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 In the aftermath of the Coronavirus pandemic, a number of state legislatures are facing revenue declines of up to 33 percent thus forcing them to enact budgets with significant spending reductions when compared to the previous fiscal year. 
In Iowa, it is a different story as conservative budgeting principles have left the state in a much stronger fiscal position than many other states.  On Wednesday, House Republicans moved forward with a Fiscal Year 2021 budget that maintains the current year’s funding level for virtually all budget line items while also ensuring that the promises made to local schools before the pandemic are being kept.
House File 2643 is the bill containing all General Fund appropriations, and It spends $7.796 billion in the fiscal year starting on July 1.  The bill maintains the Fiscal Year 2020 funding levels for the vast majority of line items in state government.  Additionally, the state would provide additional funding to the HAWK-I program to meet the changed federal matching fund levels due to Obamacare.  Funding for Medicaid would be set at $1.466 billion for the year.  That amount is slightly above the current projected in the program by the state’s Medicaid Forecasting Group.
Education remains a priority under the House Republican budget proposal.  The budget ensures that the state has the funds necessary to provide schools with the 2.3 percent increase in supplementary state aid that the Legislature promised when it passed that amount in early March.  House File 2643 continues that commitment by providing the Iowa School for the Deaf and the Braille and Sight Saving School a similar increase in their funding levels.
Passage of the House Republican budget plan would also leave the state on solid financial ground in Fiscal Year 2021.  Both the Cash Reserve Fund and the Economic Emergency Fund would continue to be filled to the statutorily-required level of 10 percent of the General Fund budget, in addition to the state continuing to have a healthy ending balance in the General Fund.

John Wills

Author: John Wills