I’m proud to say that I’m a member of the newly-formed Federal and Other Funds Budget Subcommittee and we met for the first time this week. In Fiscal Year 2024, the state received $11.8 billion in federal funding, going to a variety of programs and agencies. The scope of these allocations and how they are used by state government will be a significant task for our committee.
Not only is the Subcommittee to identify how Iowa federal funds are used, but we are also charged with looking for ways to improve their utilization. With a new administration in Washington that has expressed an interest in looking for better ways to work with state governments, it makes sense for the Legislature to explore ways federal funds can be used to better serve Iowans.
Examining federal funds is not the only task the committee is undertaking. The state has several programs that are not part of the annual General Fund budget but have significant funds in their accounts. These programs run the gamut of state government and had nearly $1 billion at the end of FY 24. The Subcommittee will start these reviews with the programs that are funded by the Skilled Worker and Job Creation Fund. Created in 2013, this diverts $65 million a year of casino gaming tax revenue to various job skills and adult education programs.
One part of federal funding that the Legislature does address every two years are those block grants that requires legislative approval. There are 19 of these block grants, mostly going to the Department of Health & Human Services. The Subcommittee is going to conduct a review of these programs to make sure the state is getting the maximum value out of the block grants. Once that review is done, the Subcommittee will produce the biennial Block Grant appropriations bill.
Our new Subcommittee has drawn a lot of interest from across the state, with citizens and state agencies offering suggestions for where members of the panel should be looking. This work will likely run into the interim after the 2025 session, with so many different programs and funding streams to be reviewed. But shining sunlight on these programs and letting Iowans know where these funds are spent is the type of oversight Iowans expect from their Legislature.
Historically, any money allocated to the state of Iowa from the federal government comes with many strings attached. Federal programs too often treat states like Iowa exactly the same as California, even though our needs are very different. The reality is that states are much better equipped to react to situations and know what is best for their citizens, but too often the federal government stands in our way.
With President Trump back in the White House, we are hopeful that this will mean more flexibility with the federal dollars sent to Iowa. He has expressed a willingness to work with states to make these programs better tailored to each state’s needs.
