Week of February 28, 2022
This Week in the Iowa Legislature
The House and Senate spent hours caucusing before taking up several bills in floor debate throughout the week finishing up on Wednesday. The House passed about 50 bills this week while the Senate passed roughly 10. There has been a stark difference this year in the number of bills passed from chamber to chamber with the Senate taking a much more conservative approach. While many of the bills were noncontroversial, issues making waves included banning transgendered kids from participating in sports, reducing the age of child care workers who don’t need supervision, allowing parents to pay the difference in child care reimbursement rates, right to try medical therapies, and a COVID immunization bill which wouldn’t allow a child care, K-12, or post-secondary education institution to require a vaccine for attendance.
Governor Reynolds Delivers State of the Union Response
Much of the energy and excitement in the building early this week was around the Governor’s Republican response to President Biden’s State of the Union address on Tuesday evening. Reynolds began her speech with a focus on foreign policy — dialing in on the Russian conflict and expressing solidarity with the Ukrainians. Then, Reynolds turned to domestic issues including inflation and COVID-19 mitigation measures. She said across the nation Republican Governors and legislators have respected the American people’s wishes by refusing to adopt mandates and by re-opening schools as soon as possible. She then highlighted Iowa’s approach to the pandemic, including the early reopening of schools and businesses and the adoption of a sweeping new tax cut plan.
Signing Iowa’s Tax Plan (HF 2317) into Law
Last week, the Governor asked legislators to act swiftly to pass a tax cut she could speak to while in the national spotlight. Legislative leaders responded in earnest and the Governor signed the bill into law on Tuesday afternoon, putting Iowa on the map with the fourth lowest individual tax rates in the nation once the cuts are fully in effect in 2026. This bill is being touted by Republicans for rewarding work, taking care of farmers, and supporting retirees, all while protecting key state priorities and allowing Iowans to reinvest these dollars in Iowa’s economy. Although a couple of Democrats in each chamber supported the bill giving it bipartisan support, Democrats overwhelmingly called the cuts reckless and unfair saying the tax policy is outdated and has failed other states like Kansas and Louisiana.
The changes will begin in 2023 but are expected to be fully implemented in FY 2028. At this time, the reduced individual income tax rates are expected to be cut by $1.4 billion according to the Legislative Services Agency (LSA), with the retirement exemption cutting revenue by about $376 million. The interaction between rate cuts and exemptions is expected to increase revenues by about $100 million. The changes for capital gains for employee-owners are expected to decrease state revenue by about $9.5 million. The changes to farmers’ rates are expected to decrease revenues by about $7.3 million. Overall, the change to individual income taxes is expected to reduce revenues by about $1.7 billion. The annual impact to the average wage earner is expected to be about $600 more in their pocket.
Key Initiatives
On Tuesday the AS team requested both Representatives Meyer and Siegrist ask the Majority Leader’s office to consider moving HF 2368, IBC’s standardizing penalties for steering unreasonably close to a bicyclist and causing injury or death legislation, to the House floor for a vote soon. We will continue to push for this bill to be considered in order to meet the second funnel deadline. Ann confirmed she has a meeting with Windschitl on Monday and will follow up after her meeting.
On Wednesday the House debated and unanimously passed HF 2415, Recreational Land Use. This bill would include RR rights-of-way or crossings and private land in a municipality while being used for recreation in private lands available for recreational uses. It also defines bicycles and adds bicycling, jogging, and walking as recreational purposes. The bill now moves to the Senate for consideration
Looking Forward
As both the House and Senate look toward adjournment, they have yet to finish one thing, the budget. They are waiting for the March Revenue Estimates before they can come to an agreement on a budget target and go full steam ahead toward adjournment. On Thursday the Revenue Estimating Committee meets and will give legislators guidance on how to move forward. We then expect leadership to have a final budget target. Based on what we are hearing, they are planning to adjourn the first week of April.
As we look toward next week, both chambers have scheduled limited time for floor debate and more time for subcommittee and committee work to ensure their priorities meet the looming second funnel deadline. A list of scheduled committees and subcommittees with their virtual access information can be found at the provided link. If you have challenges connecting with the virtual link, you can always call in.
