DES MOINES, Iowa — Iowa lawmakers return to the state Capitol on Monday with a to-do list ranging from overhauling state taxes to possibly addressing issues with the privatized Medicaid program. Republicans, entering a second year of complete statehouse control, will work amid another budget crunch and a looming election year. Here’s a look at five key issues:
Gov. Kim Reynolds and Republicans have long said overhauling Iowa’s tax system is a priority, and their trifecta of control gives them enough votes to make it happen without Democrats.
Few details have been shared publicly, though Reynolds has indicated wanting to cut taxes for both individuals and corporations. She’ll give more information in Tuesday’s Condition of the State address.
“We want to make sure that we do it right,” she said at a recent legislative forum. “We want to make sure that it’s sustainable and that we’re being fiscally responsible.”
Reynolds and GOP leaders have all said they want to spur economic growth, a similar motive for Republicans in nearby Kansas when they implemented tax cuts in 2013. GOP lawmakers in Kansas rolled back parts of the tax law last year after declining state revenue.
Any tax proposal in Iowa comes on the heels of a federal tax law that state budget officials are still reviewing.
Reynolds wants to sign legislation early this year that addresses pollution in Iowa’s waterways. That may be easier said than done.
Republicans, who took control of the Legislature after the 2016 elections, continue to have different ideas about water quality regulation and how much to spend on the effort. They failed last session to approve related legislation. Other attempts in recent years haven’t succeeded.
Pollution from both industrial facilities and farm runoff are linked to high levels of nutrients in Iowa’s waterways and the Gulf of Mexico. A Des Moines water utility elevated the issue with a 2015 lawsuit that claimed drainage districts in three counties didn’t properly regulate the release of nitrate pollution into rivers. The Iowa Supreme Court determined the drainage districts have immunity to such lawsuits.
Republicans are currently at odds over water quality legislation that passed in the Senate last session. GOP lawmakers in the House supported a different plan.
House Speaker Linda Upmeyer, a Clear Lake Republican, was noncommittal about what version could win: “Wherever we can find agreement to get a bill downstairs, that’s what we’ll do.”
There also doesn’t appear to be enough Republican support to start paying into a natural resources trust fund created in 2010 by Iowa voters.
Lawmakers are expected to soon address a shortfall in Iowa’s current $7.2 billion budget, and a possible deficit in the next spending plan.
In 2017, lawmakers addressed previous shortfalls by cutting agency spending and borrowing about $144 million from emergency reserves. Legislators expect to pay back that borrowed money by the next budget year.
At the moment, a nonpartisan agency estimates the budget is expected to be below projections by about $37 million. The state has an expected shortfall of about $65 million for the budget going into effect July 1, according to the agency. Both figures could be impacted by the federal tax plan.
Rep. Pat Grassley, a New Hartford Republican and the head of a key budget committee, said he couldn’t offer specifics on possible cuts, only “our caucus is prepared to make the adjustments needed.”
Medicaid, the health care program for poor and disabled Iowans, has been under scrutiny since it was privatized in 2016 without legislative approval. It’s expected to be debated this year because of ongoing complaints from health care providers and patients about reduced services through three insurance companies.
One company has since dropped coverage after a contract dispute with the state. Representatives for the remaining two companies say they’re providing adequate services, an assertion backed by the Iowa Department of Human Services, the state health agency that oversees the privatized program.
Reynolds has been steadfast about her support for the privatized Medicaid system and maintains problems can be addressed without legislative action. But some Republican lawmakers have indicated openness to changing aspects of the program.
Upmeyer said recently the rollout has not improved enough “that anyone is comfortable with it.” She said she hopes new leadership, including within DHS, will make changes. Upmeyer expects action by the end of the session or lawmakers could step in.
“This system has to be in a better position,” she said.
The Iowa Legislature is still figuring out the long-term ramifications of a discrimination lawsuit by a former Senate Republican staffer who said she was fired in 2013 after reporting sexual misconduct in the workplace. A jury sided with the ex-employee, awarding her $2.2 million. The state settled the case for $1.75 million, an amount paid through the general fund.
The case gained national attention amid sexual misconduct accusations against powerful men in entertainment, politics and other industries.
Iowa Republican leaders are responding in different ways. House Republicans are hiring a human resources manager and requiring more harassment training. The Senate GOP office was initially more involved in hiring a human resources manager, but Majority Leader Bill Dix, a Shell Rock Republican, backed away from the effort after concerns by his staff about the position’s independence.
Dix also said he would to hire an outside group to address workplace culture in the Senate. He later dropped those plans, instead appointing Mary Kramer, a former GOP lawmaker with human resources experience, to do similar work on a voluntary basis.
Kramer said she will release recommendations to the Legislature by Jan. 8. It’s unclear how legislative leaders will respond. An internal Senate GOP report released in November revealed staffers for the caucus said they’re unlikely to report sexual harassment or workplace misconduct because of fear of retaliation.
Senate Minority Leader Janet Petersen, a Des Moines Democrat, said the retaliation issue needs to be addressed in the recommendations.
“Until we get better policies in place that protect the victims, I believe we will continue to see a toxic work environment in the Iowa Senate,” she said.