Week 4 Legislative Update

Legislative Update
The 2022 Iowa Legislative Session

Week of January 31, 2022

This week in the Iowa Legislature
The legislature kept busy on a variety of topics this week including biofuels, tax policy and education funding. The House kicked off floor debate this session by passing the Governor’s biofuels bill. HF 2128 passed with bipartisan support on a vote of 82-10. This occurred in the middle of the week as policy makers hustled between subcommittee and committee work as they scurry to move more of the 200+ bills introduced this week alone before the quickly approaching funnel deadline.

Legislative Tax Proposals
After introducing their tax policy bills last week, both chambers swiftly took action to move HSB 626 and SSB 3074 through their respective subcommittees on Monday after lengthy comments from stakeholders and the public. Both bills move Iowa’s income tax structure to a flat tax, the Senate offering a 3.6% flat tax to be phased in while the House proposes 4%, mirroring the governor’s recommendation.

The most popular provisions of the Senate bill are the water quality and conservation funding (IWILL) proposal and the lowering of the state’s corporate tax rates. Advocates for the inclusion of the IWILL believe it will improve a community’s ability to reinvest in quality-of-life projects and will attract people to visit and move into the state. The business community spoke in favor of lowering corporate income tax rates, which they stated are the third-highest in the country. The House proposal doesn’t include either provision. Advocates urged the House to include both provisions in their bill.

The Senate passed their bill out of Committee on Thursday on a party-line vote. It’s now eligible for debate on the Senate Floor. Senate Republicans say the bill will make Iowa more competitive and modernizes Iowa’s tax system. Democrats say the bill favors millionaires and out-of-state corporations, not the average Iowan.

Supplemental School Aid Proposals
Education funding proposals were also released this week. The Senate Republican’s proposal, SSB 3090, provides a 2.25% increase in state aid for schools, just under the 2.5% increase recommended by the Governor and the House, HSB 658. The Senate bill quickly moved through the process passing the Education Committee on a party-line vote and can be debated as early as Tuesday. Democrats countered with a separate education funding proposal, suggesting a budget increase of 5% which would total about $300 million in additional funding for schools. Senator Wahls noted this would be a return of tax dollars back to the taxpayers of Iowa.

The End of the Pandemic
On Thursday the Governor extended the Public Health Disaster Emergency Proclamation for the last time, noting it would continue only through February 15, 2022. She first issued the proclamation on March 17, 2020 and has extended it several times. Reynolds said, “We cannot continue to suspend duly enacted laws and treat COVID-19 as a public health emergency indefinitely. After two years, it’s no longer feasible or necessary. The flu and other infectious illnesses are part of our everyday lives, and coronavirus can be managed similarly. State agencies will now manage COVID-19 as part of normal daily business and reallocate resources that have been solely dedicated to the response effort to serve other important needs for Iowans.”

Looking Ahead
It’s about to get busy! This last week the mornings were earlier and the nights longer. Subcommittee and committee work will continue to increase and intensify as we head to the first funnel deadline only two weeks away! As a reminder, a list of scheduled committees and subcommittees with their virtual access information can be found at the provided link. If you have challenges connecting with the virtual link, you can always call in as well.

We expect both chambers to wrap up their work on the supplemental school aid bills this week, continue to move their tax bills along, and ensure their unemployment bills make the funnel deadline.