The Iowa Capitol on Feb. 25, 2025. (Photo by Kathie Obradovich/Iowa Capital Dispatch)
Lawmakers could wrap up the 2025 session as early as Wednesday – but there are still several spending and final policy measures left on the chambers’ calendars before legislators can head home.
Before ending the session, lawmakers must approve the state’s budget, the collection of bills funding Iowa’s state departments, agencies as well as meeting other spending obligations. Several of the appropriations bills for fiscal year 2026 passed Monday and Tuesday, some moving between chambers and others going to Gov. Kim Reynolds.
The spending bills sent to the governor reflect the budget agreement reached between the Senate and House Republican majorities earlier in May. Some of the budget items House Republicans had requested – like $14 million for paraeducator pay and $8 million for the public safety equipment fund – have been provided through a one-time allocation from the Sports Wagering Fund, which currently contains $40 million.
The Senate Appropriations Committee approved Senate Study Bill 1240 Wednesday, the bill making this appropriation, as well as Senate Study Bill 1241, the standings appropriations bill.
In addition to the budget bills being passed, there are several pieces of legislation on policy changes on the list for lawmakers to consider. Here is what the Iowa Legislature has passed so far Wednesday:
Budget bills passed
Judicial branch: Senate File 648, the bill appropriating funding for Iowa’s courts, was sent to the governor by the House in a 86-1 vote. It allocates $221.83 for the state’s judicial branch and includes a 2.5% increase to judicial officer salaries, totalling $1.27 million.
Rep. Ross Wilburn, D-Ames, said he appreciated the raise for judicial pay included in the budget, though he supported further increases so Iowa can enlist and keep qualified judges in the state. He echoed comments made by Sen. Matt Blake, D-Urbandale, Tuesday, pointing to a recent situation where only two candidates applied for a judge opening in Iowa, as a reason why Iowa needs to increase pay.
“I think it’s critical in terms of recruitment, retention, retirement, that we stay competitive, that we have access to an adequate pool of talented justices, court officers, available,” Wilburn said.
Rep. Brian Lohse, R-Bondurant, the bill’s floor manager, said he spoke Thursday morning with former Iowa Rep. Dustin Hite, who was appointed as a district court judge in 2024, who said he believed he was “a better judge because he had been in private practice.” Increasing pay for judges will help the state recruit more lawyers in private practices to take judgeships, Lohse said, who can offer different expertise than county attorneys and lawyers in the public defender’s office or indigent defense – the people who typically take judge positions.
“We have to continue to fight to increase judge pay to a point where it is truly competitive, so that we can get the best applicants available – and from the positions and those areas of the law where we need really good, qualified, well-rounded judges,” Lohse said.
He also said the budget includes a change based on issues identified during the judicial branch’s review of a coding error that caused the misallocation of court debt funds. Lohse said it was discovered roughly $140,000 each year in fees paid by individuals for a court interpreter were being transferred to the jury and witness fee revolving fund instead of into the general fund as intended. The budget bill includes a policy change to continue transferring this money into the revolving fund, he said.
Justice system: Senate File 644, passed 60-27, provides $924.9 million for Iowa’s justice system, including funding for the state’s law enforcement entities including the departments of justice, corrections and public safety. Of that amount, $703.1 million comes from the general fund.
Lohse, who also managed the justice system spending bill, said the measure includes $1.07 million for indigent defense, raising the pay rate by roughly $2 per hour, in addition to transferring $1.95 million from the Indigent Defense Fund to the state Public Defender’s Office for the hiring of 13 new staff.
Rep. Charley Thomson, R-Charles City, said though he supported the bill and Lohse’s efforts to provide funding for indigent defense, the state is still not meeting its legal or moral obligation to provide adequate funding for the lawyers representing people who cannot afford a lawyer.
“It’s pretty simple,” Thomson said. “It’s not that expensive. Yet we are paying so little as a state that we are not able to attract very many competent counsel to do the job while we’re making progress in raising that rate, it is still hopelessly too low. … At some point, sooner rather than later, we’re going to get sued and be compelled to pay adequate amounts.”
Lohse said he agreed with Thomson, saying House lawmakers will come back in 2026 to “continue to fight for indigent defense to do what we can, both in terms of dollars, but also in other legislation.”
The measure also includes $150,000 for the victims assistance grant fund through the Iowa Attorney General’s office to provide services for human trafficking victims, and has a transfer of $100,000 from the public defender’s office to the College Student Aid Commission, providing funding for the Rural Attorney Recruitment Assistance Program.
Rep. Megan Jones, R-Sioux Rapids, proposed but withdrew an amendment to limit the use of “geofencing,” the ability to obtain information from devices being used within geolocational boundaries, to monitor mobile phone use within the Iowa Capitol. The Iowa Division of Criminal Investigation used “geofencing” software in the sports wagering probe that resulted in four Iowa State University athletes facing charges.
She said filings in a lawsuit on the sports wagering case contained information showing geofencing software had been used at the Capitol, a practice she said violated the Fourth Amendment of the Constitution, protecting people from unreasonable searches and seizures from the government.
“The innocent, our constituents, Iowans, our visitors to this very building suffer at the very contemplation that their phones were being geofenced for whatever legal purpose and monitored while they were in this building,” Jones said. “How sad it is that these words have to even be spoken in this building. Iowans, you deserve to be safe in this building, in these hallowed walls. You deserve to be able to seek redress against your government without being feared of being spied on.”
The measure heads to the governor for final approval.
Policy bills moved through
Unemployment insurance tax: Senate File 607, a bill making changes to Iowa’s unemployment insurance taxes, passed 32-16.
The legislation proposed by Reynolds would cut the taxable wage base used to calculate unemployment insurance taxes in half from 66.7% to 33.4%. It includes other changes, like reducing Iowa’s unemployment tax tables, and excludes wages paid from employers to employees working in other states from the definition of “taxable wages” if the other state extends reciprocity to Iowa.
The measure was amended by Sen. Adrian Dickey, R-Packwood, to remove a section of the bill collecting surcharges from employers of 10% of contributions made to unemployment insurance, if the employer’s average benefit ratio from the past three years was at or more than 1.25.
Democrats proposed multiple amendments, including measures to reverse Iowa’s cuts to unemployment benefits in recent years, each of which failed. Another amendment would have waived work search requirements for people who have seasonal employment.
Senators opposing the legislation and who tried to amend it said this legislation does not help workers but benefits the companies that lay them off. They said it causes residents to find work in another state rather than try to figure out a complicated, burdensome system that won’t provide aid for as long as they need.
“Our unemployment system is rigged for the employers, particularly with this bill,” Sen. Molly Donahue, D-Marion, said. “It is the workers who hold those businesses up, and we need to do better by those workers, not give more breaks to the employers who are laying them off.”
Sen. Bill Dotzler, D-Waterloo, said he was “ashamed” of Senate Republicans for how they’re treating workers with the legislation by not allowing more time to take advantage of benefits and helping businesses more than employees.
Providing unemployment insurance to Iowans doesn’t mean they’re just being handed a check, Dotzler said, it means they have the time to better themselves for employment while they seek it and won’t have to worry as much about finances in the process.
Dickey called concerns brought up by Democrats “old, tired talking points,” and said the problems they worried about with previous unemployment legislation have not come to fruition. Iowa’s population grew between 2023-2024, he said, countering statements that Iowa is losing workers in favor of going to other states with better pay, benefits and unemployment programs.
For the lawmakers who said the process to apply for unemployment is too complicated, harming those who need aid, Dickey said they’d be happy to know that Iowa Workforce Development will launch updated websites and materials this summer.
Dickey acknowledged there are flaws in the current system, including the state’s unemployment fund, and said the Legislature should take time next year to take a hard look at how unemployment works in the state. However, Iowa is third in the nation for average weekly rate of benefits at just over nine weeks. He asked why Iowa would want to be like its neighbors, who have longer averages.
“The Republican Party has been the party to stand up for Iowa workers,” Dickey said. “We are the party that wants our workers to aspire more than desiring an unemployment check.”
The House was debating similar legislation Wednesday afternoon.
Expanded Medicaid work requirements: The Iowa House approved an amendment from the Senate on the bill setting work requirements for the Iowa Health and Wellness Plan (IHAWP), sending it to Reynolds for final approval.
Senate File 615 requires IHAWP recipients to work at least 80 hours per month in order to remain eligible for health coverage through the expanded Medicaid program that covers able-bodied adults from ages 19 to 64 with incomes 133% or below the federal poverty level. It includes exceptions for people with high-risk pregnancies, those with children under age 6 and those in substance abuse treatment programs for up to six months.
The measure also includes “trigger” language that would end IHAWP if the federal government approves, then later rescinds, approval of work requirements.
The Senate amended the bill to remove a provision included in a House amendment to the bill directing Iowa HHS to study and return to lawmakers before the 2026 legislative session with a report on the Medicaid for Employed People with Disabilities (MEPD) program.
The House approved this change. Rep. Carter Nordman, R-Adel, said he was still in support of the study, but said the language was not necessary as Iowa HHS director Kelly Garcia has made a “commitment” to study and discuss the program with lawmakers before the next session.
“I will also commit, while we will be taking this out of the bill, (to) working with Rep. Turek and Director Garcia in the interim to see to it that this still gets done,” Nordman said.
Rep. Josh Turek, D-Council Bluffs, said this provision was a step to ensure “work without worry” efforts – removing the Medicaid asset and income limits for people with disabilities – moves forward. A subcommittee meeting was held on a bill making these changes to Medicaid in 2025, but the measure did not advance.
He said he appreciated work Nordman has done on this issue, and said the issue was with the Senate.
“I think that we should send this back to them,” Turek said. “Let them choke on it.”
Turek and other Democrats also took issue with the bill as a whole. Rep. Beth Wessel-Kroeschell, D-Ames, called the MEPD study “the only good piece in the bill.”
“The governor has already requested this waiver unilaterally,” Wessel-Kroeschell said. “So then the only thing left is to gamble with the lives of over 180,000 Iowans who would lose their health insurance. … That’s the gamble. Stop gambling with the lives of Iowans who make less than $17,000 a year.”
Reynolds and the Iowa Department of Health and Human Services have submitted a waiver request to the federal government to implement work requirements. The HHS proposal is slightly different from the legislative proposal, requiring Iowans on IHAWP work 100 hours per month or earn the equivalent to working 100 hours per month at $7.25 per hour. People can also retain coverage if they are enrolled in education or job skills programs.
The legislation was approved 56-30 and heads to Reynolds’ desk.
This story will be updated.