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Iowa Legislature to Miss Adjournment Date

Archived Industry News:Iowa Legislature to Miss Adjournment Date

Last Updated: 4/30/2021 11:08 AM

Iowa Legislature to Miss Adjournment Date

The Iowa Legislature’s scheduled adjournment date of April 30 will not be met and will be extended into next week. The House, Senate and governor are close to a budget agreement but are trying to work toward consensus on the property tax bill passed earlier this session by the Senate. Following are some of the issues of interest to the banking industry that are still making their way through the process.

Broadband Funding
An agreement has been reached to provide $100 million in broadband funding for fiscal year 2022. The grants are contained as part of the Administration and Regulation Budget, which passed the House last week, passed the Senate this week and was signed by the governor on Wednesday. The Iowa Bankers Association supports this effort to get more high-speed internet in rural areas.

Housing Assistance
Another area of agreement is around funding for the Workforce Housing Tax Credit Program administered by the Iowa Development Authority. The Legislature will increase the funding somewhere between $40 million and $50 million for either one or two years. They are also likely to increase to $5.5 million or completely lift the $3 million cap on the real estate transfer tax that goes to local housing trust funds. The IBA supports this effort.

Tax Updates
Any tax changes for 2021 are expected to be narrow due to ongoing uncertainty of a COVID economy. It does appear that the Legislature will agree to eliminate the income and growth triggers that were part of the 2018 tax bill resulting in a tax cut for individuals and compressing Iowa’s nine tax brackets to four. There is also expected to be a plan to phase out the inheritance tax for nonlineal decedents. Iowa is one of six states that still has an inheritance tax. The last possible piece of a tax package is property tax — it does not appear, at this time, that there is an agreement on what to do about rising property taxes, but the Senate passed a bill earlier in the session with several changes to the property tax system. The House may agree to some or all of the Senate property provisions.

No Banking on the Capitol Podcast Today
There will not be a new episode of the Iowa Bankers Association podcast, "Banking on the Capitol," this week. Watch for an end-of-session review after the Legislature adjourns.

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