The 2026 Iowa Legislative Session is officially underway, and lawmakers moved quickly to outline priorities that will shape Iowa’s economy and communities. Below are highlights from the week, the legislation we’re watching, and how it impacts businesses.
Governor’s Priorities
On Tuesday night, Governor Reynolds outlined her priorities for her final year in office, including providing property tax relief, transforming healthcare in Iowa, and expanding school choice. You can read the Governor’s speech here and watch the video here.
Property Tax Reform
Property tax reform will be a major topic this session with the Governor, Senate Republicans, and House Democrats having each introduced their proposals. House Republicans are expected to introduce their version soon. Below are high-level overviews of each:
Governor Reynolds (SSB 3034/HSB 563)
- Create a 2% revenue cap for local governments
- Move property assessments from every two years to every three years
- Mandate a 20-year sunset for Tax Increment Financing
- Freeze taxes for Iowans 65 or older if their home is valued at $350,000 or less
- Create a tax-deductible saving account for first time home buyers similar to the 529 education savings accounts
Senate Republicans (SSB 3001)
- Phase out current rollback system
- Establish a 2% limit for city and county tax levies
- Phase in a 50% homestead property exemption
- Index the gas tax to inflation
- Allow additional local option sales tax for local governments with voter approval
House Democrats
- Triple the Homestead Tax credit
- Institute an annual 4% property tax growth cap
- Freeze property taxes for Iowan’s 65 or older
- Rebate $1,000 to homeowners and $500 to renters
- More state support for safety workers’ (fire, police, EMS) retirement funds
The outcome of these property tax debates will have major implications for economic and community development. Predictable taxes matter for business investment decisions and long-term planning. At the same time, changes to levy limits, rollbacks, TIF policies, and revenue caps could significantly affect local governments’ ability to fund infrastructure, housing, placemaking, and economic development tools.
Greater IC will remain engaged as these proposals evolve. Sustainable growth requires balance, and we look forward to working with legislators on this complex issue.
Housing, Livability & Community Attraction
While housing was not the central focus of week one, it remains closely tied to nearly every major proposal under discussion. Property tax policy, infrastructure investment, and local revenue authority all influence a community’s ability to grow housing supply, support workforce housing, and remain competitive.
Livability is not a side issue – it is an economic strategy. Communities that can offer attainable housing, strong schools, vibrant downtowns, and connected infrastructure are better positioned to attract and retain talent, support employers, and create an entrepreneurial ecosystem for economic growth.
Looking Ahead & Getting Involved
Greater Iowa City, Inc. will continue to engage legislators, partners, and peer organizations to advocate for our region throughout the session. You have an important role in this work. Please reach out about the issues impacting your business and participate in our upcoming legislative events so our elected officials can hear from you directly.
February Legislative Forum
Friday, February 6
4:00 pm – 5:00 pm
Urban Acres, Coralville
Register Here
Legislative Reception in Des Moines
Monday, February 23
5:00 pm – 7:00 pm
Big Grove, Des Moines
March Legislative Reception
Friday, March 13
4:00 pm – 5:00 pm
MERGE, Iowa City
Register Here
