This week in the Iowa Legislature

This week brought a noticeable shift in pace at the Capitol. With policy committees largely done with their work for the session, the focus is now on Ways and Means and Appropriations bills, especially the state budget. The Revenue Estimating Conference finalized its work last Friday, settling on $9.63 billion in revenue for FY 25 and a 1% decrease in General Fund revenue from FY25 to FY26. However, Department of Management director Kraig Paulsen argued the state is in a “very strong financial position” with no signs of economic downturns on the horizon.

We expect this slower pace to be the theme for the remainder of the session as they shift their focus to getting a final consensus on AEA reform and education funding, tax cuts, and the state budget with only four paid weeks left in the session. The tension only continues to rise between the House and Senate as they take very different approaches to hot-button issues. A tactic we haven’t seen in recent years has reappeared, with members amending bills killed by the opposite chamber onto priority bills moving through the process. We only expect this to continue as each chamber tries to revive and advance their priorities before adjournment in this election year.

This week was again dominated with internal discussions and the House debate of what they are calling their “final position” on the AEA, teacher salary, and education funding legislation. It is yet to be seen whether Senate Republicans will agree to the House’s final version of the bill.

AEA Breakthrough or Continued Gridlock?

All eyes continue to be on the Area Education Agency (AEA) legislation. The House and Senate leadership and the Governor’s office spent a majority of their time and energy this week trying to hammer out a negotiated version of the bill. On Monday, the Senate considered and amended its version of the AEA reform package onto the House’s bill by striking and replacing the language in House File 2612. The Senate’s alternative differs from the House proposal in two key respects. First, school districts would have the ability to seek private entities for special education, general education, and other services. The House version stipulates only AEAs shall provide special education services. Second, the Senate proposal phases out AEA funding, and by FY26 AEAs will only receive 10% of special education funding. Of note, Senate Republicans lost 6 of their own members on the final vote on their version of the AEA bill leading to 28 yes votes, and those 6 Republicans voting in opposition with all Senate Democrats.

The Senate’s passage of their version of the AEA bill on Monday was just the beginning. The rest of the week the legislature moved very slowly as all the attention was on trying to iron out a final deal packaging the AEA reform legislation with K-12 education funding and a teacher salary increase bill in order to win the votes necessary to pass the bill.

On Thursday, House Republicans took all day to release their AEA, education funding, and teacher salary increase amendment, which was eventually debated on the House floor late in the afternoon. House Republicans set a ‘time certain’ on debate of the bill, a rarely used legislative procedure that limits the time of floor debate, to 6:30 pm on Thursday. The debate was extremely heated as House Democrats decried the amended bill cut AEA services and would negatively impact students with additional learning needs. House Republicans, including Education Chair Skyler Wheeler, argued the House version will do nothing to impact special education services offered to students and also invests heavily in Iowa’s education workforce. The final vote tally reflected just how contentious this issue has become with House Republicans only garnering the 51 needed votes for passage and 9 Republicans joining all Democrats in opposition.

Governor Reynolds released a statement thanking the House for working to get to a compromise on this issue, but House Leaders made clear there was not a final agreement with the Senate. Senate Majority Leader Whitver told the press he would take the House bill to his caucus for consideration and looks forward to finding a resolution on these issues. Only time will tell if this version of the bill will make it to the Governor’s desk or if the legislature will continue to be gridlocked.

The House Version of the AEA, Education Funding, and Teacher Salary Bill Includes:

  • A requirement that 90% of special education funding remains with the AEAs while 10% will go directly to school districts
  • In the first year, 40% of the funding for media services remains with the AEAs and 60% goes directly to school districts; in year two all of the money would go directly to school districts that can use AEAs or other providers
  • Establishment of an AEA taskforce to study potential improvements to Iowa’s special education services and providers
  • An increase in starting teacher pay to $50,000 per year over two years and veteran teachers with 12 years of experience to a minimum of $62,000
  • An investment of $14 million to increase pay for hourly school staff like paraeducators
  • A 2.5% increase in state per-pupil funding for K-12 education

Read more in this Des Moines Register Article

Creating a New Crime of “Illegal Re-Entry”

The Iowa legislature has considered several pieces of legislation on illegal immigration this session but Senate File 2340 is the first to pass both chambers and be sent to the Governor. This bill permits law enforcement agents to arrest an individual who entered the U.S. illegally and grants judges the ability to order an immigrant’s removal. SF 2340 establishes the crime of “illegal re-entry” and allows an Iowa state prosecutor to charge an immigrant who has returned to Iowa after a previous denial or deportation with said crime. If convicted of the charge, immigrants could face up to ten years in federal prison. The United States Supreme Court recently approved similar legislation in Texas, which allows state officials to arrest and deport illegal immigrants. Before this court decision, immigration enforcement was only regarded as a federal responsibility.

House Eminent Domain Proposal

On Tuesday, the House passed House File 2522 which would grant Iowans the ability to challenge eminent domain claims in court before the state agency, the Iowa Utility Board (IUB), reviews it. The objective of the bill is to give landowners earlier court decisions on whether eminent domain is appropriate for utility purposes. Current law requires any court challenges concerning eminent domain to wait until after IUB rules on the matter. The review process is time-consuming, resulting in the government seizing and starting construction on the land before any appeal processes can occur. House Republicans have proposed eminent domain legislation for the past three years, without support from the Senate. It is unlikely the Senate will consider House File 2522, but GOP House leaders remain committed to advancing the legislation.

Looking Ahead

As we approach the end of session, with the last day scheduled for April 16th, we continue to see the pace continue to shift in the building. The session has officially transitioned into the hurry-up and wait stage for those inside and outside of the chambers. Members in both chambers continue to caucus and negotiate for hours over key policy issues until consensus is reached. Senate policy committees are scheduled to meet next week to consider Governor’s appointments, but no other business.

We hope to see budget targets and bills released in the coming week, but there is no sign of those being released as of yet. We will continue to provide updates on overall budget discussions and your organization’s key budget priorities as they become available. In the meantime, we are continuing to keep your budget priorities top of mind with the respective budget chairs.

With the passage of the AEA, teacher salary, and education bill in the House this week, the Senate will now have to determine whether they will take the House version and send it to the Governor which could mean lengthy caucus sessions for Senate Republicans and a long floor debate when and if that bill is considered on the Senate floor.