This Week in the Iowa Legislature
Despite a blizzardy start to the week, Second Funnel Week ended with unseasonably warm temperatures and bright sunshine, marking the close of most policy committee work as the Legislature moves one week closer to adjournment. Both chambers canceled Monday’s schedule, compressing an already busy week into three very full days. Tuesday and Wednesday saw limited floor debate, focusing on their final subcommittee and committee work, while Thursday wrapped up final committee action and House floor debate. It was clear both chambers aimed to limit the number of bills advancing from the opposite side of the Rotunda, leaving hundreds of proposals short of the deadline. As the list of viable bills narrows, attention is now shifting to the final weeks of session, when budget and tax discussions will take center stage.
House Republicans advanced their property tax proposal out of full committee late Wednesday afternoon, following movement in the Senate last week. While both chambers have now taken steps on their respective plans, there is no sign of a final agreement. The Senate is intent on fundamental reform of the system while the House and Governor want to limit revenue growth. This issue will be central to the timing of adjournment this year.
Kratom Debate Highlights Internal Divisions
The House considered legislation related to regulating kratom, with floor debate revealing divisions within the Republican caucus. The bill would ban the products while amendments focused on establishing standards for the sale and distribution of kratom products, but members differed on how much regulation should be applied. The discussion highlighted differing perspectives on the role of state oversight in regulating emerging products with several House Republicans supporting an amendment opposed by their fellow Republican bill manager. The bill banning the products now awaits consideration by the Senate.
New Poll Reveals Strong Support for Tobacco Tax Increase
Tobacco tax policy returned to the conversation this week as the Iowa Health Initiative released a poll showing most Iowans (66 percent) support a $1.50 increase in the cigarette tax and a comparable tax on nicotine products. Lawmakers were eager to review the polling data and continued discussions around a potential increase. While no formal action has been taken, the issue remains part of ongoing conversations tied to both addressing Iowa’s cancer crisis and filling the Medicaid budget shortfall.
HMO/Healthcare Plan Tax Advances
The House closed out the second funnel week with floor debate on the HMO tax proposal
(HF 2739), advancing a measure intended to fill the Medicaid shortfall on an extremely narrow 53-40 vote with a number of Republicans in swing seats voting against. The proposal would increase the tax on health maintenance organizations as part of the state’s effort to draw down additional federal Medicaid funding to help offset projected budget pressures. The measure has faced significant opposition from insurers and advocates, who are concerned about rising healthcare premiums. The Senate is expected to try to advance the bill next week, but it is unclear if they have the votes. The Governor must sign the measure by March 31 for Iowa to qualify for enhanced federal funding.
House Advances Combined Education and Immigration Proposal
The House passed an expanded version of SF 2218 this week, combining multiple proposals related to employment verification and education policy. The legislation builds on the Senate’s original bill by adding provisions related to verification of work authorization, use of federal systems for employment eligibility, and penalties tied to fraudulent use of Social Security numbers which failed to move earlier in the Senate. The bill also requires professional licensure applicants must now go through SAVE (Systematic Alien Verification for Entitlements) to verify residency. This combination of bills comes after the House ran into political pushback on some of its previous proposals. The bill now awaits final Senate floor consideration.
Looking Ahead
With the second funnel now behind them, lawmakers will begin shifting their focus toward budget and tax discussions which will shape the final weeks of session. As policy bills continue to narrow, attention will increasingly turn to resolving major issues such as property tax reform, CO2 pipeline/eminent domain, and determining how to pass a state budget while facing a massive deficit. Budget targets from each chamber are expected in the coming weeks, which will help guide negotiations over spending priorities and signal the start of the final phase of the legislative session.