Iowa Passes $9.4B Budget, Major Business Tax Cuts

The 2025 Iowa legislative session concluded with the passage of a $9.4 billion budget, alongside significant unemployment tax cuts projected to save Iowa businesses nearly $1 billion over five years. Lawmakers approved priorities such as paid parental leave for state employees, investments in rural and maternal healthcare, and funding for cancer research. The session also resulted in bipartisan agreement to allocate opioid settlement funds for prevention, recovery, and treatment efforts. Republicans emphasized fiscal responsibility, returning surplus funds to taxpayers, and supporting business growth, while Democrats criticized the budget for relying on reserve funds and not sufficiently addressing affordable housing, child care, or public education. Disagreements emerged over the impact of business tax cuts and the use of reserve funds, with Democrats warning of risks during economic downturns. Governor Kim Reynolds, who is not seeking reelection, stated she would continue pursuing her reform agenda in her final session next year.