Legislature works overtime to finish work

Yesterday was the last scheduled day of the legislative session, but we're not quite done with our work for the year, so we're headed into overtime.

Don’t worry, taxpayers. We don’t get paid overtime. And now we take several steps to ensure that we don't waste taxpayer dollars: no more per diems, legislative clerks or legislative pages.

We will keep working until we have passed a responsible budget for fiscal year 2026.

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House Republicans released our spending plans for fiscal year 2026. Our goal is to be responsible and conservative in our budgeting, while continuing to fully fund prior commitments.

The plan spends $9.453 billion starting July 1. This represents an increase of $505 million over the current year.

The following chart breaks down the funding by category and compares the House budget to the Senate budget:

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The largest area of growth in the budget is Medicaid. This increase is due to two primary factors: (i) the wind-down of federal COVID funds and (ii) rate increases for nursing homes, dentists, pharmacies and other providers.

Funding for Iowa’s public schools was set earlier in April at a 2% increase in the state cost per pupil. (The House proposal was for a nearly 4% increase, but the Governor and Senate would not budge from their 2% proposal.)

The increase is over $107 million and includes a $5 per student increase for per pupil equity, increased operational sharing funds for districts and a higher contribution for school transportation costs.

The House Republican budget also provides an $8 million increase for community colleges, additional funds to the Regents Universities for new initiatives and increased funds for educational savings accounts.

As with April’s SSA funding, the Governor and Senate have jointly announced a budget agreement. One of our biggest objections to their budget is that it does not include funding for para-educators and school support personnel that was committed last year.

So that is one of the biggest differences between our budget and theirs: House Republicans are keeping their word to para-educators to include $14 million of funding that was first enacted last year.

Those funds are being used by school districts to raise pay to those serving special education students and other needed services. Unfortunately, the Senate/Governor budget does not include those wages.

The House Republican budget also includes additional funds for other priorities, including meeting the state’s constitutional requirement to provide indigent defense services, helping victims of crime, supporting job training programs for students and providing support for veterans services.

Action on these priorities is moving quickly as they will be eligible for debate early next week (May 5).

Health and Human Services

I think it’s worth drilling down a bit on the House’s Health and Human Services Budget.

The proposed House budget appropriates $2.47 billion of state general funds to HHS and Veterans Affairs. This is a $253 million increase compared to FY2025.

In total, with federal matching funds, the House budget appropriates over $6 billion toward Medicaid, child care, child welfare, public health, aging, and veteran services in Iowa.

This budget appropriates an additional $20 million on top of the March Medicaid estimate for FY26.

While being in the majority, House Republicans have always fully funded Medicaid. Allegations that Medicaid is not being funded is inaccurate and is fearmongering for political purposes.

This budget provides necessary increases to the following Medicaid providers:

Nursing homes — The House has fully funded Iowa’s nursing homes at the rate developed through cost reporting. This $25 million of state funding amounts to an almost $70 million increase to Iowa’s nursing homes to care for Iowa’s elderly.

Home and community-based services — The House budget provides a $3 million increase to care for Iowa’s disabled population in their communities, which amounts to $8.5 million in total funding increase.

Maternal health — Increases rates for prenatal, delivery and postnatal care.

Dentists — Provides $3.1 million to increase dental rates to the 85% Medicare benchmark.

Pharmacy — Provides a $1 million increase to the Medicaid dispensing fee.

Prosthetics — Increases prosthetic and orthotic provider rates by $295,000.

Autism Coverage — Fully funds adding autism coverage to the Hawk-i program ensuring over 600 youth have access to autism care.

Commitment discharge — Adds in the majority of HF 385, which requires responsible discharge planning for individuals committed for substance abuse or mental health. (This was a good bill that I voted for, but it did not survive the second funnel in the Senate. Inserting it in the budget bill is a way to give it a second chance.)

Commitment hearing testimony — Adds in HF 313, which allows PAs and ARNPs to testify at committal hearings if they witnessed the examination, they reviewed the report and the professional that examined the individual is unable to attend the hearing.

Adoption and foster care — This bill increases foster care and adoption subsidy rates by 5%.

Emergency medical services — Funds HF 977 to expand federal support for Iowa’s EMS providers. This bill will enable additional tens of millions of dollars to come to the state to support rural EMS.

Personal needs allowance — Increases the monthly allotment for Medicaid individuals in nursing facilities to retain $65 per month to pay toward personal needs.

SNAP — double up food bucks — Fully funds the $1 million in HF 970. This bill importantly provides a $1 million appropriation to the Double Up Food Bucks Program if Iowa receives federal approval to include healthy food based on necessary nutrition for the Supplemental Nutrition Assistance Program.

Veterans — Fully funds HF 1000, which appropriates $250,000 to the veterans service organization grantprogram to provide matching funds for employing new staff to assist veterans with federal claims.

Dementia coordinator — Requires DHHS to hire a state dementia coordinator to help Iowans and their family members with accessing dementia care.

Radon testing kits — Creates a $20,000 standing appropriation to DHHS to be used to make radon test kits available, free of charge, to homeowners and renters in Iowa.

Death tax

In 2025, the income tax rate dropped to a flat 3.8% for all taxpayers. That change alone has made Iowa’s tax climate much more competitive and has kept a lot more of Iowans’ money in their own pockets.

But another big tax change happened this year — Iowa no longer has inheritance tax.

In 2021, a tax law change phased out Iowa’s inheritance tax at a rate of 20% per year until it was totally repealed on Jan. 1, 2025.

Most property passing from a decedent was already exempt from the tax, but there were situations where tax was owed. For example, transfers to nieces, nephews, aunts, and uncles were still taxable.

But in 2025 that is no longer the case. Inheritance tax is gone, and income tax is flat.