Iowa Senate Bill SF262

Iowa 2025-2026 Regular Session

• Introduced: 2/11/25
• Refer: 2/11/25

Caption

A bill for an act requiring the establishment of the state percent of growth and categorical state percent of growth for two consecutive budget years during the first regular session of the general assembly, and including effective date provisions.

Summary

SF 262 would change Iowa’s school funding and related budget-setting process by requiring the General Assembly to set both the state percent of growth and the categorical state percent of growth for two consecutive budget years during the first regular legislative session. Under current law, lawmakers establish these growth rates for the upcoming budget year and, in some cases, later adjust them; this bill would require advance setting of the second-year rates as well. The bill also states that once the second-year rates are enacted, the legislature may increase them but may not decrease them. The bill includes specific growth rates for recent budget years in the statute text: 2.5% for FY 2022, 3% for FY 2023, and 2.5% for FY 2024, and it directs future rates to be enacted within 30 days of the governor’s budget submission. It also clarifies that categorical growth may cover several school funding supplements, including teacher salary, professional development, early intervention, teacher leadership, and transportation equity aid payments. The act would take effect immediately upon enactment.

Impact

SF 262 would amend Iowa Code section 257.8, which governs the state percent of growth and categorical state percent of growth used in school funding calculations. Its practical effect would be to lock in a two-year budgeting framework for these rates during the first regular session of each General Assembly and limit later legislative action by allowing increases but not decreases to the second-year rates. This would affect state budgeting, school finance planning, and the funding levels for school aid and categorical supplements tied to the growth percentage.

Sentiment

Based on the available record, the bill appears to have been treated as a procedural school-funding measure rather than a highly controversial proposal. There are no recorded votes or committee transcript excerpts showing debate, support, or opposition, and the only documented action is referral to a subcommittee. The bill’s structure suggests an intent to provide more predictability for school funding, which is generally a goal favored by education stakeholders and budget planners.

Contention

The main point of potential contention is the bill’s restriction on reducing the second-year growth rate after it is enacted. That limits future legislative flexibility and could be viewed as constraining budget negotiations if revenue conditions change. Another possible issue is the requirement to set two years of growth rates early in the session, which may be seen as improving certainty for schools but reducing the legislature’s ability to respond to updated fiscal forecasts later in the year. No specific opponents or supporters are identified in the available materials.