OTTUMWA — Gov. Kim Reynolds got a warm welcome on a snowy day as she sought to build support in Ottumwa for the Invest in Iowa Act.
Reynolds said the act can lower Iowa’s income tax rate, improving the state’s ranking nationally from 42nd to 20th, while creating stable funding for issues like water quality and conservation.
The plan cuts the state’s top tax rate from 8.5 percent to 5.5 percent by 2023. The number of tax brackets shrinks, too, from nine currently to four in 2023.
“It significantly reduce the highest tax bracket and then collapses the number of brackets that we have, simplifying and making it more transparent,” Reynolds said.
Reynolds cast the move as Iowa’s best bet as states jockey for economic opportunities. She said the revisions to the state’s tax code should make Iowa more attractive for businesses looking to move or expand.
Funding for the state’s natural resources and outdoor recreation is also in Reynolds plans for the state budget. She said the trust fund has not had a stable source of funding. So a one-cent hike in the state’s sales tax would produce reliable revenue.
The plan would bring in $100 million per year for water quality and $55 million for outdoor recreation and conservation, Reynolds said.
“Urban or rural, producer or consumer, the quality of our water and the health of our soil … every one of us has a responsibility,” she said.
While Reynolds’ main focus was on the Invest in Iowa Act, County Attorney Reuben Neff asked whether her plans included funding for mental health. It’s not the first thing people think of with his office, but Neff said the need is real.
“We know a lot of crime is related to mental health,” he said, giving the example of one person who repeatedly knocked out a neighbor’s windows on the belief they were being used to spy on that person.
Reynolds agreed that mental health funding is critical for Iowa and said those funding options are being examined. She cautioned that striking the right balance on funding was likely to be a learning process.