WASHINGTON—After Democrats tucked a little-known provision into their $1.9 trillion “COVID relief” bill that would ban states, like Iowa, from cutting state taxes, U.S. Senator Joni Ernst (R-Iowa) is backing legislation to reverse the provision.
“The Democrats' partisan, nearly $2 trillion ‘COVID relief’ package rewards states that have mismanaged their budgets while punishing those who have acted responsibly during this pandemic. It’s no surprise that this rushed bill also prevents states—like Iowa—from cutting taxes for its hardworking taxpayers. We shouldn’t punish states, and our working families, for prioritizing fiscal responsibility, and this commonsense legislation will repeal this ill-conceived provision that infringes on states’ rights,” said Senator Ernst.
“Iowa’s fiscal health is strong and we are cutting taxes so that Iowans can keep more of their hard-earned money, but unfortunately our approach is in jeopardy because of what’s happening in Washington, D.C.,” said Governor Kim Reynolds. “Biden’s stimulus plan is full of reckless spending with strings attached aimed at bailing out mismanaged states and cities. I appreciate Senator Ernst taking the lead on the State Fiscal Flexibility Act to help prevent the federal government from slowing down Iowa’s economic recovery.”
The Democrats’ partisan, $1.9 trillion “COVID relief package” they passed earlier this month included a $350 billion bailout for states, rewarding those with poor fiscal management and punishing those who operated responsibly during the pandemic. However, they added a little-known provision that also punishes states for providing tax relief.
Ernst is cosponsoring the State Fiscal Flexibility Act, which would eliminate this provision, giving power back to the states to determine what fiscal policies will best serve their citizens.