Iowa Senate committee moves budget bills as negotiations continue

by Robin Opsahl, Iowa Capital Dispatch
May 6, 2025

Though an agreement is yet to be reached on state spending for the upcoming fiscal year, the Senate Appropriations Committee moved four bills forward in a Tuesday meeting.

Senators passed four budget bills through the appropriations committee Tuesday, making them available for floor debate in the chamber. This does not mean the issues causing budget bills to stall – disagreements in spending between the two chambers and calls by some senators to pass legislation related to eminent domain – have been resolved.

The four bills all passed 13-9, with all Democrats and two Republicans, Sens. Sandy Salmon and David Sires, voted against. Other GOP members of the appropriations committee, including Sens. Dave Rowley and Dennis Guth, had signed onto the letter sent to Senate leadership saying they would oppose the passage of budget bills unless pipeline legislation was brought to the floor for debate, but they did not oppose the measures in the committee meeting.

Though the bills did not receive full support from the majority party, the Senate spending bills on the state’s education, health and human services, judicial, and Rebuild Iowa Infrastructure Fund (RIIF) budgets all passed the committee.

The education and HHS appropriations bills — Senate Study Bill 1231 and Senate Study Bill 1237 respectively — are both measures where House Republicans have put forward a different budget target than Senate Republicans. Much of the focus in budget disagreements has been centered on House Republicans’ ask for $14 million to continue pay supplements for education support staff, primarily paraeducators, a provision in the House standings bill.

Neither the House nor Senate appropriations committees have moved on the standings appropriations bill yet. But there are other areas of disagreement. The House education appropriations bill, House Study Bill 337, includes an $8 million increase for community colleges that is not in the Senate bill.

The committee advanced the Senate version of this bill without comments on the funding difference between the two chambers. However, Democrats did criticize the overall lack of funding increases going to the state’s higher education system — including community colleges — in the budget bill, saying the spending proposal will lead to cost increases for Iowa families sending students to Iowa colleges and universities.

Sen. Cindy Winckler, D-Davenport, said she “can’t think of a time in the history of funding education” that no new funding has gone to the state’s regent universities, community colleges and Iowa tuition grants. She said she found the proposal to keep funding for higher education at the same level as the current fiscal year “disturbing,” as the state’s higher education system is critical for meeting the state’s workforce needs and improving personal income growth.

“At a time when we have, by your definition, ‘plenty of money,’ it disturbs me that this particular budget comes with very little increase,” Winckler said. “… It’s historic, and you need to be aware of when you vote for this budget, if you do, that you are underfunding the future of Iowans and the workforce.

Sen. Jesse Green, R-Boone, said the budget keeps “steady funding towards higher education.” He also said he was shocked after being elected to the Legislature to learn “we subsidize college education to the amount that we actually do,” and said the current budget better aligns with Iowa voters’ expectations for state spending.

“This year, I’ll admit, when I was on the campaign trail, I had a lot of constituents ask to shrink government, literally asked us to shrink government, and here we have a status quo budget,” Green said. “So … I think this aligns with our targets. I think this aligns with what Iowans are expecting of us at this point in time, they expect us to put more money into their hands than in the government.”

Differences over nursing homes, Medicaid

The Senate health and human services budget bill also has differences when compared to its House companion, House Study Bill 342. The House version has $9 million more, a total of $25 million, for nursing facility provider reimbursement rate adjustments while the Senate allocated $16 million. Another difference is the inclusion of language stating Iowa’s Medicaid program funding “shall not be used for sex reassignment surgery or treatment related to an individual’s gender dysphoria diagnosis.”

Blocking Medicaid coverage for transgender Iowans is something the Republican-controlled Legislature has attempted to enact before, but similar measures were struck down in courts. Supporters said this year’s provision would be legal as Gov. Kim Reynolds signed into law a measure that removed gender identity as a protected class in the Iowa Civil Rights Act, one of the legal protections cited in court decisions.

But Sen. Molly Donahue, D-Marion, said the provision would still be found unconstitutional under the Equal Protection Clause, pointing to the 2021 district court ruling that found a similar law prohibiting Medicaid coverage for gender-affirming care violated state civil rights laws and the Iowa constitution.

“It restricts (Medicaid coverage) based on someone’s identity as transgender or non-gender conforming, and that is wrong and unconstitutional under Equal Protection,” Donahue said.

The Senate language goes further than previous Iowa laws, as it applies to all medical treatment related to a person’s gender dysphoria diagnosis. Keenan Crow, policy and advocacy director at One Iowa, said this provision could prevent transgender Iowans on Medicaid from accessing mental health care or other medical services not related to medically transitioning.

Rep. Ann Meyer, R-Fort Dodge, said last week House Republicans support a restriction on Medicaid coverage for sex reassignment surgery and hormone therapy, but would take up language that would not affect mental health care access for individuals with gender dysphoria.

The Senate Appropriations Committee did not make or recommend any amendments to the bills passed Tuesday, meaning changes would come on the Senate floor during debate on these or other areas of contention.

Sen. Tim Kraayenbrink, R-Fort Dodge, the appropriations committee chair, asked for committee members to be prepared for another meeting to discuss the standings bill and any other remaining legislation as soon as compromises are reached. He said that could be as early as Thursday, but that negotiations could take longer.

“This is always kind of a time we have to be ready and able just to meet when we can meet if we want to try to get out of here as soon as we can,” Kraayenbrink said.

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