House tax plan advances amid bipartisan opposition to Senate’s mental health change

By: - May 6, 2021 3:32 pm

The Iowa Capitol dome. (Photo by Iowa Capital Dispatch)

Democrats in the Iowa House lined up behind Republicans’ tax proposal for one main reason, Rep. Charles Isenhart said Thursday: “It’s not the Senate bill.”

Lawmakers on the House Ways and Means Committee voted unanimously on Thursday to advance the House tax proposal. The bill would remove triggers for the 2018 tax cuts, phase out the inheritance tax and introduce new tax credits for child care and workforce housing.

Rep. Dustin Hite, R-New Sharon, called the 27-division bill “wide-ranging.”

The plan stands in opposition to a proposal by Gov. Kim Reynolds and Senate Republicans. While several parts of the proposals match up, the Senate plan would fund mental health from the state general fund, rather than property taxes. It would also phase out the “backfill,” a 2013 legislative promise that the state would partially make up for local government losses after cutting property taxes.

All told, Reynolds said her Senate-approved proposal would result in a $400 million tax cut for Iowans, plus a $100 million reduction in property taxes due to the mental health funding change.

Some mental health advocates have expressed enthusiasm for the governor’s plan. But House Democrats said in committee they didn’t approve of the proposed state-funded mental health system, which Isenhart, D-Dubuque, called a “potentially radical change.”

Read more: What are the differences between the House and Senate tax proposals?

Another motivator for House Democrats: The session is already in overtime, with no signs of stopping soon. Isenhart said he agreed with House Speaker Pat Grassley, R-New Hartford, that there was not enough time left to consider the ramifications of shifting the mental health funding system.

“So on day 115 of a 110-day legislature, I think that’s another reason why our bill is preferable to the Senate bill,” Isenhart said.

The House Ways and Means Committee voted 22-0 to advance the proposal, marking it eligible for floor debate.

Lawmakers must compromise on a state budget before adjourning for the year. Senate Majority Leader Jack Whitver, R-Ankeny, told the Sioux City Journal that it would be “several weeks minimum” before lawmakers resolved the tax and budget proposals.

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Katie Akin
Katie Akin

Reporter Katie Akin began her career as an intern at PolitiFact, debunking viral fake news and fact-checking state and national politicians. She moved to Iowa in 2019 for a politics internship at the Des Moines Register, where she assisted with Iowa Caucus coverage, multimedia projects and the Register’s Iowa Poll. She became the Register’s retail reporter in early 2020, chronicling the impact of the COVID-19 pandemic on Central Iowa’s restaurants and retailers.