Reynolds Wants to Give Iowans a Tax Break in 2018 … If the State Can Afford It

DES MOINES, Iowa  --  On Tuesday Governor Kim Reynolds will deliver her first ever Condition of the State address.  On Thursday she offered a preview of what Iowans will hear from her and what she expects to hear from lawmakers.

Tax cuts

Reynolds met with reporters for an hour at the State Capitol on Thursday to look ahead to the 2018 legislative session which begins on Monday.  Reynolds says her top priorities for the session are to find ways to make Iowa more competitive in the business world and to put more money in the pockets of Iowans.  Both of those can be accomplished with tax cuts, but the Governor knows it is not that easy.

"I think we have to be careful about reducing taxes too much and not reducing spending," Reynolds said, "We know there are some pitfalls that we can fall into and we want to avoid that."

She specifically promised that Iowa won't go down the same path as other states who learned you can cut taxes too much.  ""We don't want to be Kansas, we don't want to be some of these other states and we're not going to be", she says.  In 2017 Kansas Republicans were forced to repeal a series of tax cuts they'd passed previously after they failed to spark new spending or attract new business and left lawmakers unable to pay the state's bills.

Minimum Wage

Reynolds says she doesn't expect the Republican controlled House and Senate to approve a minimum wage increase in 2018.  In 2017 they passed a bill that made it illegal for individual counties and cities to raise their own minimum wages.  All of Iowa's neighboring state's pay a higher minimum wage than we do except for Wisconsin that promises the same $7.25/hour.  Reynolds says she is more focused on getting Iowans into high-paying careers that she says will all Iowans to "feel good about themselves" unlike minimum wage positions.

Water Quality

Reynolds says she still wants the first bill she signs as Governor to be a water quality initiative.  However she cautions that the bill she signs will be a first step and not an overarching bill that tries to solve the state's problems all at once.

"It's really important that when we talk about that being the first bill that I get to sign that its not the end of the conversation," she says, "It's the foundation that should really spark conversations."  She  doesn't expect Republican leadership to pass any bill that would require a tax increase to pay for it.

Governor Reynolds says the quickest way for legislators to get a bill to her would be to find common ground between two bills the House and Senate passed separately last session.  “I think to get something done we need to focus on a couple of bills that both chambers have seen and figure out where that compromise is at and move something forward."

Privatized Medicaid

Governor Reynolds says despite critics and mounting issues the state will not abandon its privately managed Medicaid system.  She admitted that the system got off to a bad start and still isn't perfect but she isn't abandoning it.

"We've made mistakes.  The rollout was not perfect.  But its the right thing to do.  You're going to see more and more states move in that direction," she says  "We have to recognize and admit the mistakes that were made and then look at ways that we can move forward."  The state has hired a new Medicaid director who Reynolds says is already working to solve problems.

Deappropriation Bill

Governor Reynolds says the state revenue is growing again, but the situation is too volatile to make concrete promises right now.  That includes the current fiscal year that ends on June 30th.  Reynolds says she is not yet calling for a "deappropriation bill" like the one lawmakers were forced to pass last year but she says agency heads have been warned it is a possibility.