Farm Progress

Gov. Reynolds says water quality, tax reform and health care issues have priority this year.

January 15, 2018

5 Min Read
HISTORIC FIRST: Gov. Kim Reynolds’ first Condition of the State address as governor was also the first ever delivered by a woman in Iowa. She says tax reform this year is a key priority.

Water quality, health care and state tax reform are issues directly impacting Iowa farmers. They will be priorities for lawmakers to work on during the 2018 session of the Iowa Legislature, pledged Iowa Gov. Kim Reynolds in her first Condition of the State address delivered Jan. 9 at the state capitol.

For Iowa, it was the first Condition of the State speech delivered by a woman. Last May, Reynolds became Iowa’s first woman to serve as governor, when then Gov. Terry Branstad left to serve as ambassador of China.

Speaking before a joint session of the House and Senate to start the 2018 session, Reynolds presented themes of opportunity and bipartisanship. She emphasized the importance of having strong rural communities and assured Iowans the condition of the state is strong. But the 43rd governor of Iowa also said there’s plenty of work to do as the 2018 legislative session is now underway.

Water quality funding top of list
Reynolds expressed her support for quick approval of long-term water quality funding by the Legislature this year. “Urban and rural stakeholders have worked collaboratively and made great strides” in addressing the goal of having improved water quality, Reynolds said. “My hope is that a water quality bill is the first piece of legislation I sign as governor.”

She added, “Let me assure you, passage of this monumental legislation doesn’t mean water quality discussion will be over. Rather, it ignites the conversation to implement and scale the practices that will continue to make an impact on water quality.”

Securing a long-term source of funding is needed, as well as increasing the amount available, Reynolds said. Cost-share funding for farmers and landowners to help them pay for soil conservation and water-quality improvement practices, along with other water quality efforts, are keys in stepping up the pace to put more cover crop acres and other conservation practices on the land.

Health, taxes also on agenda
A healthy environment depends on healthy Iowans, she said. The rising cost of health care experienced by farmers, families and businesses is an impediment to Iowa making progress on critical issues and will be another focus of the Reynolds administration. While she will continue to urge Congress to repeal and replace the Affordable Care Act, Reynolds says she will press for legislation giving Iowa farmers, small-business owners and their workers access to affordable health insurance.

Also, Reynolds seeks to renew rural communities by expanding access to the Internet and other online services. An initiative led by Iowa Lt. Gov. Adam Gregg will promote investments to expand broadband capabilities in every corner of Iowa. “Our goal,” Reynolds said, “is to keep and bring home Iowa’s sons and daughters and grow the next generation of community leaders.”

Why Iowa needs to reform tax code
Rural Iowa’s renewal will also require families and small businesses to keep more of what they earn. “It may take a multiyear effort, but Iowa needs to reform its tax code,” Reynolds said. The historic federal tax reform legislation passed by Congress and signed into law at the end of 2017 will benefit Iowans. But the impact will be diluted due to an outdated provision in Iowa’s tax code allowing Iowans to deduct federal taxes.

“While deducting federal tax from the state tax you owe may sound like a good thing; it’s not,” she said. “With federal deductibility in place, when the federal government cuts taxes for working-class families, Iowa raises taxes on those same families. When the federal government cuts taxes for farmers and small business, Iowa raises taxes on those same families.”

Reynolds will ask Iowa Legislature to act
In other words, when federal taxes go down, Iowans are able to make fewer deductions and end up paying more in state taxes. Reynolds added, “That’s not just a hypothetical situation. It’s what will happen if we don’t act.”

Reynolds will propose reforming Iowa’s tax code to eliminate federal deductibility and reduce rates. “This is an opportunity to free us from decisions made in Washington, D.C., and simplify our tax code. And more important, Iowans will keep more of their hard-earned money.”

Tax reform to be debated in the 2018 Iowa Legislature should include an end to federal deductibility, a thorough review of state tax credits and a focus on individual rate reductions, Reynolds said. Recent tax reform at the federal level makes state-level changes more critical.

Iowans’ reaction to speech
Iowa Ag Secretary Bill Northey liked what he heard as he listened to Reynolds deliver her speech.

“Gov. Reynolds has been a strong supporter of water quality efforts underway across the state,” Northey said. “I appreciate her making long-term funding a priority in her Condition of the State address. The Iowa Legislature has provided increasing support for water quality over the past five years, including nearly $10.5 million this year. However, the 2018 Legislative session is an opportunity to identify a long-term source of funding to allow us to continue to scale up our water quality efforts.”

Northey added, “I also appreciate the governor’s focus on supporting our state’s rural areas, including expanding broadband access. With agriculture as an important driver, I agree there are tremendous opportunities to see significant growth and economic development generated in our small towns and rural communities.”

Increased funding is just one piece of the effort
Roger Wolf, director of environmental programs for the Iowa Soybean Association, took note of the governor’s water quality reference. ISU has been actively engaged on this issue as it is committed to funding and conducting in-field research on thousands of acres involving hundreds of farmers. Knowledge gained from two decades of work and investment underscores ISA’s continued call for a “watershed approach” to tackling the bipartisan goal of improving water and soil quality, Wolf said.

“Increased funding is just one piece of a much larger effort,” he said. “Watershed planning and implementation follow a simple philosophy: plan the work, work the plan.”

In addition to state funding, “real and long-term improvements in water quality will require shared involvement of rural and urban stakeholders and identifying and unleashing new sources of financing above and beyond what the state can provide,” Wolf said. “ISA will continue to press the merits of the watershed approach to the governor and legislators. There’s no shortcut to success on an issue this complex. If we’re truly serious about long-term and measurable improvement and accountability on water quality, the watershed approach must be part of the discussion and implementation.”





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