Former President Herbert Hoover argued that governments have “an instinct of a vegetable,” meaning “they keep spreading and growing.” Governor Kim Reynolds echoed Hoover when she stated, “like any large organization, government is marked by bureaucracy’s natural tendency to grow. If that growth isn’t constantly checked and rechanneled toward its core function, it quickly takes on a life of its own.”
This is why Governor Reynolds has made reforming government a priority. Fiscal conservatism is not just about pro-growth tax reform—it must also include limiting spending and reducing the size of government.
Fiscal policy has been a central part of Governor Reynolds’ agenda: “We reduced taxes—saving Iowans more than $24 billion over 10 years. No more tax on retirement income. No inheritance tax. And starting this month [January 2025], Iowans get to keep even more of the money they earn, with a 3.8% flat tax—a far cry from the 8.98% of six years ago,” stated Governor Reynolds. Iowa’s corporate tax rate, once the highest in the nation at 12%, has been reduced to 7.1% and will continue to decrease until it reaches a flat 5.5%.
Not only has Iowa eliminated the progressive income tax, but it also reduced the top tax rate by almost 60 percent.
These reforms are grounded in conservative budgeting, which prioritizes spending control and government efficiency. These efforts have not only ensured budget stability—with surpluses, full reserve accounts, and a Taxpayer Relief Fund with a $3.6 billion balance—but also enabled responsible tax reductions.
During her Condition of the State address, Governor Reynolds launched Iowa’s DOGE task force, modeled after her efforts to reform state government. “I like to say that we were doing DOGE before DOGE was a thing…,” stated Governor Reynolds.
Before forming the DOGE task force, Governor Reynolds secured passage of two major state government reform laws—the first major overhaul of state government in 40 years.
“When we started our alignment work in 2022, state operations hadn’t been reviewed in forty years – and it showed. Layers of bureaucracy had accumulated over decades, expanding government beyond its core function, keeping us from working effectively as one team, and hampering our service to Iowans. We were too big, too fractured, and too inefficient,” stated Governor Reynolds.
Both government reform measures worked to limit government and improve service delivery. “We’ve transformed the way our State interacts with citizens, businesses, and entrepreneurs,” Reynolds explained. “We consolidated agencies (from 37 to 16), eliminated 1,200 burdensome regulations, remade legacy systems, centralized programs, and leveraged technology.” These reforms have already saved taxpayers $217 million, exceeding original projections within the first 18 months.
Before the reform, Iowa had 256 boards and commissions; now, 83 have been eliminated and others consolidated. In initiating this reform, Governor Reynolds asked fundamental questions that all policymakers should consider at every level of government:
“What is the core mission of each agency? How is it funded? How is it staffed and what does it own? Are the agency’s programs working? How did the structure of the agency compare to other states? Where is there duplication or misalignment? What can we cut?” asked Governor Reynolds. These questions align with the principles of priority-based budgeting.”
Governor Reynolds also understands that conservative budgeting is the foundation of sustainable tax reform. “But it’s not enough just to cut taxes. You have to make them sustainable, especially if you want to keep bringing them down. The growth they create helps, but you also have to keep spending in check,” argues Governor Reynolds. This is a lesson many states and the federal government have yet to learn.
Looking ahead to the 2026 legislative session, Governor Reynolds has indicated that property tax reform will be a priority. Across the country, reforming property taxes has proven to be one of the most challenging tax policy efforts. Nevertheless, Governor Reynolds recognizes that local governments must embrace fiscal conservatism and undertake reform if meaningful property tax relief is to be achieved.
If the goal is tax relief, then spending must be addressed. Regardless of the type of tax, it is government spending that drives high taxation.
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