Iowa Republicans Reach $9.4 Billion Fiscal Year 2026 Budget Agreement

Iowa House and Senate Republicans have reached a $9.4 billion budget agreement for the 2026 fiscal year, marking a 5.3% increase over the current year's budget. The budget includes funding priorities such as $14 million to boost paraeducator pay, $5 million for special education, $8 million for public safety equipment, and additional support for community colleges and nursing homes, much of which will be financed through the state's Sports Wagering Fund. Despite the plan requiring a $900 million withdrawal from state reserves due to projected revenue declines from recent tax cuts, Republican leaders emphasize the use of surplus funds as a strategic approach, expecting revenues to rise in the long term. Democrats criticize the budget for relying on one-time funds and warn of potential fiscal instability, calling the plan irresponsible and a disaster. Additionally, a contingent of Republican senators is holding up final budget approval pending a vote on eminent domain protections related to carbon pipelines, which remains a key legislative hurdle. Governor Kim Reynolds praised the agreement for maintaining fiscal discipline and prioritizing taxpayers, while Republican negotiators highlighted the compromise reached after a week of intense negotiations.