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Iowa Budget in Trouble

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Iowa's economy is growing, but its not growing enough to pay for the growth in government spending.  New revenue estimates were released today, and they show Iowa's budget deficit for the current year is as much as $90 million.  That means legislators may have to find another $90 million in cuts from this current year's budget - with only six months left in the fiscal year.  That's on top of the nearly $200 million in cuts that have already been made, and with the transfer of $131 million from the state's rainy day fund.  

Here's a quick look at all the cuts made so far:

January 2017

  • $118 million in early session cuts to fiscal year 2017 (FY17) budget.

May 2017

  • Transfer of $131 million in "rainy day" funds to fill growing budget hole in FY17 budget.
  • Fiscal year 2018 (FY18) budget signed into law; spends $1 million less than adjusted FY17 budget.

June 2017 

  • Fiscal year 2017 ends with budget shortfall estimated to be as much as $100 million.  This gap is later closed to $13 million after state sales tax collections trickled in, and final books are closed out.  Since the Governor can transfer up to $50 million from the Rainy Day Fund to cover a budget shortfall, a special legislative session is avoided.

September 2017 

  • Transfer of $13 million from "rainy day fund" to balance the fiscal year 2017 budget.

October 2017

  • Budget experts say state is spending about $130 million more than it will collect in fiscal year 2018, and anticipate needing at least $30 million in cuts if revenues do not pick up.  

December

  • Budget experts meet and determine the state will need to cut between $35-90 million out of the current fiscal year (FY18) in order to balance the budget.   

These new revenue estimates are important, because the Governor will need to base her fiscal year 2019 (FY19) budget on these new figures.  So she will have less to spend, and will need to find a way to trim another $90 million off a budget that has already seen reductions of more a quarter of a billion dollars.