Iowa’s legislative session ends after historic tax cuts, ethanol mandate, recycling law changes

DES MOINES — Another momentous session of the Iowa Legislature concluded early Wednesday, ending a five-month assembly that will be remembered for a $1.9 billion state income tax cut and the banning of transgender girls from playing girls sports in school.

The session also will be remembered for what did not happen.

For a second consecutive year, Gov. Kim Reynolds’ proposal for taxpayer-funded private school tuition assistance stalled; and after some Republicans threatened to jail teachers over library books and curriculum they said was offensive, majority Republicans did not pass any so-called “school transparency” legislation.

During the session, legislators also approved a requirement that the E15 higher blend of ethanol be sold at most Iowa gas stations, overhauled the state’s deposit recycling law, reduced state unemployment benefits and banned regulators from issuing new casino licenses for two years -- a move to preempt a pending application for a Cedar Rapids casino.

“All in all, we had a successful session to move our state forward and continue to make Iowa the greatest state to live, work and raise a family,” said House Speaker Pat Grassley, a Republican from New Hartford.

The Iowa Legislature adjourned at 12:16 a.m. Wednesday.

Senate Majority Leader Jack Whitver, a Republican from Ankeny, touted the work of Republican majorities in the 2021 and 2022 sessions, calling the two-year 89th General Assembly one of the most productive ever. He celebrated Republican-led policies like requiring schools to offer 100 percent in-person attendance to all students, banning face mask requirements in schools and passing state tax reductions in consecutive years.

“If there is one thing that I would tell Iowans about the 89th General Assembly, it is this: Republicans in the Legislature have had your back,” Whitver said. “We made sure you kept more of what you earned. We made sure Iowans had the choice to wear a mask and whether to attend school full time. We protected Iowans against the non-stop government overreach by some cities, schools and the federal government. We have had your back and we made sure common sense prevails in Iowa.”

Rep. Jennifer Konfrst, leader of the minority House Democrats from Windsor Heights, said she believes the Republican-majority Legislature fell short in addressing a worker shortage and the need for affordable child care and housing.

“Obviously I’m disappointed,” Konfrst said. “Instead, what we did was we did a lot of rewarding of special interests, we made sure that the wealthiest Iowans got a tax cut and we left a lot of Iowans behind. So I’m really disappointed. This session had potential and we missed the mark.”

Sen. Zach Wahls, leader of the minority Senate Democrats from Coralville, criticized majority Republicans for not taking action on inflation, high gas prices, a shortage of baby formula and a worker shortage.

“Because rather than tackle these issues head-on, Iowa Republicans have spent 2022 pouring gasoline on the flames of the culture war and made many of these challenges much worse,” he said.

11th-hour bills

In the waning moments of the session, the Republican majorities in the House and Senate inserted a provision into a catchall budget bill that would expand open enrollment in public schools by eliminating the requirement that a student declare and intention to open enroll by March 1.

Republicans said the provision provides more options and flexibility for students and families who may want to change schools after the deadline. Democrats noted the deadline was put in place so schools can plan for how many students they will have.

That catchall budget bill also included a ban on “Zucker bucks,” so named for the reported $419 million that Facebook Chief Executive Officer Mark Zuckerberg poured into two nonprofits, supposedly to provide COVID-19 relief, such as personal protective equipment for election workers. However, some people, chiefly Republicans, argued the funds had a partisan effect in favor of Democrats.

House File 2589 in part bans funds for conducting elections other than public money from federal, state and local governments. A House committee approved that language in a stand-alone bill in February, but it did not reach the full House.

Iowa joins a number of Republican-led states, including Georgia, Florida and Arizona, in banning private funds to help pay for public elections. Democratic governors have blocked similar bans.

Public education policy

Konfrst said from her perspective, the best news from the session was that Reynolds’ private school tuition assistance legislation failed to gain enough support in the Republican-majority House.

The proposal, Senate File 2369, would have put 70 percent of the state per-pupil funding, roughly $5,300, into an account that a family could use to send their student to a private school. The program would have been open to up to 10,000 students from families at or below 400 percent of the federal poverty level.

The Legislature virtually shut down for three weeks while the Republican governor tried to persuade more House Republicans to support the proposal. It never earned enough support from the 60 House Republicans to get 51 votes needed to pass it.

Republican majority legislators also did not pass any additional requirements for transparency in public school classroom curriculum and library materials.

That inaction came despite a start to the session that included Republican Sens. Brad Zaun and Jake Chapman threatening to educators with jail time, and then drafting legislation that would have created jail sentences for educators who distribute materials that are deemed obscene. And in his session-opening remarks, Chapman asserted there was a “sinister agenda” by “those who wish to normalize sexually deviant behavior against our children.”

Income tax cuts

Most Iowans should start to see a reduction in the amount of state income tax taken out of their paychecks. The reductions are being phased in over five years, with most Iowans eventually paying a flat 3.9 percent state income tax rate. The new law also eliminates the state tax on retirement income.

Once the reductions are fully phased in, the state will collect $1.9 billion less a year in taxes.

Supporters, mostly Republicans, said House File 2317 will create a state income tax system that will be “flat and fair.” Opponents, mostly Democrats, say the reductions will disproportionately benefit the highest wage-earners, and that the future state revenue reductions will threaten the ability for state government to fund services like public education, health care and public safety.

Ethanol requirement

Reynolds scored a victory on one of her priorities for the past two sessions with approval of House File 2128, which requires Iowa gas stations to sell the E15 blend of ethanol in at least one pump.

While E10 is widely available, just 10 percent of Iowa stations offer E15, according to the Iowa Renewable Fuels Association. Smaller stations could apply for an exemption and the state will make financial assistance available for stations that will need to upgrade their infrastructure to store and provide the E15 ethanol blend.

Reynolds had to strike a compromise between groups that have traditionally supported her — farmers, ethanol producers and fuel retailers. Proponents said the mandate supports Iowa’s agriculture economy, reduces reliance on foreign oil and fossil fuels, making it more environmentally friendly. Critics argued corn-based ethanol can be harmful to the environment because it is a less-efficient fuel and corn production produces more carbon dioxide emissions and endangers water quality.

Bottle bill

After years of attempts, legislators finally overhauled the state’s deposit recycling law. But not everyone agreed whether the changes will be good or bad for the recycling program.

While keeping the nickel deposit on beverage containers that consumers pay the same, Senate File 2378 increased the funding to redemption centers that accept returned recyclable bottles and cans. But it also provided more exemptions for grocery stores to opt out taking empties, and did not expand the types of recyclable beverage bottles that qualify for the program.

Jobless benefits curtailed

Iowa’s unemployment compensation system, dating from the 1930s when it was the sole support for out-of-work Iowans, was changed after Reynolds declared “the safety net has become a hammock.”

As a result of House File 2355 — passed largely on party lines — the most an unemployed job-seeker in Iowa can claim will be 16 weeks of jobless benefits. That will be longer only than three states.

The number of weeks an Iowan who loses a job because the employer went out of business will be lowered from 39 weeks to 26. It also requires an unemployed worker to take a job sooner, even if it pays less than the previous job.

Transgender athletes

Statehouse Republicans passed, and Reynolds signed into law, legislation that prohibits transgender girls from competing in girls sports. Iowa became the 11th state to enact such a ban.

Republicans argued House File 2416 was needed to preserve girls athletics, even though there are no examples in Iowa of transgender girls dominating girls athletics. The statewide body that governs girls athletics had a transgender athlete policy in place for years.

Democrats and advocates called the new law mean-spirited and warned such policies can create a feeling of exclusion in LGBTQ people, who are already subject to higher rates of suicidal thoughts.

Lawsuit reform

One unexpected turn of events in the Republican-controlled Legislature was majority party members breaking ranks to kill a bill to prohibit employer vaccine mandates and expand liability protections for Iowa truckers.

Twelve House Republicans refused to support a procedural move to suspend the rules to consider an amendment ruled not germane — or relevant — to the Senate File 2139, which originally defined a “wrecked of salvage vehicle.” The amendment replaced that language with legislation to create new liability protections for truckers and fine employers up to $50,000 if they required workers to get COVID-19 vaccinations.

“When we made the decision, we had 51 votes,” House Republican spokeswoman Melissa Deatsch said at the time, referring to the decision to bring the bill up for debate. “Obviously, that did not come to fruition.”

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