Condition of the State: What could impact the communities we cover

In her first, “Condition of the State” address Iowa Governor Kim Reynolds said the focus on tax reform will start with individuals in 2018 and then a bipartisan task force will be formed to analyze state tax credits and make recommendations before the start of the next legislative session.

“It may take a multi-year effort, but we are going to completely reform our tax code,” Reynolds said. “We’re going to make Iowa more competitive, and we’re going to continue to be a place where businesses—big and small—want to grow and expand.”

This was the first time in Iowa’s history that the “Condition of the State” address was given by a women Governor; She spoke for nearly an hour Tuesday morning.

According to Reynolds, tax reform should also include the end of the federal deductibility and a focus on rate reductions. The provision known as federal deductibility allows Iowans to deduct what they pay in federal income taxes from their state liability, but when federal taxes go down, Iowans are able to make fewer deductions and end up paying more in state taxes.

“Because of an outdated provision in Iowa’s tax code, Iowans will see a tax increase if we don’t pass tax reform at the state level,” Reynolds said. “Therefore, I will be proposing a tax reform package that significantly reduces rates, modernizes our tax code, eliminates federal deductibility and provides real tax relief for middle-class families, farmers, and small businesses.”

The full budget proposal can be found here.

Apprenticeship and rural broadband funding

In addition to tax reform,  Reynolds planned to increase support for apprenticeships as part of her Future Ready Iowa initiative by including an additional $1 million in her budget for a Registered Apprenticeship Program.

According to the FY 2019 Budget Report, the Registered Apprenticeship Program “will encourage small to mid-size businesses to start or grow Registered Apprenticeships, which allow Iowans to earn while they learn.”

This funding will be in addition to the $3 million Reynolds budgeted for the existing Apprenticeship Training Program.

Reynolds also announced an initiative—that Lt. Governor Adam Gregg will lead—to focus on expanding access to broadband in rural Iowa and will draw funding from the Rebuild Iowa Infrastructure Fund.

“This new initiative will promote investment and connect rural Iowa by expanding broadband capabilities in every corner of our state,” Reynolds said.

She recommended the initiative receive $2.6 million in FY 2019.

Reynolds also said she hopes to:

  • Sign a water quality bill before any other legislation
  • Individualize health care
  • Increase the use of the Prescription Monitoring Program to reduce opioid addiction
  • Invest in education/job training

State Appropriations for select Departments in FY 19 (proposed)

  • Office of Chief Information Officer – $5,900,000
  • Department of Cultural Affairs – $7,204,162
  • Economic Development Authority – $49,431,188
  • Iowa Telecommunications & Technology Commission – $0
  • Iowa Workforce Development – $19,176,628

Morgan Garner contributed to this story.