Iowa Gov. Kim Reynolds said Tuesday she plans to continue work this year on cutting taxes and consolidating and reorganizing Iowa’s state government systems with a focus on special education, boards and commissions and mental health care providers.

The governor gave her Condition of the State address in the Iowa House Tuesday evening as winter storms swept through the state.

Reynolds started began her speech with a moment of silence for the victims and families of last week’s Perry High School shooting, just as legislative leaders did Monday. She thanked Perry law enforcement and first responders for their service responding to the shooting that killed an 11-year-old student and injured seven others. Among the injured was Principal Dan Marburger, who sustained multiple gunshot wounds while trying to protect students.

“His unflinching bravery saved lives that morning,” Reynolds said. “Dan is a hero, and we pray that he’s soon back where he belongs, with the students who are so lucky to have him.”

The governor laid out her top policy objectives for this year’s session — as well as her budget plan. The proposal includes more than $8.9 billion in appropriations for the upcoming fiscal year, an increase from the more than $8.552 billion appropriated the current budget year. The state’s net general fund revenue would decrease from $9.746 billion in 2024 to $9.637 billion under her proposal – a decline of 1.1%.

In her speech, Reynolds said she aims to ensure taxpayer money is being used effectively and efficiently by state government — which means pursuing legislation to continue projects begun in previous years.

Major changes proposed to Iowa’s special education support system

Reynolds applauded the adoption of Iowa’s Education Savings Account program in the 2023-24 school year. She said the program, which allows students to use taxpayer funds for private school tuition, has increased academic standards at both private and public schools through “competition and choice.”

The governor recommended appropriating nearly $179.2 million from the state’s general fund toward the ESA program for the fiscal year that begins July 1, 2o24. That’s an increase of more than $31 million from the current fiscal year budget estimate for the private-school accounts.

“This session, we must be guided by that same principle once again,” Reynolds said. “Because there’s still a group of students who are being left behind. And there’s yet another long-standing system in need of reform.”

The governor plans to introduce legislation making changes to Iowa’s system of Area Education Agencies (AEAs), nine regional entities that provide special education services for Iowans with disabilities from birth through age 21.

Schools are legally required to provide specialized support as outlined in students with disabilities’ Individualized Education Programs (IEPs). In Iowa, AEA-trained staff provide those services, including speech pathology or physical therapy, to multiple school districts in their region. Under the governor’s proposal, school districts could pursue contracts with private companies or partner with other school districts to hire specific specialists to meet these educational needs instead of AEAs, as currently required by state law.

Reynolds disputed the assertion that these changes constituted plans to close AEAs or cut special education services.

“That claim is categorically false,” she said. “In fact, we are not reducing special-education funding by one dime. We are simply giving control of the funding to those who work directly with your child on a daily basis, and we’re taking special education off autopilot, where it has been stuck for far too long.”

The legislation would not prevent AEAs from closing, but consolidation of the nine agencies could occur in future years.

The proposal also restricts AEAs to only providing special education services in Iowa schools – as well as continuing to provide special and general education services for Iowans in juvenile detention and foster care. Iowa AEAs also currently offer media services, professional training and programs in math and literacy to Iowa schools.

House Minority Leader Jennifer Konfrst questioned the governor’s proposal to eliminate functions by AEAs other than special education, such as assisting students with mental health issues. “And when we think about things like what just happened in Perry, we had AEA professionals on the ground to help with mental health. When there’s a suicide in a school, AEA professionals are the ones who are there,” Konfrst said during an Iowa PBS interview.

Senate Democratic Leader Pam Jochum, D-Dubuque, told reporters the governor’s proposal is another step in Republicans’ move to privatize education in Iowa. Like the private-school funding program in 2023, the changes proposed to the AEAs would have the largest impact on rural school districts, she said, which would likely have difficulties finding the trained staff to fill their student’s individual needs outside of AEAs.

Jochum said her late daughter had a disability and received AEA services from age 2 through 21. Many Iowa families depend on the agencies’ services, she said — which could be more difficult to access under the governor’s proposal.

“This is going to have the biggest impact on rural Iowa — certainly it’ll affect the cities, but we do have professionals in our cities that we can count on,” Jochum said. “… It’s more important in the rural areas ,where they do not have those OT, PT, speech pathologist to actually hire in the local community.”

Reynolds proposes raising teacher salaries

Additionally, the governor proposed a measure to increase teacher salaries. Her plan would increase the minimum starting salary to $50,000 and set a $62,000 minimum salary for teachers with 12 or more years of experience. The pay increases would require an investment of $96 million, Reynolds said.

“We want younger Iowans to see the teaching profession as something to aspire to,” Reynolds said. “It’s one of the highest callings one can have, so let’s make sure that teacher pay sends that message.”

Konfrst said Democrats support of raising teacher salaries.

“We’re big fans of teachers. We’ve been proposing increasing teacher pay for a long time. So we’re thrilled to see that they’re joining us in that effort,” Konfrst said.

But, she noted, Democrats have questions about the details, including where the money is coming from and who benefits. “Of course, we want to know what about the paraprofessionals and other education professionals in the school, some of whom are earning less than $10 an hour.”

Reynolds calls for mental health care changes, extending postpartum Medicaid

On health care, Reynolds said she aims to improve Iowa’s mental health care and substance abuse services through consolidation. Iowa currently has 13 mental health and 19 substance use regions designated for providing care for Iowans in need and connecting people with long-term care providers.

Mental health advocates say Iowa has a major deficit in mental health care services. Reynolds said the changes to Iowa’s care provider system would allow Iowans to more easily access care.

“Our state is filled with capable professionals who care about getting Iowans the support they need,” she said. “But their talent and dedication are short-changed by a fractured system that makes coordination almost impossible.”

Reynolds proposed consolidating these 32 regions to seven unified behavioral health districts. The Department of Health and Human Services would take control of setting up contracts with care providers in each district, moving Iowa’s Mental Health and Disability Services Regions to an advisory role.

Support Iowans with disabilities would transfer from MHDS to the HHS’s Aging and Disability Services.

Reynolds also said she plans to expand support for Iowans struggling with substance abuse by investing $20 million in Iowa’s opioid settlement funds in drug use rehabilitation, recovery and prevention services.

The governor also said she plans to extend postpartum Medicaid coverage for new mothers from 60 days to 12 months, as allowed under a federal COVID-19 emergency plan signed into law by President Joe Biden in 2021. The governor’s proposal would limit qualification for the program to people with a family income at or below 215% of the federal poverty line, down from the current Medicaid eligibility for postpartum mothers at 380% of the FPL.

Reynolds said she was happy to offer support to mothers and families, adding that “government support is just the first step on the road to lasting self-sufficiency.”

Legislation extending postpartum Medicaid coverage failed in the House in earlier sessions. House Speaker Pat Grassley said he believes Republicans need to have further discussions about maternal health care support, especially after the 2023 special session passing a ban on most abortion after six weeks of pregnancy.

“After last summer when we came in here and took a very strong stance on life … I really think as Republicans we need to engage in a lot of these conversations about after birth as well,” Grassley said. “So my expectation would be that we need to have those continued conversations within the House.”

In an effort to helping Iowans get off of government support programs, Reynolds introduced an initiative called “Thrive Iowa,” aimed at connecting Iowans to churches, private sector entities and community services that provide the assistance they need. The program is based off of “Hope Florida” – a similar state program connecting Floridians with community support systems created by Florida Gov. Ron DeSantis.

Speeding up income tax cuts

The governor announced she would introduce a tax proposal to speed up the process of cutting individual income taxes that began in 2022, with plans to reduce Iowa’s income-tax rate to 3.65% in the current fiscal year – retroactive Jan. 1, 2024. In fiscal year 2025, the rate would fall to a flat 3.5%.

The proposal would save nearly $3.8 billion for taxpayers over the course of five years, Reynolds said. The proposal will help Iowans across the board, she said – citing figures that a family of four with a combined annual income of $78,000 would see tax savings of more than 25% under the proposal, and a single mother with two children making $47,000 would see 42% in savings.

Critics, however, say that the income tax cuts provide larger breaks to wealthy Iowans and reduce state resources for those in need.

Anne Discher, executive director of the nonpartisan Common Good Iowa, said the cuts will make Iowa’s tax system “less fair.” Recent tax cuts have led to reductions in education, health care and public safety services in Iowa, she said, and further cuts will result in the loss of more vital resources.

“It is magical thinking to suggest that we can keep doing big tax giveaways without having to cut services. Anyone proposing a tax cut should say clearly what services they will cut to pay for it,” Discher said in a statement. “An honest evaluation of tax cuts already passed requires waiting to see their full impact.”

Reynolds pointed to Iowa’s $1.83 billion surplus and more than $900 million in reserve funds as proof that the tax reductions are working as intended. Democrats have called for the state to invest surplus funds in Iowa schools and other services, Reynolds said that the surplus shows more room for reducing taxes.

“Let me be absolutely clear: the surplus does not mean that we aren’t spending enough; it means we’re still taking too much of Iowans’ hard-earned money,” she said.

Reynolds’ tax proposal also includes changes to Iowa’s unemployment insurance system and lowering property taxes for commercial child care providers.

Konfrst said a half-million Iowans will get no benefit from Reynolds’ tax proposals and governor offered no ideas to reduce higher costs that many Iowans face. “We didn’t hear anything tonight about affordable housing, about child care, about utilities. We heard none of that. And costs are more than income taxes, right? Everyone’s costs have gone up. It’s not just taxes. How are we going to help everyone out?”

Senate Majority Leader Jack Whitver praised the governor’s proposal, but said Senate Ways and Means Committee Chair Sen. Dan Dawson, R-Council Bluffs, has been working on a separate income tax bill. Whitver said entirely eliminating the income tax is his end goal, but that Senate Republicans are working to ensure the process does not hurt Iowa’s economy.

“We want to go as low as we can,” Whitver said. “We want to do it responsibly, though. And so that’s where it’s just a math problem, as far as what it looks like in the out years. Now, right now, we’re in a really strong position for the next five, six years. But you have to be concerned about the out years as well. And so we’ll continue to look at those numbers and work on that.”

State government reorganization continues

One of Reynolds’ objectives in the 2023 legislative session was the massive state agency reorganization plan, which consolidated the state’s 37 executive-level cabinet agencies to 16. The law, signed by Reynolds in April, included a provision establishing a Boards and Commissions Review Committee to review and make recommendations on Iowa’s system of boards and commissions ahead of the 2024 legislative session.

The committee submitted its recommendations in September, calling for cutting or merging 111 of Iowa’s 256 boards and commissions – a reduction of 43% of existing panels in the state. The governor plans to move forward with the committee’s recommendations, saying many of the boards to be eliminated are “redundant or obsolete.”

The bill will help carry out oversight over these panels, she said, including recommendations to evaluate each board at least every five years.

“Iowans elected us to create and execute policies that carry out their will — not to outsource that authority to others they can’t hold accountable at the ballot box,” Reynolds said. “While many boards and commissions will continue to play an important role, the democratic process is the best way to preserve Iowans’ engagement in their government.”

Recommendations include the consolidation and elimination of multiple health, safety and professional licensing boards and commissions, as well as panels dedicated to cultural groups.

The legislation also would eliminate the gender-balance requirements for boards and commissions that require equal numbers of men and women to serve. Kraig Paulsen, director of the Iowa Department of Management, said during review process that the change was proposed because many boards of professions that skew toward one gender have difficulty fulfilling the requirement.