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Public Policy Update: Budget Work Begins in the Final Weeks

April 5, 2024 | Public Policy

State Policy Update

Legislators have 11 days until the scheduled conclusion of the session, and when their per diems’ end. The one thing legislators must do each session is pass budget bills for the preceding fiscal year. Last week Senate and House Republicans released their budget targets for FY 2025. The House’s number is almost $83 million more than what the Senate proposed and $47 million higher than the Governor’s proposal. They must now work together and compromise on final numbers. You can read more about their budget priorities here.

As they enter the final weeks of the session, the focus will be on tax bills, budget bills and those on the unfinished business calendars. The status of the priority bills the Economic Alliance has been most closely following include:

Expanding Work-Based Learning

  • The Governor’s Work-based Learning bill (SF2411/HF2516) expands work-based learning opportunities, creates a workforce opportunity fund, makes changes to student teaching requirements, and adds eligibility requirements for the last dollar scholarship program. We support the continuation of expanding work-based learning programs and make the existing ones more efficient, including Last Dollar Scholar, adding work-based learning to career and technical education classes that 9-12 schools are required to offer, and allowing WBL when school is not in session. Status: Senate bill passed out of Appropriations and Workforce subcommittees. House bill passed out of Appropriations and Labor & Workforce subcommittees.

Increasing Housing Options

  • HF2420 increases the caps for the Workforce Housing Tax Incentive program. We support increasing the cap to $50 million, and the allocation for small cities to $25 million. Status: Passed out of a House subcommittee on Economic Growth & Technology this week. Read the Fiscal Note.

Economic Development Competitiveness

  • The “Major Economic Growth Attraction Program” or “MEGA Program” legislation (SF574) would create a fund for Iowa to compete for large-scale economic development projects that provide high-paying jobs and capital investment. We support this legislation. Click here to read what it would mean for Iowa. Status: Passed the Senate last session on a 45-2 vote. Amended and passed the House on 3/6. Returned to Senate for further action.

Promoting Predictable & Fair Taxes

  • There are several major tax-related bills being considered this session. We continue to call for tax structures that are simple, predictable, and promote fairness and fiscal responsibility.
    • The Governor’s bill (SF2398/HSB543) calls for close to $3.8 billion in tax cuts over the next five years, lowers personal income tax to a flat 3.65% to go into effect in 2024 and effective 2025, the rate drops to 3.5%. Status: Awaits full Committee action in both Chambers. Read the Fiscal Note.
    • SSB3141/HSB720 is an Income Tax Elimination bill that would phase down the individual income tax to a flat 3.65% by Tax Year ‘26, lower Iowa’s corporate income tax to 4.9% using the current method adopted 2022 and transition the Tax Relief Fund to a trust fund with revenues generated used to gradually eliminate individual income taxes. Status: Assigned to Ways & Means subcommittees in both Chambers earlier this month.
    • SJR2003/HJR2006 proposes a constitutional amendment to require 2/3 approval of both the Senate and House to increase tax rates. Status: Placed on the Senate’s Unfinished Business Calendar. Assigned to Ways & Means subcommittees in Senate. Passed the House 3/26.
    • SJR2004 proposes a constitutional amendment to require a single individual income tax rate. Status: Passed the Senate on 4/2.

Passenger Rail Across Iowa

  • HF591/SF2315 enacts the Midwest Interstate Passenger Rail Compact to develop intercity passenger and high-speed rail traffic and allows the state to join the existing compact. We support this legislation as it is the first step in Iowa seeing passenger rail from the Quad Cities, through Iowa City and Des Moines, to Council Bluffs. Status: Passed House on 2/19. Placed on the Senate’s Unfinished Business Calendar.

Child Care Availability

  • We support policies that address access, affordability and quality child care. SSB3181 /HF2655 designates child care facilities as residential property to decrease property tax costs so they can use those savings toward other efforts, like workforce wages. This language is also included in the Governor’s tax proposal. Status: Passed House on 3/19. Awaits action in Senate Ways & Means subcommittees.
  • HF2568 makes changes to reimbursement rates for the child care assistance (CCA) program to allow for more parents to qualify. Also extends the pilot program that allows children of certain full-time child care providers to quality for the CCA program. Status: Passed the House 3/25. Awaits action in Senate Appropriations Committee.

Community Attraction & Livability Efforts

  • SF2419 Creates an Iowa Major Events Tourism program to give financial assistance to groups for major tourism events that have a measurable economic impact. Does not allow an entity receiving money from this fund to receive funds from the Sports Tourism fund. Status: Passed out of a Senate Appropriations subcommittee on 2/27.

More News

Serve Your Community: The City of Cedar Rapids is currently seeking citizens to apply to City Boards & Commissions: Read more about how to apply. Applications are due by April 30, 2024. Contact Barbra Solberg if you have specific questions about the process.

Federal Advocacy: The Economic Alliance’s Public Policy Strategist Barbra Solberg joined a roundtable discussion last week with Senator Chuck Grassley hosted by our partners at Greater Iowa City, Inc. In the meeting, Solberg and others advocated for workforce solutions surrounding Visa reform, additional funding streams to encourage more to enter trade professions and the bipartisan tax bill Congress is considering that would benefit small businesses. You can read more about the discussion here.