Iowa lawmakers sent legislation to Gov. Kim Reynolds’ desk Thursday that will prevent a $133 million residential property tax increase from going into effect.

The lost tax revenue from the bill, Senate File 181, will result in the reduction of services in many Iowa cities — as much as $39 million in tax revenue across the state, according to the Legislative Services Agency.

A 2021 law passed by the Republican-controlled legislature combined multi-residential and residential property tax classifications that increased the property tax rollback rate for 2022.

Lawmakers in the Iowa House passed a bill that would remove multi-residential properties from the calculations used to calculate the rollback rate on residential property taxes.

The rollback rate is calculated by the Iowa Department of Revenue and reduces the total assessed taxable value of residential property by a designated rate every tax year.

Rep. Dave Jacoby, D-Coralville, introduced an amendment to fund the difference in tax revenue with Iowa Taxpayer Relief fund dollars. The amendment failed on party lines with Republicans voting against the measure.

However, the full bill passed with a large amount of bi-partisan support, 86-13, with some Democrats voting against the bill, including Jacoby.

Rural Emergency Hospital Designations pass in the Senate

The Iowa Senate passed a bill that would create a rural emergency hospital designation in the state under the Department of Inspections and Appeals.

The legislation would create a license for an outpatient medical center that provides emergency care in rural areas. However, to obtain the designation, the hospital must have previously been a critical access hospital.

The designation was created under the Rural Emergency Health Act sponsored by Sen. Chuck Grassley in 2001.

It would increase Medicare reimbursement rates for hospitals with those designations. However, it would not increase Medicaid reimbursement rates.

Sen. Janet Petersen, D-Des Moines, said during floor debate on a proposed amendment to address Medicaid reimbursement rates set by the state.

An amendment to increase Medicaid reimbursement rates for hospitals and ambulance services failed in the Senate on party lines with 32 Republicans voting against the amendments and 16 Democrats voting in favor.

The bill will now go to the House where it has been referred to the Ways and Means Committee.

Reynolds signs Medical Malpractice Caps into law

Reynolds signed a cap on non-economic damages in medical malpractice cases on Thursday.

The law would cap the amount of “pain and suffering” or non-economic damages to $2 million if suing a hospital and $1 million if suing a provider, nursing home, or small surgery center.

The bill passed a vote in both chambers with a few Republicans and all Democrats opposing the bill.

Advocates of the legislation argued the bill would lower the cost of medical malpractice insurance in the state, which they claim is rising and becoming unaffordable.

However, Iowa’s average cost for medical malpractice insurance was around $22,000 in 2022 and has stayed stable for the past decade, according to data from the Medical Liability Monitor. Iowa also has some of the lowest medical malpractice insurance costs in the country, placing fifth in the nation.

“Protecting our health care system from out-of-control verdicts promotes access to care in communities across our state and better positions us to recruit the best and brightest physicians to Iowa,” Reynolds said in a news release on Thursday.