This Week:

The second session of the 90th General Assembly convened at 10:00 am on January 8th. The first day of the session included opening speeches from leadership in both the majority and minority party, highlighting their goals and priorities for the upcoming session.

During his opening comments, Senate Majority Leader Jack Whitver highlighted the state's economic stability and indicated the caucuses' goal to further reduce taxes. "Last month the REC evaluated Iowa's economic status and the condition of the state budget and determined our state was experiencing organic growth. This growth is leading to revenues higher than expected, even with the largest income tax cut in Iowa history, the elimination of the tax on retirement income, the phasing out of the inheritance tax and a reduction in the income tax on Iowa businesses... In one sentence, here's the plan: cut taxes, control spending, reform government, and let Iowans be great."

Speaker Pat Grassley focused his remarks on education reform and ensuring Iowa continues to be a safe place to raise a family. "Our caucus talks a lot about keeping students safe. This means things. It means investing in school security. It means prioritizing school resource officers. It means protecting children's mental health. And it means ridding our classrooms and school libraries of inappropriate content."

Legislation that failed to pass during the 2023 session remains eligible for consideration. This week both the House and Senate began holding subcommittee meetings for both newly introduced legislation and priorities from last year that failed to be signed into law.

During the Condition of the State address, Governor Kim Reynolds unveiled a list of priorities for the legislative session including further reducing income taxes, increasing teacher pay, reforming Iowa's Area Education Agency's, reducing unemployment taxes for employers, extending Medicaid benefits for new moms, and consolidating Iowa's boards and commissions.

Governor Reynolds tax proposal, House Study Bill 543, was introduced on Wednesday following the address. The legislation accelerates the tax law signed in 2022 that phases down individual income taxes to 3.9% by 2026. Under the new legislation, Iowa's individual income tax would drop to a flat tax rate of 3.65%, retroactive to FY24, and then a flat 3.5% in FY25. Senate Republicans have indicated they would like to see Iowa's income tax eliminated entirely but have not released a tax proposal to do so.

Education reform continues to be top of mind, Governor Reynolds unveiled a plan to overhaul Iowa's Area Education Agencies (AEA's) in effort to give school districts more flexibility in how they provide special education services. Current law directs Iowa school districts to send state and federal funding to one of nine AEA's who then provide special education and other services to students. Under the new proposal, school districts can retain the funding and choose to continue to use their existing AEA, receive services from a neighboring AEA, or contract with private entities to receive services. School districts will also be able to partner with other school districts to share services, such as speech therapists.

Oversight of AEA's would transition to the Department of Education, the governor said the AEA's "have grown well beyond their core mission of helping students with disabilities, creating top-heavy organizations with high administrative expenses." Under the proposal, AEA's would be prohibited from offering services other than special education services to students.

Democrat legislators, educators, and education advocates have expressed concerns that the proposal would drastically impact and eliminate necessary services currently provided by the AEA's.

In addition, Governor Reynolds also announced a plan to raise the starting pay of teachers across the state. Iowa's starting teacher pay would increase from $33,500 to $50,000 and set a minimum pay of $62,000 for teachers who have at least 12 years of experience.

In addition to the Condition of the State, legislators also heard from Major General Stephen Osborn on the Condition of the National Guard, and Iowa Supreme Court Chief Justice Susan Christensen on the Condition of the Judiciary.

View speeches from legislative leaders and more below:

Next week: The legislature will convene of Tuesday and continue to hold subcommittee and committee meetings.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.