Governor Kim Reynolds

Gov. Kim Reynolds takes questions from Oskaloosa residents about the Invest in Iowa Act.

OSKALOOSA – Gov. Kim Reynolds dropped in on Oskaloosa residents Wednesday to reel in support for the Invest in Iowa Act, a bill that would impose a 1-cent increase in sales tax.

To offset the sales tax increase, Reynolds said the act would reduce the overall tax burden for Iowans by lowering Iowa’s income tax rate and exempting additional items from sales tax. The latest items to see an exemption on sales tax are diapers and feminine hygiene products, currently on the list are medicines, prescriptions, daycare expenses and food.

“It is an investment in our future, it is an investment in those who are our future,” she said. “ I’ve been there, I know what it’s like to try to make ends meet. I was checking at a grocery store trying to raise three daughters, so I get what it means to live off of a small paycheck. We always want to be conscientious of that when we’re looking at how anything that we [do] impacts Iowans.”

Reynolds said, if implemented with the tax component, the act would make Iowa more competitive and improve Iowa’s tax rates ranking by taking Iowa from 42nd to 20th in the nation. Other notable changes that Iowans could expect to notice from the implementation of the income tax plan is that eligibility for the early childhood tax credit would expand from $45,000 to $90,000 and by 2023 the highest tax rate in the state would reduce from 8.5 percent to 5.5 percent. Also by year 2023, the number of tax brackets would decrease from nine to four.

The increase in sales tax is projected to bring in $540 million annually; that would in turn fund the mental health crisis in the state, the Natural Resources and Outdoor Recreation Trust and efforts toward improving water quality Iowa. Reynolds said in 2010, Iowans voted to create the Natural Resources and Outdoor Recreation Trust Fund for the purpose of protecting and enhancing water quality and our natural resources. Fast forward to 10 years later, 2020, the fund is yet to be funded.

“Under the plan, it would fund the trust fund and it would put nearly $100 million dollars per year to be allocated toward water quality efforts, $55 million per year would be allocated to conservation and outdoor recreation, the Nutrient Reduction Strategy Program that was put in place several years ago, would be the foundation of the water quality efforts.”

Reynolds said, while the act focuses on three areas of concentration, the overall goal of the Invest in Iowa Act is to improve the quality of life in Iowa, helping bring in more residents to the state.

“Whether it’s tax cuts or water quality or mental health funding, the Invest in Iowa Act will bring meaningful change to Iowans in the very first year,” Reynolds said. “It will improve our quality of life and it will help us retain and recruit the next generation of Iowans to this great state.”

Tiffany McDaniel can be reached by phone at (641) 660–9659, by email at or on Twitter @tmcdaniel_osky.

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