Last week, I introduced you to my personal belief on tax policy and why moving to a more consumption-based policy like sales tax and away from reliance on income and property tax is smart for Iowa. I laid out very logical reasons using statistics and data. As I mentioned, The Invest in Iowa act that addresses these topics is very detailed, and I will never be able to cover the entire bill adequately in one short newsletter. This week, I will look at two portions of the Governor’s bill: childcare tax credits and mental health funding.
At the top of the list of priorities for the Governor and the legislature, this year are workforce development and mental health.
Many parents in Iowa are burdened with finding and funding childcare. Unfortunately, there is a childcare shortage in the state, and many face long waitlists and potentially inadequate care. These challenges cause our workforce to suffer, because many times, one parent is unable to work due to the cost of daycare.
The Governor’s plan takes a proposal passed by the House last session by doubling the Iowa income limits and makes the credits available to taxpayers with net incomes of less than 90,000 dollars. A taxpayer can claim only one of these credits per dependent. This proposal will encourage new daycare businesses and bring Iowans back into the workforce by having good quality, affordable daycare for children.
Currently, mental health funding is paid for by each county with a special levy on your property taxes.
The Governor’s proposal reduces the county levy to $12.50 per capita, and the state would cover 70% of mental health funding using sales tax dollars. This would reduce property taxes in the state by $77.37 million.
With the increased state funding to the Mental Health Disability System (MHDS), the Department of Human Services (DHS) will have the authority to ensure that regions/counties are implementing core service requirements of the adult and children’s mental health system. If regions/counties are not in compliance, DHS may withhold up to 15% of the state expenditure to the region/county.
I will talk more about the Governor’s proposal in the future, but I also wanted to address school funding. This week, the House passed a K-12 funding package to the tune of 108 million dollars of new funding to our schools. This increase in State Supplemental Aid would increase our State Cost Per Pupil amount to $7,062 of state funding. The following chart shows the total funding to K-12 education in the last 15 years. It is important to look at facts when discussing education and not statements that some are bandying about such as Republicans underfunding education. This chart shows that education has benefited from sound budgeting principles.