Public Policy Update: Legislature Moves Beyond Final Funnel Deadline
April 11, 2025 | Public Policy
State Policy Update
Last Friday marked the second and final legislative funnel of the session. To remain viable, policy bills had to pass one chamber and clear a full committee in the other. Ways & Means and Appropriations bills are exempt from these deadlines. Leadership may also place bills on the Unfinished Business Calendar to remain viable for consideration. For a full list of bill statuses, click here.
This week the Senate and House leadership agreed to the State Supplemental Aid (SSA) rate at 2%, increasing school aid by $136 million. The governor indicated she will sign the bill.
The latest version of the overhaul of Iowa’s property tax system was released this week. We continue to review the legislation and provide member feedback. Legislators have committed to not rushing the overhaul and receiving ongoing input before it is finalized. Read more here.
As budget bills begin to be introduced, legislators will move to working on a range of state spending priorities. The Economic Alliance continues to closely monitor legislation related to our 2025 priorities, including the following:
Incentivize Business Growth
• The Iowa Economic Development Authority’s (IEDA) tax credit reform bill had subcommittee meetings in both chambers this week. The bill calls for significant restructuring of tax credit incentives by consolidating and/or eliminating some existing incentive programs and creating new programs. Status: Passed House and Senate Ways & Means subcommittees in both chambers on 3/27. Legislators continue taking input as the bill moves forward.
• A bill that would cut economic development funding for Iowa’s fourth most populous counites, including Linn, passed a House subcommittee last week. Proponents say this would help rural counties compete. Status: The Economic Alliance strongly opposes this legislation, and it is not expected to move further than the subcommittee action.
• 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. Status: Awaits Action in Ways & Means Committees of both chambers. Fiscal Note
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. Additionally, a health care professional incentive program is created to provide financial awards to eligible health care professionals working in underserved areas. Status: Passed House 95-1 on 3/26. Awaits action in Senate Appropriations Committee.
• 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. Status: Signed into law on 3/28. Fiscal Note
• 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. Status: Awaits Action in House Ways & Means Committee.
• 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. Additionally, the bill modifies the curriculum for grades five through eight to include career planning and pathways. Status: Passed House 61-28 on 3/10; Placed on Unfinished Business Calendar for further action this session.
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. Status: Placed on Unfinished Business Calendar for further action this session.
Enhance Community Attraction & Livability Efforts
• **NEW** The Tourism & Major Events bill was introduced again this session. It would establish a new Major Events funds to give financial assistance to groups for major tourism events that have a measurable economic impact. Status: Awaits action in Senate Appropriations committee.
• A workforce housing tax incentive bill proposes to raise the cap from $35 million to $50 million, and aims to improve housing availability and affordability in the state. Status: Awaits Action in both Chamber’s Ways & Means Committees.
• Another housing bill removes the current $7 million annual cap on the amount of Real Estate Transfer Tax funds that can be transferred to the Housing Trust Fund allowing for more attainable housing development. Status: Awaits Action in both Chamber’s Ways & Means Committee.
• The Midwest Interstate Passenger Rail Compact continues to see bipartisan support to promote passenger rail travel in midwestern states, including Iowa. Status: Passed House 95-1 on 3/12; Awaits Action in the Senate. Governor Reynolds has scheduled a special election for House District 78 on April 29, 2025, following the resignation of Representative Sami Scheetz. Scheetz stepped down after being appointed to serve the remainder of Ben Rogers’ term as Linn County Supervisor. House District 78 includes central and southeastern Cedar Rapids. Watch for a Special Voter Guide for this race in our next public policy update.
Federal Policy Update
Tariff & Trade Watch: In response to concerns about the executive branch’s expansive use of tariff powers and to seek a more balanced approach to trade policy, Senator Chuck Grassley (R-IA) and Senator Maria Cantwell (D-WA) introduced the bipartisan “Trade Review Act of 2025” last week.
This legislation aims to reassert Congress’s constitutional authority over trade policy by requiring the President to notify Congress within 48 hours of imposing or increasing tariffs, providing a rationale and an analysis of the potential impact. Congress would then have 60 days to approve the action; otherwise, the tariffs would automatically expire. The bill also allows Congress to terminate tariffs at any time through a joint resolution of disapproval. Read more about Senator Grassley long-time approach to Congress’ tariff authority.
The Economic Alliance advocates for economic growth policies on the local, state and federal levels. We collaborate with the business community and other stakeholders and partners to develop our yearly policy agendas, to create a consistent voice for the region.
We are a non-partisan organization that does not endorse or donate to political candidates. We support First Amendment rights for all people and encourage elected officials, candidates and citizens to be civil in discussions and debates on policy issues and political opinions. We are committed to leading by example.