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Most Speakers at Governor’s Budget Hearing Focus on Tax Policy

(Radio Iowa) Various interest groups lobbied for their preferred approach to tax changes during the hour-long virtual budget hearing Governor Kim Reynolds hosted yesterday (Thursday). Reynolds did not reveal her own plans, but made it clear she will propose tax cuts of some kind.

“We’re not competitive. We’re not where we need to be,” Reynolds says. “I’m looking forward to working with the legislature and passing generational tax relief…and we absolutely should be moving in that direction.” Chris Hagenow of Iowans for Tax Relief got the first speaking slot and called for permanent reductions in personal income tax rates.

“Secondly, we think there’s an opportunity to make some progress on property taxes, specifically through a truth-in-taxation, direct notification system,” Hagenow says, “to give Iowans the tools to understand when their property taxes are going to be increased.” A new Utah law requires citizens be notified when a city, county or school district intends to raise property taxes and be invited to a public hearing to voice concerns. Some representatives of business groups urged the governor to cut corporate income taxes. Jessica Hyland of the Iowa Biotechnology Association urged Reynolds to maintain tax breaks for investors in start-up companies and the research and development tax credit for corporations.

“We just hope you’ll kind of keep those in mind and keep those strong as you’re looking at overall tax reform,” she said. Others spoke in general terms, using phrases like tax equity for businesses. Scott Newhard is vice president of the Associated General Contractors of Iowa.

“AGC encourages tax policy that allows businesses to compete vigorously in worldwide market,” Newhard said. Sharon Presnall of the Iowa Bankers Association brought up the long-standing dispute over the different ways banks and credit unions are taxed.

“In the financial services sector, for example, we have vast difference in what financial service providers pay in income taxes,” she said, “and that inequity skews the competitive marketplace and it makes the task of delivering tax reform for all Iowans more difficult.” Banks pay a state tax on their profits. Credit unions pay a state tax on their reserves. The Republican-led Senate voted to change that in 2018, but Republicans in the House — led by one of their own G-O-P members — rejected the idea.

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