BW Insights

2025 Government Relations Legislative Update - Week Eight

Written by Various BW Attorneys | Mar 10, 2025 1:37:51 PM

Capitol Update 

Week #8 was busy! The first major funnel of 2025 is behind us. There were 165 different subcommittees scheduled between Monday and Thursday. For comparison purposes, last year’s funnel week had 99 subcommittees. Last week (#7) 192 different subcommittees were scheduled. The BW team doesn’t attend ALL of those subcommittees, but does attend those that are relevant to BW clients, which is a significant number. Policy bills that don’t make it through the subcommittee and committee process are considered “funneled” or DEAD for the remainder of the session. However, Appropriations, Government Oversight, Ways and Means, and Leadership bills are alive until the end of session. Funneled bills sometimes come back as amendments to other bills or can be added to appropriations or end of session bills. The important legislative adage to remember is that “it’s not over until sine die.”

General Assemblies run in two-year cycles. We are in the 91st General Assembly, first session. In the first session of a General Assembly (2025) there is a longer time for bills to be requested, drafted, and moved through committees - 8 weeks. In the second session of a General Assembly (2026) there will be only 6 weeks. Another difference in the second session is that all the bills that have died this week, can be considered next session. In other words, bills from this session will be resurrected for the next session.

Property Taxes Take Center Stage. The Senate and House Ways and Means Committee Chairs announced a “complete reboot of the property tax system” in the form of a new joint property tax proposal. The identical bills, SSB 1208 and HSB 313 were filed on Thursday. Senate Ways and Means Chair, Dan Dawson (R-Council Bluffs), and House Ways and Means Chair, Bobby Kaufmann (R-Wilton), said they don’t expect the bills to move quickly because they want to get feedback on the impact of the proposals. They indicated their commitment to continue to work to perfect the bills over the next several weeks. The bills are extremely comprehensive and detailed, but a high-level summary is below: 

  • Appropriates $427 million for school funding for the purposes of decreasing property taxes paid for schools.
  • Caps “rate-limited property tax levies” to increases of up to 2% per year, excluding new valuation.
    • “New valuation” is defined to mean the increase from the current fiscal year to the budget year in taxable valuation due to the following: 
      • New construction;
      • Additions or improvements to existing structures that are not normal and necessary repairs; 
      • Net boundary adjustments, including annexation, severance, incorporation or discontinuance. 
    • After July 1, 2025, cities and counties cannot issue bonds payable from an “ad valorem” property tax levy for purposes of funding general operations. 
  • Phases out the current homestead tax credit and phases it into a homestead tax exemption. The homestead tax exemption is gradually increased so that by 2029, the exemption will be $25,000 for all property owners.
  • Increases the current veteran’s exemption from $4,000 to $7,000.
  • Increases elderly property tax credit for 70 years and up if the person makes less than 350% of federal poverty level.
  • Makes some changes to disabled veterans homestead credit for future issuance. 
  • Phases out the existing rollbacks by 2030.  
  • Eliminates brucellosis and tuberculosis eradication fund levy beginning July 1, 2025.

In the Know

Salary Increases. A bill that moved through a subcommittee and the State Government Committee this week, SF 544 would increase pay for state officials, including the Governor and legislators. Under the bill, the Governor would see a $100,000 increase (right now the Governor is paid $130,000) and legislators would see a $20,000 increase but not until 2027. State officials haven’t had a pay increase since 2005 and legislators haven’t had an increase since 2007. The Iowa Constitution, Article II, Section 25 states that “each member of the general assembly shall receive such compensation and allowances for expenses as shall be fixed by law but no general assembly shall have the power to increase compensation and allowances effective prior to the convening of the next general assembly following the session in which any increase is adopted.” Basically legislators cannot increase their pay during the current term in which they are elected. Therefore, the 2027 start date.  

Salaries for legislators, pursuant to Iowa Code Section 2.10, are currently $25,000 per year. Legislative Leaders salaries are set at $37,000 per year, the bill would increase that amount by $30,000. All legislators receive per diem payments which amount to $178 a day for legislators who live outside of Polk County and $133 a day for Polk county legislators. Legislators also receive .50 cents/mile and $300 each month for constituency expenses. The bill increases that amount by an additional $150 per month and includes a cost of living increase which is equivalent to non-collective bargained state employee increases with a max of 3% per year. 

Scene on the Hill

March 4, 2025: BW lobbyist R.G. Schwarm and Casey Ficek, Government Relations Manager for Delta Dental of Iowa, pose with Cy during the ISU Day at the Capitol.