Constitutional amendment would require supermajority approval for tax increases

Future lawmakers would have a harder time raising taxes under a constitutional amendment that legislators discussed Monday.

The amendment proposed in Senate Study Bill 1207 would require that any bill aimed at increasing individual or corporate income tax rates be approved by at least two-thirds of each chamber. It would also enshrine the Iowa Taxpayer Relief Fund into the state constitution. The fund was created in 2011 to use, for tax relief, any state revenues collected above the estimated Revenue Estimating Conference projections, and lawmakers removed its $60 million cap in 2018.

Senators at a subcommittee meeting Monday heard from lobbyists on the potential impact of the bill. Drew Klein with the conservative group Americans for Prosperity said the measure would be a good way to protect taxpayers from rising costs while ensuring that the legislature still has the means to raise taxes if a crisis or some other need arises.

“It should be harder to take away money from the citizens of Iowa than it is to give it back,” Klein said.

But others argued the measure circumvents democracy.

“Why are the forces behind this so fearful of majority rule?” Mike Owen with Common Good Iowa said. “So lacking in confidence in their own convictions that their ideas need extra protection? So arrogant that they believe their positions demand twice the weight of their opponents’ views? One ‘no’ vote is worth two ‘yes’ votes in this plan.”

Sen. Dan Dawson, R-Council Bluffs, introduced the two-thirds majority requirement in 2022. Owen said the bill did not advance last year, and should not move forward this year because it will prevent future lawmakers from taking action “if there is a mess to clean up at some point” — pointing to a potential drop in state revenue from recently passed tax cuts and the expected loss of federal pandemic relief money.

Sen. Cindy Winckler, D-Davenport, said imposing new limits on the legislature’s ability to raise taxes doesn’t make sense because it denies lawmakers the ability to respond to changes in the economy.

“Our economy is cyclical,” Winckler said. “And we need policies that adjust to that when it is expanding and when it is contracting. And to put something like this in the Iowa Constitution doesn’t give us the flexibility that we potentially would need.”

Dawson agreed with those who said the provision would make raising taxes more difficult in the future. While critics argued that would keep the state from addressing Iowa’s needs, Dawson said raising taxes needs to be harder in order to protect taxpayers from “runaway” government spending.

“I find it perplexing that in the Iowa Constitution we protect monies for highway funds, fish habitats and for trails, but what we don’t do is protect the Iowa taxpayer,” Dawson said. “And that’s what this is about today — putting something in the Iowa Constitution to actually protect the Iowa taxpayer. It should be harder in Iowa to raise tax than it is to cut it.”

The proposal will next be considered by the Senate Ways and Means Committee. Even if it is approved this session, it will still be several years before the changes could be enacted. Lawmakers would have to approve the resolution in two successive General Assemblies and it would then be placed on an election ballot for final approval from Iowa voters.

The most recent changes to the Iowa Constitution were made in 2022, when Iowa voters approved an amendment adding language making it more difficult for lawmakers to pass measures that restrict gun ownership and use.

In 2024, Iowans may also see a constitutional amendment changing the language on the gubernatorial line of succession in situations similar to Gov. Terry Branstad’s early departure from the position to serve as U.S. ambassador to China. House Joint Resolution 3, which clarifies that the lieutenant governor will serve the remainder of the term if the governor leaves office, dies or is removed from office, has passed the full House and the Senate’s State Government Committee this session.