Taxes were the main topic of discussion Friday at the first Greater Burlington Partnership forum of the 2022 legislative session.
Representatives Dennis Cohoon (D-Burlington) and David Kerr (R-Morning Sun), who represent the 86th and 88th districts, respectively, fielded questions from members of the Greater Burlington Partnership.
An attendee asked Kerr whether he would be in favor of eliminating the state income tax, as has been done in Florida. Kerr said he thought the Legislature was heading in that direction, but there is still work to do if that is the goal.
Cohoon cautioned that eliminating the income tax does not mean eliminating taxes, as the money lost to the state would have to be made up in other ways.
"What states are considered to have good tax policy?" Cohoon asked attendees.
He said some states that have greatly lowered their income taxes, such as South Dakota, have cut services as a result. But Cohoon said the state still needs to be able to pay its bills. In the short term, it might seem like a good idea, he said, but what needs to be considered are the long-term consequences of eliminating a major source of state income.
Both legislators said they would be willing to decrease the state's business tax. The top rate sits a little below 10%, which is one of the higher in the nation. The Chamber suggested an 8% tax rate may be more appropriate and would make it easier to attract businesses.
The state doesn't know what its revenue is going to look like for Fiscal Year 2023, which will have to be known before any budget decisions can be made. Those numbers won't be out for another week, but Cohoon knows that the income that the state had last year was 16% higher than for FY21, though much of this came from the federal government.
While the state is looking at a surplus in some areas, Kerr thinks Iowa is going to have to consider how to fund development of roads without the taxes generated from gas sales.
"Electric vehicles will need to be worked out for road use taxes," he said.
Build Back Better and the Biden Infrastructure bill
Representatives for U.S. Sen. Joni Ernst and U.S. Rep. Mariannette Miller-Meeks were also present at the Chamber's event.
Chamber members had questions about the two major bills by Democrats, the Biden infrastructure plan that passed Nov. 15, and the "Build Back Better plan," which has passed out of the House and is now in the hands of the Senate.
"There are thousands of pages and lots of bills contained within the Build Back Better plan. She supports some of it," said Joe Krenzelok, who works for Ernst.
An estimated $600 million of that bill will come to Iowa.
Cohoon said it's difficult to know how the state can actually spend the money it is due to receive. Federal money often comes with rules, making it premature to say where he thinks the money should go to.
"I would hate to see it all go to Polk County, Johnson County, some of those bigger counties," Cohoon said. "I am tired of hearing about Polk County."
Neither the Republican nor the Democrat caucuses have met to discuss their priorities for this year. Kerr said the Republicans will meet Dec. 16, after the revenue numbers have been released for the state. Meanwhile, the Democrats will meet Saturday. Cohoon said the Democrats have a handful of issues they are hoping to persuade a few Republicans to join them in fighting for.
Republican support would be critical for Democrats to pass any part of their agenda, as Republicans hold a majority in both houses.
The next "Eggs and Issues" forum will be held at 8 a.m. Jan. 14. The forum is open to members of the Chamber of Commerce and posted online after the event.
This article originally appeared on The Hawk Eye: Taxes take center stage at Burlington Chamber forum