This week we released budget targets for the fiscal year starting July 1, 2022. These targets outline the plan for the Senate to spend taxpayer money on all the functions of state government, but three areas dominate those expenditures: public safety, education, and health care.
Education receives the majority of the increase in funding this year and a majority of the state budget. K-12 education will receive nearly $160 million more in funding, ensuring reliable, sustainable increases for public schools. This budget outline also includes $71 million for mental health funding and the complete elimination of the property tax levy for mental health.
The total budget plan for next year is slightly more than $8.2 billion. This amount is the same as Governor Reynolds proposed earlier this year, funds reasonable increases to state government, and plans for sustainable funding increases in future years. It keeps billions in reserves and only spends 90 percent of available revenue.
Keeping spending under control makes sure the largest income tax cut in Iowa history is sustainable. The Senate tax cut plan implements a flat 3.6 percent tax rate and will save Iowataxpayers an average of nearly $1600 when fully implemented. It eliminates taxes on pensions, reforms the corporate tax rate to make it flatter and fairer, and provides retirement relief for Iowa farmers.
These tax cuts improve Iowa’s income tax rate from the eighth highest rate to the fourth lowest. It puts the state on the path to eliminate the income tax and eases the burden of government on hard-working Iowans. A lower tax rate will make Iowa more competitive in the global economy as states compete for jobs and people.
The reckless policies in Washington, D.C. have created the worst inflation crisis in four decades. We will not blow out state spending, only making the inflation problem worse. Instead, we will continue to provide predictable and reliable increases to state government. The focus of the Iowa Senate is on cutting taxes to ensure families keep more of what they earn and ease the inflation burden caused by spendthrift D.C. Democrats.
