Iowa 2025 Legislative Session

JAMIE MERTZ Director of Dealer and Government Affairs [jamiem@ineda.com]

The session ended on May 15, 2025, after extending 13 days beyond the scheduled adjournment due to unresolved issues like eminent domain legislation, property tax reform, and state spending priorities. Republicans maintained a trifecta in Iowa’s government, with leadership changes in the House Minority Leader position. Below are some of the highlights of the 2025 session.

1. Major Initiatives:

• Cell Phones in Schools: HF 782 restricts cellphone use during classroom time, signed into law on April 30.

• Property Taxes: Efforts to reform the property tax system stalled, with plans to revisit next year.

• Unemployment Insurance: SF 607 lowers unemployment insurance taxes and adjusts contribution rates.

• Electronic Devices While Driving: SF 22 expands restrictions on device use while driving, effective July 1, 2025.

• Tax Credits: SF 657 overhauls Iowa’s tax credit system, eliminating some programs and creating new ones.

• Eminent Domain: HF 639 passed after prolonged negotiations, addressing landowner protections for pipeline projects.

• Medicaid Work Requirements: SF 615 introduces work requirements for Medicaid expansion recipients, with exemptions for certain groups.

• Natural Hazard Mitigation Financing: SF 619 provides disaster recovery assistance and establishes new funding mechanisms.

2. State Budget:

• The FY 2026 budget totals $9.424 billion from the General Fund, a 5.4% increase from FY 2025, with additional appropriations from other funds totaling $1.633 billion.

• Key increases include funding for health care, education, and infrastructure.

Here are some of the key takeaways from this year’s session.

• The Governor celebrated achievements in unemployment taxes, education, and rural healthcare while emphasizing property tax reform for next year.

• Republican leaders highlighted accomplishments in public safety, Medicaid, and education.

• Democratic leaders criticized the session for partisanship and special interest priorities.

As most of you have probably seen or read in the news, Governor Reynolds will not be running for reelection in 2026. Currently there have been only democratic candidates that have launched their bid for IA governor. Those candidates are Rob Sands (current IA state auditor), Julie Stauch (former IA political director for Pete Buttigieg), and Paul Dahl (from Webster City). On the Republican side, Eddie Andrews (Johnston, IA), Randy Feenstra (Hull, IA), and Brad Sherman (Williamsburg, IA) have all declared themselves as Republican candidates for Governor. 

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