Nicole Welle | January 11, 2021

Gov. Kim Reynolds announced Thursday that she is once again pausing the Invest in Iowa Act, a proposal that would fund environmental and mental health programs, due to the effects of COVID-19 on the economy.

Reynolds originally shelved the proposal late last session after the COVID-19 pandemic first disrupted the economy. She said that the program’s one-cent sales tax increase would be ill-advised during a time of economic uncertainty, and she still holds that view. Reynolds has said that she would rather follow up on tax cuts made in 2018 so Iowans can “keep more of their hard-earned money” and cited concerns about the pandemic’s effect on employment and the economy, according to an Iowa Capital Dispatch article.

The Iowa Capital Dispatch previously reported that lawmakers from both parties have opposed the plan, so the Invest in Iowa Act is likely to stall without major revisions if Reynolds ever decides to act on it in the future. Some Republican lawmakers have discussed adjusting tax breaks to create funds for some of the work outlined in the act, but the Invest in Iowa act’s future is unclear.

Reynolds’ original Invest in Iowa proposal would have funded Iowa’s Natural Resources and Outdoor Recreation Trust Fund and improved the state’s mental health programs, and reductions in income and property taxes would have offset the one-cent sales tax increase. Iowa voters overwhelmingly approved the trust fund in 2010 and hoped that it would help to solve Iowa’s water quality issues caused by agricultural runoff and other pollution. However, it is in desperate need of funding as the sales tax increase required to fund it has never reached the debate floor.

The Invest in Iowa plan would have created $171 million a year for water quality, outdoor recreation, and conservation projects. It also would have allowed counties to shift mental health funding from local property taxes to the sales tax. However, Reynolds did not discuss alternative sources of funding for water quality or conservation projects when she announced that she would pause the program on Thursday, and she said that she is currently looking for alternative sustainable funding for mental health services.