According to a national group, Iowa is the most fiscally sound, most resilient state in the nation when it comes to surviving the COVID-19 pandemic.
The Council of State Governments put together a report detailing how each state handled the COVID-19 pandemic. The Hawkeye State secured a high score.
“CSG’s newest report validates the conservative budgeting practices Senate Republicans have implemented for the last four years,” said Senate Majority Leader Jack Whitver. “Contrasted with the record of generational debt and massive cuts to K-12 education under Democrat control, Iowans can be confident in stable and predictable funding under Republican leadership.”
The report took many aspects into account.
“Months later we can measure the degree of devastation on public health, economy and state finances felt by individual states in a variety of ways,” the report says. “Disease, infection rates, measures taken to control the spread of the disease, overall fiscal viability, unemployment and the industrial sectors driving the state economies all help determine the fiscal impact to individual states.”
According to the report, unanticipated events are considered during the development of state budgets, but nothing could have prepared states for COVID.
“State leaders were faced with the difficult decision to shut down key economic sectors to slow the spread of COVID-19 infections,” the report says. “As a result, sharp declines in sales tax revenue from closed stores and reduced consumption combined with falling income tax revenue devastated most states’ primary revenue streams.”
The latest state-by-state estimates show states face an estimated $169-253 billion shortfall in declining general fund revenue receipts and increased Medicaid expenditures for the combined fiscal years ending in 2020 and 2021.
In April 2020, all 50 states were simultaneously operating under disaster declarations for the first time in U.S. history.
Iowa was one of three states to earn a risk score of 0. Utah and Arkansas were the other two states.
Revenue loss projections, state Medicaid spending increases, sustainability of unemployment benefits, economic sector-based risk and pension reliance on financial market returns were the five factors in determining fiscal risk.
Iowa is expected to have less than 5 percent decline in revenue projections.
The Council of State Governments serves all three branches of government, providing nonpartisan regional-based forums to “foster the exchange of insights and best practices to assist government officials collaborate and facilitate solutions.”