Transcript of Senate Hearing in the US with IOWA Governor Kim Reynolds regarding Government efficiency – February 2025.
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Transcript of Senate Hearing in the US with Governor Kim Reynolds regarding Government efficiency – February 2025.
First, let me thank Congressman Nunn for your kind words and thank you for your service.
Chairman Comer, Ranking Member Conley, Members of the committee, thank you for giving me the opportunity to testify today. Since this hearing is about government efficiency, I'll get right to the point. Iowa was doing DOGE before DOGE was a thing.
When I was elected to office in 2018, our tax structure was uncompetitive. Our top income tax rate was 8.98%, one of the highest in the nation, as was our 12% corporate rate.
Antiquated state policies made our tax code complex and hard to reform. Soon after President Trump signed TCJA into law, I signed legislation that eliminated federal deductibility, cut rates across the board, provided for additional reductions in future years, and reduced the number of income tax brackets.
After four more historic reforms, Iowa taxpayers today pay a flat income tax rate of 3.8%. Our corporate rate is moving to a 5.5%, and we've eliminated tax on retirement and inheritance income.
Over 10 years, Iowans will save an estimated $24 billion in a state with an annual budget of about 10 billion. But it's not enough just to cut taxes. You have to make sure that they're sustainable, especially if you want to keep reducing them. The growth they create helps, but you also need to keep spending and government in check, and I've worked closely with our General assembly to do just that.
In fact, the Cato Institute has ranked Iowa the most fiscally responsible state in the country for three years running.
But that wasn't always the case. When we started our alignment work in 2022, state operations had not been reviewed for 40 years, and it showed layers of bureaucracy had accumulated over decades, expanding government beyond its core function. We were too big, too fragmented, and too inefficient.
One example became clear during COVID where the separation of our public health and human services departments. We merged them into the Department of Health and human services in 2022, the first big step in our work to align state government.
It was a successful proof of concept and a roadmap as we saw similar misalignment across state government.
Well, we had 11 separate state agencies, operating workforce programs, 136 professional licensing functions were spread across 11 agencies. Our administrative code had ballooned to more than 20,000 pages with 190,000 restrictive terms.
At one point I discovered that the state owned a cow calf operation, and to make matters worse, it operated at a loss.
Given our limited staff and scope of the initiative, we partnered with an outside firm while bringing agency directors and their staff into the discussion early.
And we ask the hard questions that bring about accountability and change. What is the core mission of each agency?
In 2023, we eliminated 1300. We introduced, excuse me, a 1300 page bill that passed with only one technical amendment and took effect less than a year after we began the process.
I also initiated a moratorium on new rulemaking and ordered a comprehensive review of all rules already on the books.
Together, These actions cut 21 agencies from my cabinet, eliminated 600 open positions, removed 1200 regulations in year one, and identified 4700 acres of state owned farmland to sell.
Nearly all licensing functions are now in one agency. And we're currently in the process of consolidating six separate licensing programs platforms into one. One agency that operated out of 10 buildings now operates out of just one.
Altogether, we've saved taxpayers $217 million in just 18 months, surpassing our initial projections for the first four years. And our government isn't just smaller, it's better.
Getting your medical license recognized used to take 65 days, now it takes three.
Unemployment case rulings used to take three months, now it takes 11 days.
Moving our motor vehicle enforcement unit into the Department of Public Safety put 100 more state troopers on the road.
After aligning agencies, we then streamlined our system of boarding boards and commissions, cutting 83 boards, about a third of the boards and commissions.
We also brought IT systems spread across 20 different agencies into one department. And last year (2024) we consolidated 32 substance use and mental health regions into seven unified behavioral health regions, resulting in greater investment on the ground and treatment delivered to Iowans when and where they need it.
And now we're taking yet another step. I recently announced my intention to launch an Iowa DOGE to continue reducing the cost of government, maximizing the return on taxpayer's investment.
Like most Americans, I'm thrilled by the priority that President Trump is placing on shrinking government and making it work better. Not only do I believe that Iowa is a model, but I'm committed to doing everything I can to help in the months ahead.
Transcript of Senate Hearing in the US with Governor Kim Reynolds regarding Government efficiency – February 2025.
First, let me thank Congressman Nunn for your kind words and thank you for your service.
Chairman Comer, Ranking Member Conley, Members of the committee, thank you for giving me the opportunity to testify today. Since this hearing is about government efficiency, I'll get right to the point. Iowa was doing DOGE before DOGE was a thing.
When I was elected to office in 2018, our tax structure was uncompetitive. Our top income tax rate was 8.98%, one of the highest in the nation, as was our 12% corporate rate.
Antiquated state policies made our tax code complex and hard to reform. Soon after President Trump signed TCJA into law, I signed legislation that eliminated federal deductibility, cut rates across the board, provided for additional reductions in future years, and reduced the number of income tax brackets.
After four more historic reforms, Iowa taxpayers today pay a flat income tax rate of 3.8%. Our corporate rate is moving to a 5.5%, and we've eliminated tax on retirement and inheritance income.
Over 10 years, Iowans will save an estimated $24 billion in a state with an annual budget of about 10 billion. But it's not enough just to cut taxes. You have to make sure that they're sustainable, especially if you want to keep reducing them. The growth they create helps, but you also need to keep spending and government in check, and I've worked closely with our General assembly to do just that.
In fact, the Cato Institute has ranked Iowa the most fiscally responsible state in the country for three years running.
But that wasn't always the case. When we started our alignment work in 2022, state operations had not been reviewed for 40 years, and it showed layers of bureaucracy had accumulated over decades, expanding government beyond its core function. We were too big, too fragmented, and too inefficient.
One example became clear during COVID where the separation of our public health and human services departments. We merged them into the Department of Health and human services in 2022, the first big step in our work to align state government.
It was a successful proof of concept and a roadmap as we saw similar misalignment across state government.
Well, we had 11 separate state agencies, operating workforce programs, 136 professional licensing functions were spread across 11 agencies. Our administrative code had ballooned to more than 20,000 pages with 190,000 restrictive terms.
At one point I discovered that the state owned a cow calf operation, and to make matters worse, it operated at a loss.
Given our limited staff and scope of the initiative, we partnered with an outside firm while bringing agency directors and their staff into the discussion early.
And we ask the hard questions that bring about accountability and change. What is the core mission of each agency?
- How is it funded?
- How is it staffed?
- And what does it own?
- Are the programs working?
- How did the structure of the agency compare to other states?
- Is there duplication or misalignment?
In 2023, we eliminated 1300. We introduced, excuse me, a 1300 page bill that passed with only one technical amendment and took effect less than a year after we began the process.
I also initiated a moratorium on new rulemaking and ordered a comprehensive review of all rules already on the books.
Together, These actions cut 21 agencies from my cabinet, eliminated 600 open positions, removed 1200 regulations in year one, and identified 4700 acres of state owned farmland to sell.
Nearly all licensing functions are now in one agency. And we're currently in the process of consolidating six separate licensing programs platforms into one. One agency that operated out of 10 buildings now operates out of just one.
Altogether, we've saved taxpayers $217 million in just 18 months, surpassing our initial projections for the first four years. And our government isn't just smaller, it's better.
Getting your medical license recognized used to take 65 days, now it takes three.
Unemployment case rulings used to take three months, now it takes 11 days.
Moving our motor vehicle enforcement unit into the Department of Public Safety put 100 more state troopers on the road.
After aligning agencies, we then streamlined our system of boarding boards and commissions, cutting 83 boards, about a third of the boards and commissions.
We also brought IT systems spread across 20 different agencies into one department. And last year (2024) we consolidated 32 substance use and mental health regions into seven unified behavioral health regions, resulting in greater investment on the ground and treatment delivered to Iowans when and where they need it.
And now we're taking yet another step. I recently announced my intention to launch an Iowa DOGE to continue reducing the cost of government, maximizing the return on taxpayer's investment.
Like most Americans, I'm thrilled by the priority that President Trump is placing on shrinking government and making it work better. Not only do I believe that Iowa is a model, but I'm committed to doing everything I can to help in the months ahead.
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