Iowa Legislative Session Nears End with Key Issues Unresolved

Budget differences and competing property tax relief plans highlight tensions as lawmakers race to finish work.

Apr. 13, 2026 at 2:54am

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A dynamic, abstract painting of the Iowa State Capitol building in Des Moines, with overlapping geometric waves of deep blue, forest green, and burnt orange colors, conveying the fast-paced, high-stakes negotiations happening inside the building.As Iowa lawmakers race to resolve budget and tax relief differences before the legislative session ends, the state capitol building takes on an abstract, kinetic energy.Des Moines Today

As Iowa's legislative session approaches its conclusion, two major priorities remain unresolved - finalizing the state budget for the upcoming fiscal year and determining a plan for property tax relief. Governor Kim Reynolds and the legislature are at odds over the budget size, while the House, Senate and governor have put forth competing property tax relief proposals. Other bills, including a tax hike on Medicaid health plans and measures to ease foster care requirements and provide child care assistance, have also been passed in recent days.

Why it matters

The unfinished business around the state budget and property taxes reflects the ongoing political tensions and negotiations between the governor's office and the legislature as they work to wrap up the session. These issues have significant implications for Iowa taxpayers, state services, and the overall fiscal health of the state.

The details

Governor Kim Reynolds has proposed a $9.67 billion budget, while the legislature wants a $9.62 billion budget. On property taxes, the House and governor's plans call for a 2% revenue cap, while the Senate's plan has a 'soft cap' that would vary based on inflation. The Senate bill also includes increased tax credits for Iowa residents. Reynolds said the conversations around resolving these differences have been productive.

  • The Iowa legislative session is nearing its end.
  • Governor Kim Reynolds proposed a $9.67 billion budget for the upcoming fiscal year.
  • The legislature wants a $9.62 billion budget.
  • The House and governor have proposed a 2% property tax revenue cap, while the Senate plan has a 'soft cap' tied to inflation.

The players

Kim Reynolds

The Governor of Iowa who has proposed a $9.67 billion state budget.

Iowa Legislature

The state legislature, which wants a $9.62 billion budget and has put forth competing property tax relief plans.

Mark Costello

A Republican state senator who supported a bill to increase taxes on certain Medicaid plans.

Molly Donahue

A Democratic state senator who expressed concerns that the Medicaid tax hike would lead to higher premiums for families.

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What they’re saying

“We are asking what are top priorities for each chamber, for the governor's office, seeing how we can bring those together to get to a final bill. And yesterday that, honestly, the conversations went really well.”

— Kim Reynolds, Governor

“House file 2739 benefits Iowans on Medicaid and our providers who serve those Iowans. This is a strategic bill to address health care costs.”

— Mark Costello, State Senator

“Those costs are not going to be absorbed by the insurance companies. They are passed directly on to the people. That means higher premiums for families.”

— Molly Donahue, State Senator

What’s next

The Iowa Legislature must reach a compromise on the state budget and property tax relief plans before the session ends.

The takeaway

The unfinished business around the state budget and property taxes reflects the ongoing political tensions and negotiations between the governor's office and the legislature as they work to wrap up the legislative session. These issues have significant implications for Iowa taxpayers, state services, and the overall fiscal health of the state.