Public Policy Update: First Legislative Deadline in One Week
February 28, 2025 | Public Policy
State Policy Update
Legislators have one week to go until they reach the first funnel deadline of the session. Bills that pass at least one chamber’s committee remain eligible for action for the session. Tax and spending bills are exempt from funnel deadlines. The Economic Alliance is closely monitoring many pieces of legislation related to our 2025 Priorities, including the following:
Invest in Talent Development
- The Governor’s Health Care System Reform Bill aims to recruit and retain medical providers by creating a “hub-and-spoke” partnership funding model to enhance Iowa’s rural health system. It replaces several existing health care-related programs with a new health care workforce and community support grant program to promote local recruitment and retention of health care professionals. Additionally, a health care professional incentive program is created to provide financial awards to eligible health care professionals working in underserved areas.
- The Improving Workforce Development Initiates Bill aims to enhance the efficiency and effectiveness of workforce development initiatives in Iowa to create a more skilled workforce. It includes clarifying the functions of the workforce development department, board, and local boards and establishes the Iowa Student Internship Program to connect students with employers, particularly in the STEM fields.
- The Iowa New Resident and Graduate Tax Credit Act introduces two tax credits: one for new residents who have recently taken full-time employment in Iowa and another for recent graduates from Iowa-based educational institutions. Each credit allows eligible individuals to reduce their income tax liability by 100% for up to four consecutive tax years.
- The Career Education Enhancement Act aims to connect students with local career opportunities and enhance their readiness for the workforce. It mandates the Iowa Department of Education to create a list of industry-recognized credentials for high school students, which will be aligned with career and technical education service areas. It requires school districts to report students who attain these credentials and recognize them by affixing a seal to their transcripts or providing a certificate. Additionally, the bill modifies the curriculum for grades five through eight to include career planning and pathways, ensuring students are prepared for their future careers.
Incentivize Business Growth
- This week saw the introduction of a Tax Credit Reform Bill by the Iowa Economic Development Authority (IEDA). The bill significantly restructures tax credit incentives by consolidating and/or eliminating some existing incentive programs and creating new programs. This is an effort by the state to encourage startup investments and promote high-wage industries like manufacturing, biosciences and technology.
- A bill to further reform Iowa’s Unemployment Insurance Program continues to make its way through the legislature. A priority of the Governor, the proposal would lower the maximum benefit tax rate to 5.4%, the lowest allowed by federal law, and cut the taxable wage base by half. It also reduces the number of tax tables.
Remove Barriers to Expand our Workforce
- The Governor’s Child Care Proposal continues to move forward. The proposal would launch a $16 million program to provide three-year grants of up to $100,000 to preschool providers and child care providers to provide wraparound transportation services for working parents. The funds could also pay for a preschool teacher at a local child care center, or for child care staff at a preschool. Democrats agree with parts of the proposal but have concerns funding it would come from existing programs.
We anticipate another property tax reform bill to be introduced this session and will continue to focus our advocacy to promote pro-growth and pro-business initiatives and policies.
Demographics are Destiny: How Iowa’s Demographics are Shaping the State’s Population, Workforce, and Economy
Check out this new report from the Common Sense Institute of Iowa and learn what’s happening with Iowa’s population growth.
Federal Policy Update
This week the US House of Representatives passed a budget resolution by a narrow 217-215 vote, aligning with President Donald Trump’s “America First” agenda. This resolution proposes $4.5 trillion in tax cuts and $2 trillion in spending reductions over the next decade, aiming to reduce the federal budget by $1 trillion. The Senate will either need to pass the House resolution or pass their own version to move the process along. Read more about what comes next. In addition to a budget resolution, both the House and Senate must work together to prevent a government shutdown by March 14.
The Corporate Transparency Act’s (CTA) beneficial ownership reporting requirements are back on. After numerous delays pending legal challenges, most small businesses now have to file their paperwork by March 21, 2025. Failure to submit the paperwork puts small businesses owners at risk of criminal penalties and fines up to $10,000. The CTA was enacted by Congress on January 1, 2021, as part of the National Defense Authorization Act. The CTA included significant reforms to anti-money laundering laws and is intended to help prevent and combat money laundering, terrorist financing, corruption, and tax fraud. Download this CTA Guide by the US Chamber for more information. Have questions about anything and everything going on in Washington, D.C. these days? Contact our public policy strategist, Barbra Solberg.