some were approved by a subcommittee or committee, and two were passed by one chamber but not the other:
HF 2424 - Eliminating the Welfare Cliff (Passed House)
SF 2395 - Taxpayer-funded lobbyist transparency
SF 307 - Complete repeal of the state inheritance tax
SF 2116 - Comprehensive review of all fees
HSB 503 - Excluding charges for legal services from fees to examine or copy public records.
HF 2060 - Limits the date of certain school bond elections to the regular school election date
SJR 20 - Spending limitation amendment
SJR 22 - Income tax supermajority amendment
HF 2368 - Remove two existing state regulations when a new regulation is added to the Iowa administrative code
What do you think?
Use our simple email form to quickly let the Governor and your legislators know you appreciate their effort or are disappointed with the lack of progress on an issue: