The 2021 Iowa Legislative Session
Week of March 15th, 2021
This Week in the Iowa Legislature
Although both chambers were done early on Thursday, this was not a sign of an unproductive week. Week 10 was yet again filled with contentious floor debate and hours of caucus time as the House and Senate debated priority bills as expected with two weeks to go before the second funnel deadline. The Ways and Means and Appropriations Committees considered a handful of policy items but other policy committees did not meet. Perhaps the most anticipated meeting of the week was the Revenue Estimating Conference (REC) on Friday.
State Budget Forecasts and Process Update
The REC met Friday morning to set the state budget growth projections for the current and future fiscal years. For the current state budget, FY21, the REC projected 1.9% growth from FY20, which exceeds the December projection of 0.5%. For FY22 which determines the budget currently being debated at the statehouse, the REC came in just above their December projection of 3.7% with a 3.8% projection. By law, the Governor and legislature must use the lower of the December and March REC projections. Because the Governor had already used the December numbers for her budget recommendations and the March projections came in higher, the legislature can feel comfortable using the Governor’s original total budget recommendation. With the updated REC projections confirmed, we expect the budget targets to be set and budget work to really take off this week.
The House and Senate also announced in which chamber each state budget would be starting this session. Moving forward we will have a weekly update on where the legislature is in the budget process and targets for the individual budgets.
Budgets Starting in the Senate: Administration & Regulation; Economic Development; Health & Human Services; Standings; and Transportation
Budgets Starting in the House: Agriculture & Natural Resources; Education; Judicial Branch; Justice Systems; Rebuild Iowa Infrastructure Fund (RIIF); and Federal Block Grant Appropriations
Contentious floor debate was a theme this past week. The House debated school free speech legislation for over four and a half hours early in the week and then a raucous debate over SF 580 took up hours of debate time in the Senate on Wednesday. SF 580 would deny high-tech companies future state and local tax breaks if they were found to have illegally censored speech or perspectives from their social media platforms. This bill goes to the House where its fate is unclear.
Wednesday evening the House experienced further controversial debate over HF 756, a bill removing the requirement for an individual to obtain a permit to purchase a handgun. Federal background checks would remain in place for licensed sellers; however, it was not explicitly stated in the bill that private sales had to follow the same guidelines. The bill was supported by every Republican and one Democrat in the House.
After President Biden signed the American Rescue Plan last week, state governments were faced with many unanswered questions regarding how the financial aid would impact their potential tax plans. This did not stop Iowa Senators from moving forward with their tax reform legislation (SF 576) in a bipartisan 47-0 vote. The bill proposes to accelerate the state’s 2018 income tax cuts by removing “triggers” needed to be met to lower taxes. If passed, the bill would lower the top tax rate, compress income tax brackets, eliminate federal deductibility, and phase out the inheritance tax over 4 years. Speaker Grassley voiced his concerns that the $90 to $100 million price tag on the inheritance tax cut may be too large, and his caucus will need to look at the new REC revenue estimates prior to making a decision on this tax cut legislation.
COVID-19 Vaccine Update
Governor Reynolds stated all Iowans 18 and older, roughly 2.1 million individuals, will be eligible for the vaccine as of April 5th if the federal government fulfills its projected vaccine distributions to Iowa. By doing so, Iowa would meet President Biden’s call to action to make all individuals eligible for the vaccine by May 1. Currently, 1,138,228 doses have been administered to Iowa residents, with 447,345 total vaccine series completed (both doses). The CDC continues to maintain a case and vaccine data tracker which is updated daily.
As the second funnel deadline approaches, legislators are scrambling to schedule last minute subcommittee meetings to prepare to move their final priorities through one of the scheduled policy committee blocks this coming week. Leaders have also scheduled limited floor debate, however we anticipate this will be less of a focus as the workload shifts back to committees. Now that the Revenue Estimating Conference (REC) has set their final budget projections, budget chairs are anxious to set their targets and put their budgets together. Following the funnel deadline, the chambers will be ready to start moving budget bills through the process as they prepare for adjournment. To stay up to date on scheduled committees and subcommittees and their virtual access information, follow this link.
Dates to Note
- April 2: Second funnel deadline (Friday of the 12th week)
- April 30: 110th calendar day of the session; legislators’ per diem expires