Adjusting the budget
Tuesday, June 16, 2020
Earlier this week we released a budget plan for Fiscal Year 2021. We have to be careful about budgeting, now more than ever, because we have yet to see an end to the impacts of COVID-19.
While the COVID pandemic has impacted the budget, I am optimistic that Iowa is in better shape than many states. Iowa's budget has a healthy projected surplus, reserve accounts are fully filled, and we are investing in critical programs that move Iowa forward. This is largely due to the strong fiscal discipline that we have employed over the last decade. While some wanted to increase spending to unsustainable levels, we held the line to protect hard-working taxpayers.
Overall, the House budget plan maintains spending at FY20 levels with strategic increases in key priorities like education and health care. Our budget proposal spends less than the state collects in revenue, leaves a large ending balance as a cushion, and does not utilize emergency accounts or federal funding. These smart budget practices will protect Iowa's critical investments from cuts due to fluctuations in revenue or unforeseen circumstances.
At a time of much uncertainty, we have continued to bring a reasonable approach to budgeting, similar to the way Iowa families and small businesses spend their own hard-earned money.
Earlier this session, the legislature passed a K-12 education funding package with nearly $100 million in new money. When we passed this plan, it was with the intention that we follow through on our commitment. Under House Republican leadership, investment in K-12 education has never been cut.
This $100 million package provides significant additional funding for general aid, as well as targeted investment to reduce higher than average transportation costs in rural districts and reduce a long-standing inequity in the school funding formula by an additional $10/per student.
Schools and Iowans should know that when House Republicans make a commitment, we follow through. Whether it's a mid-year reduction in revenue or an unforeseen public health pandemic like COVID, we have budgeted in a way to maintain and fulfill our commitments.
As we continue through these uncertain times, we need to continue to be prudent with taxpayer dollars and keep Iowa strong.