Today marks day 78 of the scheduled 100-day legislative session. Work on the state budget is well underway while a final push is made on outstanding policy issues.

Policy issues include the Governor’s biofuels bill (HF 2128), the Governor’s Education Policy proposal (HF 2577 and SF 2369), unemployment benefits (HF 2355), and workforce proposals (HF 2569 and SF 2361). The unemployment benefits bill has passed both chambers, but they have not yet agreed on whether to impose a one week waiting period for benefits. On the workforce bills, the House and Senate are still working on changes to the sections that affect local government zoning and state building codes.

Additionally, the Senate still has two major tax proposals they are continuing to push, but it’s unclear if the House has any appetite for more tax legislation this year. The first one, SF 2372, passed the Senate 43-6 and includes a mix of tax cuts, changes to net operating losses and changes to sales tax exemptions. The second, SSB 3157, would fund the Natural Resources and Outdoor Recreation Trust Fund and replace local option sales taxes with a one penny increase in the state sales tax. SSB 3157 is still in the Senate Ways & Means Committee.

Legislation (HF 2552) from the Department of Revenue to make a number of changes passed both chambers last week and is headed to the Governor. PDI, along with the Iowa League of Cities, had concerns about Division 11 of the bill which converts the current Business Property Tax Credit from a capped credit to an uncapped, permanent revenue reduction and creating a backfill of $125 million to reimburse local governments. PDI registered in opposition to the bill after reviewing the Legislative Services Agency’s Fiscal Analysis (Link) which shows that local governments will begin to lose revenues from funding this credit starting in the FY 2030.