Public Policy Update: 2026 Legislative Session Begins
January 16, 2026 | Public Policy
STATE POLICY UPDATE
The 2026 Iowa Legislative Session is officially underway as of Monday, and the opening week has already brought forward proposals that could shape Iowa’s business climate for years to come. In her Condition of the State address Tuesday evening, Governor Reynolds called for comprehensive property tax changes aimed at predictability and relief, while also highlighting the importance of talent development, skilled trades, housing and economic competitiveness; themes central to the Economic Alliance’s 2026 public policy priorities. Many of the bills introduced this week build directly on those goals. Below is a snapshot of legislation we’re watching closely and why it matters to employers.
Property Tax Reform
Property taxes are expected to dominate the session. The Governor and Senate Republicans have each introduced their versions for reform, and House Republicans are expected to introduce theirs soon. Each would significantly restructure Iowa’s tax and local government systems. We will continue engaging in all versions until compromise is met. Predictability in taxes is critical for business investment decisions, but these proposals may also affect local government capacity to invest in infrastructure, housing, and economic development tools.
Workforce & Talent Development
Several bills seek to align education and training with employer demand.
- SF2005: Allows school districts that share career and technical education instructors to receive supplementary weighting, increasing funding for CTE programs.
- SSB3004: Creates an online career exploration platform connecting students with professionals for virtual classroom career engagement.
- SSB3006: Requires new college students to meet with career development offices early in their enrollment to receive structured career planning information.
We will continue pushing for proposals that strengthen the long-term talent pipeline by exposing students earlier to career options, supporting skilled trades instruction, and ensuring postsecondary programs align with labor market needs.
Utilities & Regulatory Oversight
This proposal seeks to improve the governance, transparency, and efficiency of the state’s utility regulatory framework to support a more predictable business environment.
- HSB513: Restructures the Iowa Utilities Commission by creating an executive director position and clarifying leadership roles. Regulatory structure and decision-making processes can affect infrastructure development, utilities planning, and project timelines.
FEDERAL POLICY UPDATE
Federal Government Shutdown Watch: Congress continues negotiations on the FY 2026 federal budget while operating under a continuing resolution. A shutdown would occur if lawmakers and the Administration fail to agree on funding by the end of January, potentially disrupting non-essential federal services, delaying regulatory actions, and creating uncertainty for employers and contractors, while essential services would continue to operate. The Economic Alliance will continue to urge our federal delegation to reach compromise and avoid another costly shutdown.