In her Condition of the State Address on January 10, 2023, Iowa Governor Kim Reynolds (R) highlighted several reforms designed to bring efficiency to state government and reduce the regulatory burden faced by taxpayers.  She cited HSB 126, which would reorganize the state government, and noted her issuance of an executive order earlier in the day that freezes new regulations and requires a review of all regulations in the Iowa Administrative code. 

The reorganization would reduce the number of executive branch agencies by 57 percent, from 37 to 16.  As she noted in her address, the current system creates “unnecessary friction for Iowans,” with “services spread unpredictably across state government.”  For example, there are 11 agencies that have workforce programs and 11 agencies that have professional licensing requirements. 

The inefficiencies caused by the large number of agencies with duplicative programs and responsibilities would be alleviated by combining and consolidating those with similar missions.  For example, the Departments of Aging, Human Rights, and Early Childhood Iowa would be consolidated into the Department of Health and Human Services.  Similarly, the Department of Inspections and Appeals, which would be renamed the Department of Inspections, Appeals, and Licensing, would take over some of the licensing responsibilities that now run across 11 state agencies.

The proposed government-wide reorganization proposal comes on the heels of a 2022 merger of the state’s Human Services and Public Health Departments into the new Health and Human Services Department.  Combining the two departments, Gov. Reynolds noted, led to improved collaboration in which the two agencies took “advantage of scale and integration.”

HSB 126 would not only increase efficiency but also save taxpayers an estimated $215 million over four years.  

Gov. Reynolds’ plan to reduce regulations was provided in her January 10, 2023, Executive Order 10, which established a moratorium on the promulgation of new administrative rules and called for agencies to review all existing administrative rules for elimination or simplification.  According to Gov. Reynolds, the Iowa Administrative Code “contains over 20,000 pages and 190,000 restrictive terms.”  These “obsolete, ineffective, excessively burdensome, or redundant administrative rules” stifle innovation and increase costs for businesses in the state.

Gov. Reynolds’ support of HSB 126, paired with Executive Order 10, provide a path forward to increase efficiency and reduce wasteful spending in Iowa.  The Iowa General Assembly should act without hesitation to adopt HSB 126, which will benefit taxpayers and businesses through the Hawkeye State and make it more competitive with other state across the country.