ON THE ISSUES 2014: State budget

A look at what the Iowa Legislature will face this session

Published: January 1 2014 | 10:00 am - Updated: 29 March 2014 | 1:32 am in
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  • Reaching agreement on a balanced-budget plan.
  • Deciding if there is room for more one-time spending or tax cuts.
  • Addressing shortfall and federal shifts in Medicaid funding.
  • Funding tax and education reform commitments, tuition freezes and workforce skills.


  • Under new biennial budgeting guidelines, the split-control Legislature last session put in place about 86 percent of the state’s fiscal 2015 general fund budget with departments initially authorized for about 50 percent of their operating funds.
  • The state Revenue Estimating Conference projected the state will collect slightly less than $7 billion in taxes in the upcoming fiscal year, but lawmakers are barred from spending more than 99 percent of the available revenue under the state’s spending limitation law.
  • The current budget year in progress has an estimated surplus of $854.1 million and the state’s two reserve funds are at a record level of $649.6 million. Also, the state’s Taxpayer Trust Fund contains a balance of $120 million that will be used to provide income tax credits to eligible individuals for the 2013 tax year.


  • Branstad will present his fiscal 2015 budget plan with his Condition of State address Jan. 14.
  • Leaders in the GOP-led House and the Senate controlled by Democrats hope to reach agreement on a total general fund spending target for fiscal 2015 early in the process with an eye on trimming at least one week off the projected 100-day, election-year session.
  • Up to $7.6 billion in revenue is available under the expenditure limitation but last session net appropriations totaled just more than $6.5 billion and new multiyear commitments were put in place that will spend down surplus dollars.


The split-control Legislature already has approved a 4 percent boost in state aid to K-12 schools for the next school year. State law requires the governor and Legislature to set following year funding for K-12 schools within a 30-day window after the governor proposes his budget. Branstad and GOP legislators have balked at forward funding in recent years, but Senate Majority Leader Mike Gronstal, D-Council Bluffs, said legislative Democrats plan to follow the law and pass a state aid increase for fiscal 2016 and hope Republicans will do likewise.

House Speaker Kraig Paulsen, R-Hiawatha, cautioned that built-in commitments and anticipated increases already will boost next year’s spending by $400 million to $500 million.

The first installments of multiyear commitments for property tax and education reforms will begin in fiscal 2015 as lawmakers begin to draw down surplus dollars.

Projections call for property tax reimbursements of $128.7 million in fiscal 2015, growing to $278.7 million by fiscal 2017 and beyond, while education reforms will cost $60 million next year and grow to $147.9 million by fiscal 2018 and beyond, according to estimates.

LSA projections also estimate a $28 million shortfall in Medicaid funding for the current fiscal year and a $148 million underfunding issue in fiscal 2015 that will need to be addressed.

Curated by Rod Boshart, Michael Chevy Castranova, Jim Riley/The Gazette

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