Several weeks after the conclusion of the spring 2018 semester, Iowa Republican governor Kim Reynolds signed a bill that slashes Iowans’ state tax revenue. The governor penned the legislation into law at a signing ceremony in MobileDemand, a manufacturer of rugged electronic devices based in Hiawatha, IA.

A beaming Reynolds announced to the crowd at the signing, “I signed this bill for every Iowan who works hard to earn a paycheck and deserves to keep more of it.”

The bill, Senate File 2417, will reduce the state’s income by $2.1 billion over the next six fiscal years. The reduction in an individual’s taxes varies on income.

According to the Iowa Department of Revenue; a single Iowan making $24,000 a year can expect to save $59 annually, a 7.9 percent cut. A single person making $87,000 will save about $271 a year, or 6.1 percent.

The income tax cuts are coupled with new sales taxes on video streaming services, digital video rentals, rideshare services and taxis in what lawmakers describe as an effort to modernize the Iowa tax code.

Republicans lauded the bill as a boost to Iowa families and businesses while Democrats argued that reducing the state’s income will force cuts to numerous state services.

Cedar Falls Republican Walt Rogers of Iowa House District 60 said in his newsletter of an earlier draft of the bill, “The Middle Class Tax Relief Act will reform Iowa’s tax code to make it fairer, sustainable, and built for the 21st century. The Middle Class Tax Relief Act will reduce the state tax burden on Iowans by $1.3 billion over 5 years while protecting budget sustainability in future years.”

Cedar Falls Democrat Bob Kressig of Iowa House District 59 attacked the legislation in his own newsletter, writing, “On the last day of session, Republican lawmakers pushed through a $2.7 billion tax proposal that disproportionately benefits the wealthy and special interests…  The budget mess already means Iowans are being shortchanged with fewer services for victims of domestic violence, fewer nursing home inspections, and little for public schools.”

Cedar Falls Democratic senator Jeff Danielson commented during a forum at the beginning of the year, “It will mean deficits as far as the eye can see.”

The reductions in state revenue come as UNI and other state universities and colleges face continuing financial uncertainty. UNI’s appropriations from Des Moines have been cut numerous times in recent years; the cuts have largely been paid for by reducing UNI’s services and increasing student’s tuition.

Some sudents were concerned that the bill wouldn impact higher education funding. Former Northern Iowa Student Government (NISG) Vice President and former member of the NISG Legislative Liaison Team Tristan Bernhard said to the NI, “I think the shortfall in revenue that the tax cut projects to create for the state could be extremely concerning for both the quality and affordability of education in Iowa. I will be interested to see what action is taken by the legislature to ensure that this cut doesn’t come at the expense of the state’s students or working families.”

Senior Public Administration and Political Science major Casey Harm told the NI, “The simple idea… was that this would cultivate new economic development… In reality, Iowa’s unemployment is at 2.6 percent which means we are already at full employment and simply don’t have the workforce for a new ambitious wave of economic development. Our state will not make up this massive loss in revenue, and our institutions will not be able to operate as intended without it. It is likely that the state would have to cut funding to higher education in the near future which could potentially result in tuition hikes and a larger amount of debt being accumulated by students.”