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Reynolds, Gregg pitch 1-cent sales tax in Toledo

CONTRIBUTED PHOTO Gov. Kim Reynolds and Lt. Gov. Adam Gregg tell constituents in Toledo about a proposed sales tax increase.

Iowa Governor Kim Reynolds said she has no interest in raising taxes.

She hosted a town hall at the Reinig-Toledo Civic Center last week.

Reynolds and Lt. Gov. Adam Gregg were there to pitch the Invest in Iowa Act — their vision of a continuation of the effort they say will “modernize the state’s tax structure over time.” Reynolds signed the legislation in 2018.

Among their aims is to make the state a place “where young Iowans will choose to continue to live” and attract more people to the state, Reynolds said.

The governor identified three main goals they are to implement:

• Income tax relief

• A fully funded mental health care system

• Full support of the Natural Resources and Outdoor Recreation Trust Fund. Creation of the conservation-related fund was approved by Iowa voters as a constitutional amendment in 2010.

To pay for the three points, Reynolds and Gregg are calling for a 1-cent Iowa sales tax increase which is projected to raise $540 million in new state revenue.

They maintain the effort will result in an average 10 percent income tax reduction next year, offsetting the sales tax increase. It will cut property taxes by reducing the $47.28 per capita tax mental health levy imposed in each county to $12.50, Reynolds said.

It will also lower the highest tax rate from 8.5 percent to 5.5 percent along with reducing the total number of Iowa tax brackets from the current nine to four by the year 2023.

More funding for regional mental health care will be an expansion of the Childrens Mental Health System established by Reynolds with what was described as “overwhelming” legislative support last year. A total of $80 million or more is designated for added state funding for the program.

In addition, Reynolds made the case for the natural resources trust fund which has not been funded. She pointed to what she said was a strong effort for water quality improvement among the key points of the program.

The information provided stated three-eighths of the 1-cent sales tax would go toward sustaining the trust, just shy of $100 million for water quality and $52 million would go toward outdoor recreation.

Other program points listed for expanded tax relief as part of the package include:

• Repeal of ester excise tax

• Exemption of diapers and feminine hygiene products from sales tax

• An increase for net income eligibility from $45,000 to $90,000 for Early Childhood Development and Dependent Care tax credits.

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