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Iowa state budget (2012-2013)

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Because Iowa took a two-year approach to the state budget in FY 2012, legislators had already allocated 86 percent of the funds for FY2013.[1] On June 7, 2012, Governor Terry Branstad finalized the $6.244 billion FY 2013 budget.[2]

State Auditor David Vaudt said in July 2012 that the state faced a $161 million “spending gap” compared to available state revenues.[3]

The drafted budget relied on $71 million in one-time sources.[3]

Legislative Proposed Budgets

The Iowa House of Representatives and Iowa State Senate proposed budgets that differed dramatically on several issues.

  • Education: The Senate proposed spending $890.6 million, an increase of $79.4 million over FY 2012, and the House proposed spending $774.3 million, a $37 million cut. The differences are in Regents and community college spending.
  • Infrastructure: While both budgets increased infrastructure funding, the House proposed spending $80.7 million, whereas the Senate proposed $56.5 million.
  • Corrections: The House budget cut $1.6 million from corrections compared with FY 2012; the Senate's budget increased corrections funding by $15.4 million.
  • Economic Development: Both houses increased funding for economic development and labor programs, but the Senate wanted to do so by $61.2 million and the House wanted to do so by $28.9 million.[4]

Governor's Proposed Budget

Gov. Branstad proposed a $6.2 billion budget for FY 2013, which included those prior allocations and increased spending by 3.8 percent, or $230 million, over FY 2012. The increase was based on projections that called for state tax collections to grow 4.2 percent in FY 2013. Half of state revenues would come from income taxes, and the sales tax would generate about 34 percent of revenue.[5] The governor's proposed budget can be found here.

The Governor's proposed budget break down:[5]

Category  % of Spending
Education 58
Health and Human Services 26
Judicial and Corrections Systems 10

K-12 Education

Gov. Branstad and top education officials said they planned to increase the amount spent on school funding, which in FY 2012 accounted for 58 percent of the state budget. Branstad's education reform plan would have raised the pay of first-year teachers, required third-graders to pass a literacy test and reward innovative schools with extra money.[6] The governor said he did not have a specific number in mind, but he planned to have a target prior to lawmakers returning in January 2012.[7] Some in the state questioned whether the plan would be fiscally possible.[6]

Higher Education

The governor's proposed budget included $23 million increase to the budget for the state’s three public universities. House Republicans, however, called for a $31 million decrease from FY 2012.[8]


The governor proposed reducing commercial and industrial property taxes by 40 percent over eight years, saying the levies were the second-highest in the U.S. and were costing the state jobs.[9]