Reynolds signs historic tax relief
Iowa Gov. Kim Reynolds last week signed a comprehensive tax measure that will shift funding for mental health services away from property taxes and to the state budget over the next two years. The measure, a key focus of Farm Bureau during the 2021 legislative session, will result in dollar-for-dollar tax relief for Iowans who have seen their property taxes more than double in the past 18 years.
“In Iowa, we are cutting taxes and helping Iowans keep more of their hard-earned money,” Reynolds said at the bill signing at YSS, a youth mental and behavior services agency in Ames. “With this legislation, we also provide steady and reliable funding for our state’s mental health system while making significant investments in housing, workforce and child care.”
Iowa Farm Bureau Federation (IFBF) President Craig Hill applauded Reynolds’ leadership as instrumental in passing the mental health funding shift, which will save the state’s property taxpayers more than $100 million per year. “Without Gov. Reynolds' tireless advocacy, this important and comprehensive tax reform measure would not have come to fruition,” he said following the bill signing ceremony.
The shift away from relying on property taxes for mental health funding has long been a priority issue for Farm Bureau members, Hill noted. “We appreciate Gov. Reynolds’ hard work and leadership in making this happen to help create a more equitable funding system for mental health services in our rural communities,” he said.
Iowa has been one of only a few states that uses property taxes to fund mental health services. That has helped to create inequities, with Iowans in unincorporated areas paying a much larger share to support mental health services than those living in incorporated areas.
Farm Bureau members, Hill said, strongly believe property taxes should be used only to provide essential services linked to the property, such as police and fire protection and rebuilding infrastructure.
Other tax improvements
The newly signed measure, called Senate File 619, also makes other Farm Bureau-supported changes to state income tax policy to benefit all Iowans. It removes earlier-imposed triggers from the 2018 income tax reform bill, making it effective Jan. 1, 2023; phases out the state’s inheritance tax over the next four years; and couples Iowa’s tax code to the federal tax code for bonus depreciation.
In addition, the comprehensive tax measure includes improvements to the state Beginning Farmers Tax Credit program. Changes include increasing the number of years a landowner can rent to a beginning farmer participating in the program and allowing a landowner to rent to multiple beginning farmers.
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