Capitol Update

How Much New Money Does Iowa Have to Spend in FY 2016?

When the Revenue Estimating Conference (REC) met in March, most Iowans learned that the committee had lowered the revenue estimate for the next budget year. The REC also issued a revised estimate for the current budget year, and some people are using those numbers to try and fool Iowans into believing the state has more new revenue than it actually does.

On March 19, the Revenue Estimating Conference projected that the state’s General Fund will take in $6.7674 billion through June 30, 2015. This was lower than their December 2014 estimate of $6.8571 billion, due to changes made this session in a bill aimed at matching Iowa’s tax with the Federal tax code. The problem is that last session the legislature used a revenue estimate that was just above the approved FY 15 spending level of 6.994 billion. Now we have the new estimate from March 19 that says only $6.767 billion is available. This leaves the state in a position where spending exceeds revenue. The last thing the Legislature should do is spend even more.

The Senate majority are claiming that the state is experiencing 6 percent revenue growth. If someone were to follow their lead take the difference between the projected revenue for FY 2015 (6.7674 billion) and the projected revenue FY 2016 ($7.1755 billion), you would find an increase of $408.1 million or 6 percent.

4 2 15-1

But there’s a small problem with this calculations – the FY 2016 budget will be built from the actual spending levels on programs in FY 2015, not the REC’s revenue projection for that year. Below you will see a chart describing the actual growth in revenue.

4 2 15-2

The actual amount of additional revenue that will be in Iowa’s budget next year is $180.9 million. This number comes from subtracting the actual spending in FY 2015 ($6.9946 billion) from the FY 2016 revenue estimate.   That gives the state a 2.59 percent increase.

The House is committed to these principles to produce a balanced and sustainable state budget:

  1. We will spend less than the state collects;
  2. We will not use one-time money to fund on-going needs;
  3. We will not balance the budget by intentionally underfunding programs; and
  4. We will return unused tax dollars to Iowa’s taxpayers.

Our position on government spending is reasonable, sustainable and based on simple common sense – don’t spend more than you take in, don’t spend one-time money for on-going things and don’t knowingly underfund commitments simply to make the numbers work. Doing any of those things are short-term, unpredictable practices which lead to widespread budget problems.

If the Senate majority is intent on passing budget bills that spend $227 million more than what the state will actually has, it means they have other financially disastrous plans. They may have decided to spend the state’s ending balance and return the state to Chet Culver accounting by setting up across the board cuts in FY 2017, or they may have a plan to cut $227 million out of other programs like higher education, Medicaid, or public safety. Either way, Iowa taxpayers and Iowa schools will be the losers.

This week was the second funnel week of the session. All bills have to have passed out of one chamber and committee in the other to remain alive for the rest of session. We’ll find out which bills survived and which didn’t after the official deadline on Friday.

moore_hein youth coaltion 3 2015

Pictured above are Rep. Brian Moore and I with the Jones County Safe and Healthy Youth Coalition at the Capitol this week. The group visited the Statehouse to discuss youth issues with legislators.

If you have any questions, comments or concerns about these topics or any others please feel free to contact me by e-mail at or by phone at (515) 281-3221.


Rep. Lee Hein

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