By O. Kay Henderson (Radio Iowa)
Governor Kim Reynolds has not announced whether she intends to seek reelection in 2026, but she is giving a few hints about her 2025 policy agenda.
Reynolds held a campaign fundraiser last month and talked about her record so far. “I’ve signed five tax cuts into law over the last six years, lowering taxes for every single Iowan who pays them,” Reynolds said, to cheers. “January 1, we’re going to a flat, 3.8% flat and fair tax.”
Two years ago, at a Republican Governors Association forum, Reynolds said her goal was to eliminate the state income tax by the end of her current term, which ends in early 2027. However, Reynolds has indicated her focus in 2025 will be on a reducing tax that’s collected by local governments, like cities, counties and school districts.
“We’re working on property tax,” she told the Westside Conservative Club on October 30. “We know we still have work to do there, so hang in there. We’ve shaved off $250 million, but we know we still have work to do.”
The latest report on state tax revenue indicates the state will take in a billion dollars less in income taxes over a 24 month period due to the tax cuts Reynolds has signed. “But you know what the other component of that is you have to keep spending in check,” Reynolds said. “You can still invest in priorities that are important to Iowans…you just have to do it responsibly.”
Reynolds signed a law this year that eliminated 67 state boards and commissions and merged others. In 2023, she consolidated state agencies and she suggests there’s more to come. “We’re not done. First of all, the culture that it’s creating, just that kind of environment and the collaboration between my agencies — it’s exciting,” Reynolds said. “It’s generating new energy and a passion to really look at how else we can change government and make it more innovative and just really responsive to the people that we serve, so that fires me up and believe me, there’s so much opportunity there.”
Democrats in the legislature say the tax cuts Reynolds has already signed will lead to cuts in state services and warn a reduction in state support of public schools is ahead when the next round of income tax cuts take effect. During her remarks at the Westside Conservative Club in late October, Reynolds addressed the criticism of her tax cuts. “We can sustain them and we’re doing it in a responsible manner,” Reynolds said. “Believe me, I am very conservative…I am not going to be the governor who cuts taxes to raise them again.”
Reynolds indicated the state has enough money as a cushion in case there is a downturn in the economy and a more dramatic decline in state tax collections than has been predicted. There’s a billion dollars in the state’s cash reserve plus a $2.5 billion budget surplus. There’s also $3.75 billion in the state’s Taxpayer Trust Fund.
