2021 Iowa Legislative Session - Week 18 Summary

The Senate has advanced a sweeping tax bill crafted as a compromise between the chamber and Governor Kim Reynolds. SF 619 cleared both the Ways and Means and Appropriations Committees last Tuesday, making it eligible for floor debate. Among other things, the measure would remove the revenue benchmarks the state must meet, or “triggers” for 2018 personal income tax cuts to take effect and phase out the inheritance tax. It would also shift mental health funding from county property taxes to the state general fund. In a nod to a House priority, the bill would require health insurers to compensate mental health providers at the same rate for telehealth consultations as for in-person visits.  

The House Appropriations Committee advanced its own tax bill, HF 893 today. It cleared the subcommittee in the morning, and then the full Appropriations Committee on a 20-5 vote. While the Senate and House proposals have some points in common, such as removing the income tax triggers, the House version does not change how mental health services are currently funded. It would also phase out the inheritance tax over a longer period, among other differences.

Last Tuesday Governor Reynolds announced the state will no longer accept federal COVID-19 unemployment aid effective June 12. One program extends unemployment benefits for 51 weeks beyond the state’s 26-week maximum. Another increases unemployment benefits by $300 per week, and a third allows workers to claim unemployment who are underemployed, self-employed, contractors, or can’t work due to COVID-19. The federal programs were initially signed into law under the Trump Administration as part of the CARES and Continued Assistance to Unemployed Workers Acts and extended under the Biden Administration’s American Rescue Plan.

Iowa Workforce Development (IWD) Director Beth Townsend noted in a memorandum recommending withdrawal from the programs that Iowa’s unemployment rate dropped from 10.2% in April of 2020 to 3.7% in March of 2021. She noted there are currently more than 66,000 jobs posted on IWD website, mostly in health care and retail.

“With the widespread distribution and availability of the vaccine, as well as the safety measures Iowa’s employers continue to take to protect their employees and customers, I believe above-requested actions are necessary to continue our economic recovery from the pandemic,” Townsend wrote. 

State unemployment benefits will remain unchanged, and companies will once again be responsible for unemployment claims—including those related to COVID-19—after June 12.

BrownWinick Government Relations:

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