Passed the Senate
Hands-Free Bill-SF 22: Prohibits the use of electronic devices, usually cell phones, while driving except in the voice-activated or hands-free mode. Several exceptions related to emergency situations and public safety and health care personnel apply.
PBM Reform – Reverse Auction-SSB 1017: This is the Iowa Competitive Pharmacy Benefit Managers (PBM) Marketplace Act. It establishes a reverse auction as part of public employee health plans. A series of bidding rounds are conducted and each PBM has a chance to bid to provide the PBM service. This is to help provide the lowest cost service for employee and employer.
Drone Bill-SF 491: Creates a criminal charge for flying a drone within 400 feet from farm animals, farm equipment, and farm structures without prior consent. The criminal charge is enhanced if the drone is equipped with a surveillance device that can record images, sounds, the species of farm animals, and the type and use of farm equipment and structures.
“Right to Try”-SF 233: Expands Iowa’s “Right to Try” Act to include “individualized investigational treatment”. Also allows a patient that has a life-threatening or severely debilitating illness, as confirmed by a doctor, to participate in the program.
Vehicle Firearms Conveyance-SF 106: Removes restrictions on carrying firearms on a snowmobile, ATV, or in a vehicle. Makes the law compatible with the state’s Constitutional Carry law.
Judicial District Nominating Commission Reform-SF 407: Makes changes to the judicial nominating commissions for district judges similar to the changes that were made several years ago for the state judicial nominating commission that nominates Iowa Supreme Court justices. The governor appoints 6 instead of 5 commissioners. The Iowa Bar Association appoints 5 commissioners. (Total of 11.) Removes the judge as chair of the commission and the commission elects its own chair.
Local Civil Service Reform-SF 311: Reforms the civil service discipline process using more objective standards regarding discipline decisions. This came out of situations in some cities where some police officers faced unfair and biased trial processes before civil service commissions.
Joint Physical Custody-SF 514: During the course of a temporary child custody proceeding, the court shall award joint physical care of a child to both parents, unless there is a good reason against awarding physical care to one of the parents. The governing legal standard is “the best interest of the child”.
Default Speed Limit-SF 378: This changes the default speed limit for roads and highways in Iowa from 55 mph to 60 mph, unless otherwise marked. This primarily affects undivided, paved highways.
Ranked Choice Voting-SF 459: Prohibits ranked choice voting in Iowa. Ranked Choice Voting is a system where, rather than just voting for one candidate, voters must vote for (i.e., rank) all candidates to ensure that their ballots are counted and not trashed. This includes voting for candidates with whom a voter fundamentally disagrees. When no candidate receives more than 50 percent of the vote in the first round of tabulation, some voters’ ballots must be trashed to force a majority.
Constitutional Amendment-SJR 9: Proposed constitutional amendment to protect children and any witness with a mental illness, or intellectual or developmental disability from confrontation by an accused person who was their abuser in court. Currently in our constitution the right of the accused to confront witnesses is not limited and with certain persons it needs to be. This came from the Attorney General’s office. Iowa is the only state that currently does not have this protection.
Apprenticeship Training-SF 603: State and local governments cannot mandate that developers or contractors use union apprenticeship training. It must remain voluntary. Governments also may not use incentives contingent upon the developer or contractor using union apprenticeship training. This is seeking to keep a level playing field between union and non-union workers in working on publicly funded projects.
Budget Issues
The Revenue Estimating Conference (REC) has met to give the legislature its March estimates:
Fiscal Year 2025 (Current Budget Year-ends June 30th)
Projected Revenue: $9.1 billion (a small decrease from the December estimate and $600 million less than what was collected in revenue in FY 24)
Projected Ending Balance: $2 billion
The biggest impact to the revenue is the implementation of our tax policies of the past several years including the 3.8% flat tax, which is to be expected.
Fiscal Year 2026 (estimate to build the upcoming budget that begins in July)
Projected Revenue: $8.5 billion (an estimate that is revised downward by $217 million from the December estimate)
Due to March REC estimate being lower than the estimate we received in December, the March estimate will be used to set the budget for the next fiscal year.
Again, the biggest impact to the revenue is the full implementation of previous years’ tax policies including the 3.8% flat tax, which is to be expected.
In general, the REC tells us that Iowa’s receipts, budget, and reserves are solid. Iowa’s labor market is performing above the national average with 3.2% unemployment rate and 66.4% labor participation rate. The REC is monitoring the federal policies impacting the global economy, but it is too soon to realize any calculable impact on FY 26 revenues. They are in a cautious mindset.
Fiscal Year 2027 (the budget we will set next year)
The very preliminary FY 27 revenue projection is $8.9 billion, which is an increase from the FY 26 projection.
These are still estimates and numbers will change, so the only thing in the legislature’s control is spending authorization or the actual budget we set.
We expect to pass a conservative budget that puts taxpayers first as we have done for the past decade plus. The 3.8% tax cut as well as previous tax cuts are having their expected initial effect, a dip in the state’s revenue. However, the legislature has set aside enough money in surplus and carryforward funds to be able to keep the state’s priorities of education, health care, and public safety funded. We are expecting that the state’s revenues will recover and eventually increase as historically revenues have done when tax cuts are enacted. That has been the effect when money goes back into taxpayer’s pockets.
No matter what, there will be always be more needs and requests than the taxpayers for state government can fulfill.
The governor has proposed her budget (back in January) and her plan is to spend $9.4 billion from the General Fund in FY 2026. This is an increase of $486 million, and is more than the projected revenue for FY 26. We are able to consider setting a budget like this due to the sizable amount of surplus we have built up in order to handle the initial years of a downturn following tax cuts. The Senate and House have yet to set our budget targets and come to agreement along with the governor.
Among the major items in the governor’s budget are:
- $102 million increase for Supplemental State Aid (SSA) for schools, which is a 2% increase.
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- The Senate also passed a $235 million for K-12 schools, a 2% increase in SSA for all K-12 education, includes public schools, ESA’s, and charter schools and the teacher pay increased passed last year. This brings state aid spending to $7983 per student or a total of $4.2 billion. Including local funding the amount spent on K-12 education is over $6 billion.
- The House passed a 2.25% increase in SSA. In addition, the House has also proposed a one-time funding amount of $22 million, a $6 million increase in per pupil equity, a $1 million increase in operational sharing incentives, and $6 million increase in transportation funding.
- The House, Senate, and governor are close on school funding but agreement has still not been reached. Hopefully it will be soon.
2. $223 million increase for Medicaid – to address shortfall by the federal government plus the usual increase needed. Includes a $25 million nursing facility increase and $19 million for HAWK-I, the children’s insurance program.
- $40 million payback to the Economic Emergency Fund due to an unexpected $40 million spent from that fund to cover natural disaster expenses from flooding in NW Iowa and tornado damage in communities such as Greenfield and Minden.
