The sun was shining brightly on March 1 as Gov. Reynolds signed historic tax cuts into law. These tax cuts will be phased in through 2026. When fully implemented, Iowa’s tax reform will create a 3.9% flat individual income tax rate; eliminate state income taxes on retirement income; reduce the corporate income tax; and phase-out special tax incentives in the corporate tax code.
While tax cuts again captured the headlines, the Iowa House passed 36 bills during the eighth week of the 2022 legislative session. Here are summaries for a few of the most noteworthy bills:
- Artisanal Butchery Task Force (HF 2470) – This bill adopts the recommendations of the task force. It requires Iowa Workforce Development (IWD) to add butchery, artisanal butchery and meat processing to the list of high-demand jobs. It also requires the Iowa Department of Agriculture & Land Stewardship (IDALS) to develop a maintain a directory of meat lockers.
- Comprehensive Transition and Postsecondary (CTP) Program Scholarship (HF 2495) – This bill creates a scholarship program for individuals with intellectual disabilities who are enrolled in an approved CTP program in Iowa to help offset costs for the program’s tuition and fees. The College Student Aid Commission will administer this program.
- Last Dollar Scholarship Eligibility (HF 2165) – This bill expands the eligibility of scholarships to part-time students. It also allows flexibility for community colleges to add certain jobs that are in high demand in their area to help meet local needs in their communities.
- Para-Educator Substitute Authorizations (HF 2493) – For the 2021-2022 school year, a para-educator with a substitute authorization may substitute in any classroom in grades pre-K through 12.
- Right to Try (HF 2203) – This bill allows for an off-label use of a drug for patients who are using a ventilator to prolong life. It also revises Iowa’s existing Covid liability protections from civil damages for health care providers and prohibits disciplinary action by their licensing board for the same protected list. Iowa Code 144E makes it clear that Right to Try law does not constitute assisted suicide.
This week the Iowa House passed two bills to improve access to child care for working families. House File 2198 allows 16 and 17-year-olds to provide child care in a center for school-aged children without supervision. House File 2127 allows parents to pay the difference between Child Care Assistance rates and rates charge to families who do not receive assistance.
Additionally, the Iowa Legislature in 2021 passed a bill that Gov. Reynolds signed to address the cliff effect in child care assistance. This law doubles the income eligibility for the child care tax credit for families, increases child care assistance rates by $13.4 million, and expands options for families through non-registered homes.
House File 2317 delivers the largest tax cut in Iowa history!
Here is how Iowa’s new tax law will help everyone who pays taxes:
- Retired Farmer Lease Income Exclusion. Beginning in 2023, a retired farmer’s income from property rental is exempt from tax. This exclusion allows a farmer to rent land to the next generation and not pay taxes on that “retirement” income.
- Individual Income Tax Rates. Provides for a flat tax of 3.9 percent on all taxable income, beginning in tax year 2026. The average tax cut for a taxpayer will be over $1,000. Following are two scenarios of how families can benefit. A single mom with two kids and Iowa taxable income of $25,000 would see a 27% reduction in her taxes. A family of four with two working parents and an Iowa taxable income of $50,000 would pay $1,918 under our current law. With the tax cut, they will save $1,520. This is more than a 20% tax cut for this middle-class, working family.
- Retirement Income Exemption. Iowa Code provides an income tax exclusion for the first $6,000 of retirement income. Beginning in tax year 2023, all retirement income will be excluded from tax. This will especially benefit retired teachers, nurses, and police officers as it includes qualified retirement plans such as IPERS, 401(k)s, 403(b)s, IRAs.
- With this new law, Iowa is the fourth lowest in the nation for individual income tax rate. These tax cuts will provide incentives for Iowans to rejoin the workforce and help Iowans weather the impact of record-setting inflation. I also hope this tax cut package will help attract residents. Let’s roll out the Welcome mat!
Constituents in the Capitol
An Appropriations subcommittee on March 2 unanimously recommended passage of HF 2308, which Rep. Chad Ingels and I sponsored to establish a dairy / milk production innovation and revitalization fund. We enjoyed meeting with representatives from the dairy industry, including Robert Horst from Grand Central Jerseys in Bristow.
Congratulations to Matt Curtis of Wayne’s Ski & Cycle in Mason City for receiving the 2022 Neal Smith Entrepreneur of the Year Award! Pictured from left to right are: Brook Boehmler, Regional Director of the North Iowa Area SBDC; Lori Cooling, Matt Curtis’ fiancé; Rep. Sharon Steckman; Rep. Shannon Latham; and Dr. Steve Schulz, president of North Iowa Area Community College (NIACC).
During Community College Day on March 3, I had the pleasure of meeting North Iowa Area Community College Student (NIACC) Tara Craig from Hampton. Tara plans to continue her studies in Social Work at the University of Northern Iowa.
March 3 was both Small Business Development Center (SBDC) and Community College Day on the Hill. I learned about robotics at North Iowa Area Community College (NIACC). I also met Tara Craig from Hampton, a NIACC student studying to become a social worker. In addition, I attended the Small Business Development Center (SBDC) recognition ceremony.
Congratulations to Matt Curtis of Wayne’s Ski & Cycle in Mason City for receiving the 2022 Neal Smith Entrepreneur of the Year Award!
As always, please contact me about issues that are of interest to you. Feel free to send me a message via my political Facebook page or my legislative email, which is email@example.com.