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DES MOINES — Delivering her first Condition of the State speech Tuesday, Gov. Kim Reynolds was upbeat as she declared Iowa remains strong “because our ability to dream is infinite, and the will of our people is great.”

While her major theme was tax cuts, Reynolds also used the annual report to a joint session of the Iowa House and Senate to address the “destructive force” of sexual harassment and problems in the management of the state’s Medicaid program.

Reynolds praised women who have found the courage to speak out about sexual harassment. That would seem to include a former Republican Senate staffer who won a $1.75 million lawsuit settlement last year that involved claims of sexual misconduct.

“Everybody is awakening to (the fact) it’s time to fix this, and we’re certainly doing our part here,” House Speaker Linda Upmeyer, R-Clear Lake, said. In the wake of the lawsuit settlement, the Legislature has hired a human resources officer who will start later this month.

The governor raising the issue is helpful, Senate Minority Leader Janet Petersen, D-Des Moines, said, “but we’ve yet to see any policy changes in the Senate that will make our environment more welcoming, an open, safe place.”

Tax reform

Reynolds laid out her agenda for tax reform, including an end to federal deductibility, a thorough review of tax credits and an immediate focus on individual rate reductions.

Iowa tax code allows filers to deduct what they pay in federal income taxes from their state income taxes. Reynolds wants to get rid of the provision because federal tax cuts approved in Congress will leave Iowans with fewer deductions and result in some filers paying more in state taxes. Ending federal deductibility while cutting rates is meant to simplify income taxes and save Iowans money overall.

Reynolds also proposed an initiative to expand broadband access in rural Iowa, a public-private effort to increase the number of Iowans with 21st century workplace skills, an expansion of mental health services and efforts to combat the growing problem of opioid abuse.

Reactions to her policy proposals fell predictably along party lines. Republicans welcomed her call for lowering individual income tax rates.

“We need to make sure those dollars end up in taxpayers’ pockets,” Upmeyer said. “We’re not going to have the state hanging on to dollars that were intended for taxpayers.”

Democrats were less optimistic.

“I don’t know how you cut taxes when we can’t even balance our budget now,” said Rep. Mary Mascher, D-Iowa City. “All I see is more cuts.”

Medicaid

Addressing the controversial transition from a state-run Medicaid program to a privately run system similar to that in 39 other states, Reynolds allowed mistakes have been made.

However, it was “a change that needed to be made” to stem the rising cost of providing health services to more than 600,000 low-income Iowans, many of them children or elderly.

She conceded the projected savings of $47 million is far less than estimated when Branstad made the change nearly two years ago.

However, she said, the Department of Human Services director she hired “has the passion, and — most importantly — the compassion to make this work,” and the state’s new Medicaid director has the experience “to get things turned around.”

“I think her commitment to solving some of our health care problems is one of the most inspirational things in her speech, because we’ve all been hearing about the challenges that we’ve had facing us,” Upmeyer said.

Mascher was more cautious, but promised Democrats will “fight tooth and nail to make sure that we can get adequate funding for both our health care system and our Medicaid system as well as our mental health system.”

Workforce

Reynolds also proposed partnering with the private sector to expand education and training for Iowa workers. Today, she said, just over half of Iowa’s workforce has training beyond high school. Reynolds wants to increase that to 70 percent.

Her plan calls for legislative approval of the Future Ready Iowa Act and $500,000 to expand programs like the one at the West Delaware school district in Manchester that teaches high school students vocational skills that lead directly to jobs in their communities.

Reynolds also included $1 million in her proposed budget to expand apprenticeship programs.

The governor offered to use state dollars to match private investment in an Iowa Employer Innovation Fund for training programs that best fit the needs of business and industry.

Acting Lt. Gov. Adam Gregg will lead an initiative focused on reviving rural Iowa because, Reynolds said, “the heart, soul, and spirit of Iowa will always remain in our small towns and rural communities.”

The goal is to promote investment by expanding broadband capabilities in every corner of our state in order to “keep and bring home Iowa’s sons and daughters and grow the next generation of community leaders,” Reynolds said.

‘Dreams come true’

It was a historic speech for Reynold, 58, who became the state’s first female governor in May when Gov. Terry Branstad resigned to become the U.S. ambassador to China. In closing, she returned to the positive themes she used to open her speech.

“I believe that Iowa is — and ought to be — a place where, if you’re willing to work for it, you can make your dreams come true,” she said. “My vision is to give the people of Iowa a place to call home that unleashes opportunity at every turn.”

She called for building a “future where our ability to dream is infinite and the will of our people remains eternally unbroken.”

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Statehouse reporter for The Courier

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