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TOUGHER BUDGET YEAR THAN EXPECTED

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Iowa legislators are required by law to balance the state's budget each year, and only spend 99% of the state’s money.  The remaining 1% goes into an “economic emergency fund” to help the state get through tough years.  This year, we need the economic emergency fund! 

The most recent budget estimates came out this week, and they show the state needs to cut another $105.9 million from current year budget - that is, from April-May-June spending.  This is on top of the $88.2 million that was already cut in the Deappropriation Bill (SF 130) passed earlier in session.  That bill also held back $25.2 million in tax credits that would have gone to businesses; if that had not been done, the cuts needed to balance this year’s budget would be $131 million (instead of $105 million).

Legislators have decided that there is no way to cut further in the final months of the budget year, so they will dip into the economic emergency fund and borrow $105.9 million to cover the shortfall.  The key word is “borrow;” legislators say they want to pay the emergency fund back with next year’s budget money.  Here’s a quick rundown of what the budget looks like for next year (the budget year that runs from July 1, 2017 to June 30, 2018):

  • $258.5 million total new money to spend.
    • $105.9 million will pay back to the Economic Emergency Fund.
    • $40 million already spent on 1.1% school funding increase.
    • $42 million is needed to fund Medicaid.
  • That leaves $70.6 million left for the rest of the budget (including salary increases, increased costs of operations).

These numbers come from the non-partisan Legislative Services Bureau - you can see their review here.  Legislators may use a different set of numbers, as some will want to be more conservative in budgeting so they don't have to come back in an election year (2018) and do another round of cuts.  Whatever numbers are used, there is simply no money for any new programs.   We expect budget decisions to move quite quickly now, as legislators rush toward the second funnel deadline on March 31 and their final session day on (or around) April 19.

So the bottom line - no money to spend on new programs or priorities, more cuts are likely, no state money to pay for regional MH/DS services, and Medicaid may get short-changed.  Decisions will be made very soon.  So if you have priorities in this budget, better let your legislators know now!

  • Click here to email your legislators.
  • Call your State Senator at (515) 281-3371.
  • Call your State Representative at (515) 281-3221.