Iowa state budget and finances

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Iowa budget and finances
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General information
Budget calendar:
Annual
Fiscal year:
2015
State credit rating:
AAA (as of 2014)
Current governor:
Terry Branstad
Financial figures
Total spending (state and federal funds):
$20.1 billion (estimated for 2014)
Per capita spending:
$6,462.24 (estimated for 2014)
Total state tax collections:
$8.4 billion (2013)
Per capita tax collections:
$2,708.10 (2013)
State debt:
$37.8 billion (as of 2014)
Per capita state debt:
$12,290 (as of 2014)
State budgets and finances
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Total state expendituresState debtTax policy in Iowa
Note: This page utilizes information from a variety of sources. As such, the currency of the information varies somewhat. The information presented on this page reflects the most recent data available as of February 2015.
Between fiscal years 2013 and 2014, total government spending in Iowa increased by approximately $655 million, from $19.4 in fiscal year 2013 to an estimated $20.1 billion in 2014. This represents a 3.4 percent increase. The cumulative rate of inflation during the same period was 1.58 percent, calculated using the Consumer Price Indices for January 2013 and January 2014. As of 2014, financial services firm Standard and Poor's had assigned Iowa a AAA credit rating, the highest rating available.[1][2][3]
Total state tax collections in Iowa in 2013 amounted to $8.4 billion. Per capita tax collections totaled $2,708.10.

Spending

Definitions

The information below comes from the National Association of State Budget Officers (NASBO). These spending figures are broken into three broad categories in order to facilitate comparison between the states.[3]

  • State funds: State funds include general and other state-based funds. A general fund is "the predominant fund for financing a state's operations." Other state funds are "restricted by law for particular governmental functions or activities."
  • Federal funds: Federal funds are "funds received directly from the federal government."
  • Total spending: Total spending is calculated by adding together the totals for state and federal funds.

These figures exclude spending from the sale of bonds.

2014 expenditures

See also: Total state expenditures

The table below breaks down estimated spending totals for fiscal year 2014 (comparable figures from surrounding states are included to provide additional context). Figures for all columns except "Population” and “Per capita spending" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the columns labeled "Population” and “Per capita spending" have not been abbreviated.[3]

Total estimated spending in Iowa in 2014 was $20.1 billion. Estimated per capita spending in Iowa totaled $6,462 in 2014.

Total estimated state spending, FY 2014 ($ in millions)
State State funds Federal funds Total spending Population Per capita spending
Iowa $13,957 $6,122 $20,079 3,107,126 $6,462.24
Kansas $11,158 $3,511 $14,669 2,904,021 $5,051.27
Minnesota $25,861 $9,492 $35,353 5,457,173 $6,478.26
Missouri $15,970 $7,208 $23,178 6,063,589 $3,822.49
South Dakota $2,669 $1,420 $4,089 853,175 $4,792.69
Per capita figures are calculated by taking the state's total spending and dividing by the number of state residents according to United States Census estimates.[4]
Source: National Association of State Budget Officers

Spending by function

See also: State spending by function as a percent of total expenditures
Breakdown of spending by function in FY 2013
Source: National Association of State Budget Officers

State spending in Iowa can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2013 information is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percents, indicating the share of the total budget spent per category.[3]

In Iowa, higher education accounted for 26 percent of total spending, a greater share than in any neighboring state.

State spending by function as a percent of total expenditures, FY 2013
State K-12 education Higher education Public assistance Medicaid Corrections Trans-
portation
Other
Iowa 16.4% 26% 0.5% 19.8% 2.1% 6.8% 28.3%
Kansas 26.8% 18.2% 0.2% 18.5% 2.7% 7.2% 26.4%
Minnesota 29.2% 4.7% 1.4% 24.3% 1.5% 10.7% 28.2%
Missouri 22.8% 4.8% 0.7% 35.8% 2.7% 9.4% 23.8%
South Dakota 14.1% 22.3% 0.7% 19.9% 2.5% 15% 25.5%
Source: National Association of State Budget Officers
Note: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[3]

Spending trends

Between 2009 and 2013, the share of the Iowa state budget spent on Medicaid increased from 17.9 percent to 19.8 percent. See the table below for further details (figures are rendered as percents, indicating the share of the total budget spent per category).[3][5][6][7][8]

Spending by function from 2009 to 2013 (as percents)
Year K-12 education Higher education Public assistance Medicaid Corrections Transportation Other
2013 16.4% 26% 0.5% 19.8% 2.1% 6.8% 28.3%
2012 16.8% 25.0% 0.6% 19.6% 2.7% 7.5% 27.8%
2011 17.7% 24.6% 0.7% 19.4% 2.2% 7.8% 27.6%
2010 17.3% 24.4% 0.7% 18.6% 2.4% 9.1% 27.5%
2009 17.6% 25.6% 0.7% 17.9% 2.4% 7.8% 28.0%
Source: National Association of State Budget Officers
Note: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[3]

Revenues

2013 revenues

See also: State government tax collections by source

The table below breaks down state government tax collections by source in 2013 (comparable figures from surrounding states are also provided to give additional context). Figures for all columns except "population" and "per capita revenue" are rendered in thousands of dollars (for example, $2,448 translates to $2,448,000). Figures in the columns labeled "population" and "per capita revenue" have not been abbreviated).[9]

Total tax collections in Iowa in 2013 amounted to $8.4 billion. Per capita tax collections in 2013 totaled $2,708.

State tax collections by source ($ in thousands)
State Property taxes Sales and gross receipts Licenses Individual income taxes Corporation net income taxes Other taxes Total 2013 population Per capita collections
Iowa N/A $3,608,991 $798,137 $3,436,758 $428,554 $101,936 $8,374,376 3,092,341 $2,708.10
Kansas $79,475 $3,742,916 $382,944 $2,956,588 $384,553 $73,806 $7,620,282 2,895,801 $2,631.49
Minnesota $821,799 $8,289,780 $1,184,465 $8,950,755 $1,363,128 $421,882 $21,031,809 5,422,060 $3,878.93
Missouri $29,896 $4,791,043 $550,824 $5,380,651 $377,258 $11,073 $11,140,745 6,044,917 $1,842.99
South Dakota N/A $1,228,262 $257,220 N/A $37,172 $11,009 $1,533,663 845,510 $1,813.89
Source: Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014
Iowa tax collections by source in 2013
Source: Tax Policy Center

The table below lists 2013 tax collections by source as percentages of total collections. Sales taxes and gross receipts accounted for 43 percent of total state tax collections in Iowa in 2013.[9]

State tax collections by source (as percentages)
State Property taxes Sales and gross receipts Licenses Individual income taxes Corporation net income taxes Other taxes
Iowa N/A 43.10% 9.53% 41.04% 5.12% 1.22%
Kansas 1.04% 49.12% 5.03% 38.80% 5.05% 0.97%
Minnesota 3.91% 39.42% 5.63% 42.56% 6.48% 2.01%
Missouri 0.27% 43.00% 4.94% 48.30% 3.39% 0.10%
South Dakota N/A 80.09% 16.77% N/A 2.42% 0.72%
Source: Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014

Current fiscal year budget

See also: Historic Iowa budget and finance information

Fiscal year 2015

DocumentIcon.jpg See budget bill: Signed budget bills for fiscal year 2015

Governor Terry Branstad announced his fiscal year 2015 budget proposal on January 14, 2014. Under the governor's proposal, total general fund spending for fiscal year 2015 would have equaled approximately $7 billion, a 7.9 percent increase over fiscal year 2014. The budget included an additional $170 million in K-12 education aid over fiscal year 2014, as well as $120 million for property tax replacement.[10]

On May 29, 2013, Branstad signed into law the bills comprising the fiscal year 2015 budget. The enacted general fund budget for 2015 totaled approximately $6.9 billion.[10]

State debt

See also: State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, Iowa had a state debt of approximately $37.8 billion. Its state debt per capita was $12,290. The report revealed that state governments faced a combined $5.1 trillion in debt. The obligation amounted to $16,178 per capita in the nation.[11]

Total state debt, 2014
State Total state debt State debt per capita Per capita debt ranking
Iowa $37,783,060,000 $12,290 38
Kansas $39,025,693,000 $13,523 28
Minnesota $85,879,526,000 $15,965 21
Missouri $76,489,010,000 $12,702 34
South Dakota $7,707,458,000 $9,249 46
Sources: State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014

Public pensions

See also: Iowa public pensions and Iowa public employee salaries

A 2012 report from the Pew Center on the States noted that Iowa's pension system was funded at 81 percent at the close of fiscal year 2010, just above the 80 precent funding level experts recommend. Consequently, Pew designated the state's pension system as being in need of "improvement."[12]

The funding ratio for the state's pension systems decreased from 89.57 percent in fiscal year 2007 to 79.10 percent in fiscal year 2012, a drop of 10.47 percentage points, or 11.7 percent. Likewise, unfunded liabilities increased from approximately $3.7 billion in fiscal year 2007 to more than $6.8 billion in fiscal year 2012.

Credit ratings

See also: State credit ratings

Credit rating agencies, such as Standard and Poor's, assign grades to states that take into account a state's ability to pay debts and the general health of the state's economy. Generally speaking, a higher credit rating indicates lower interest costs on the general obligation bonds states sometimes sell to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). This in turn results in lower interest costs, thereby lowering the cost to taxpayers.[13][14]

The table below lists the Standard and Poor's credit ratings for Iowa and surrounding states from 2004 to 2014. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest.[15]

State credit ratings, 2004 to 2014
State 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004
Iowa AAA AAA AAA AAA AAA AAA AAA AA+ AA+ AA+ AA+
Kansas AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+
Minnesota AA+ AA+ AA+ AAA AAA AAA AAA AAA AAA AAA AAA
Missouri AAA AAA AAA AAA AAA AAA AAA AAA AAA AAA AAA
South Dakota AA+ AA+ AA+ AA+ AA AA AA AA AA
Source: Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2014," June 9, 2014

Federal aid to state budget

See also: Federal aid to state budgets

State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies considerably from state to state. For example, Mississippi received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, Alaska received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.[16]

The table below notes what share of Iowa's general revenues came from the federal government in 2012. That year, Iowa received approximately $6.1 billion in federal aid, 33.1 percent of the state's total general revenues. Figures from surrounding states are provided for additional context.[16]

Federal aid to state budgets, 2012
State Total federal aid ($ in thousands) Federal aid as a % of general revenue Ranking
Iowa $6,073,376 33.08% 26
Kansas $4,061,217 26.95% 41
Minnesota $9,608,018 28.13% 39
Missouri $10,440,927 39.42% 5
South Dakota $1,630,220 40.84% 4
Source: United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014

Stimulus

According to Recovery.gov, the official government website for the Recovery Accountability and Transparency Board, under the American Recovery and Reinvestment Act, Iowa received $2 billion in federal stimulus funding between February 2009 and June 2013.[17]

Budget process

The state operates on an annual budget cycle. The sequence of key events in the budget process is as follows:[18][19]

  1. Budget instruction guidelines are sent to state agencies in June or July.
  2. Agency requests are submitted to the governor by October 1.
  3. Agency hearings are held in November and December.
  4. Public hearings are held in December.
  5. The governor submits his or her proposed budget to the Iowa State Legislature by February 1.
  6. The legislature adopts a budget in April or May.
  7. The fiscal year begins in July.

Iowa is one of 44 states in which the governor has line item veto authority.[19]

The governor is constitutionally and statutorily required to submit a balanced budget. In turn, the legislature is statutorily required to adopt a balanced budget.[19]

Agencies, offices and committees

The following standing committees in the Iowa State Legislature deal with budget and finance matters:[20]

  1. Appropriations Committee, Iowa House of Representatives
  2. Ways and Means Committee, Iowa House of Representatives
  3. Appropriations Committee, Iowa State Senate
  4. Ways and Means Committee, Iowa State Senate

The Iowa Auditor of State makes complete annual audits of the books, records and accounts of every department of state government. The auditor's mission statement is as follows:[21]

The mission of the Office of Auditor of State is to benefit all citizens of Iowa by providing audit, review, and other technical services to state and local governments to ensure the effective, economical businesslike conduct of public activities in a prudent, accountable manner to achieve the intended purposes[22]

—Iowa Auditor of State

Studies and reports

U.S. PIRG "Following the Money" report

See also: "Following the Money" report, 2014

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured how transparent and accountable state websites are with regard to state government spending.[23] According to the report, Iowa received a grade of A- and a numerical score of 90, indicating that Iowa was "leading" in terms of transparency regarding state spending.[23]

Budget and finance ballot measures

See also: Spending and finance on the ballot and List of Iowa ballot measures

Ballotpedia has tracked 2 ballot measures relating to state and local budget and financial matters in Iowa.

  1. Iowa Balanced State Budget and Rainy Day Fund, Amendment 1 (1999)
  2. Iowa Supermajority to Raise Taxes, Amendment 2 (1999)

Recent news

This section displays the most recent stories in a Google news search for the term "Iowa + budget"

All stories may not be relevant to this page due to the nature of the search engine.

Iowa state budget news feed

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Contact information

Iowa Department of Management
State Capitol
Des Moines, IA 50319
Telephone: 515-281-3322
Fax: 515-242-5897

See also

External links

Additional reading

References

  1. Bureau of Labor Statistics, "CPI Detailed Report Data for February 2014," accessed April 9, 2014
  2. InflationData.com, "Cumulative Inflation Calculator," February 28, 2014
  3. 3.0 3.1 3.2 3.3 3.4 3.5 3.6 National Association of State Budget Officers, "State Expenditure Report: 2012-2014," accessed February 18, 2015
  4. United States Census Bureau, "State and County QuickFacts," accessed February 23, 2014
  5. National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
  6. National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
  7. National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
  8. National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
  9. 9.0 9.1 Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014
  10. 10.0 10.1 National Association of State Budget Officers, "Summaries of Fiscal Year 2015 Proposed and Enacted Budgets," July 11, 2014
  11. State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  12. Pew Center on the States, "Widening Gap Update: Iowa," June 18, 2012
  13. Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
  14. Bankrate, "The 6 states with the worst credit ratings," September 27, 2012
  15. Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2014," June 9, 2014
  16. 16.0 16.1 United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
  17. Recovery.gov, "Stimulus Spending by State," accessed March 16, 2015
  18. National Conference of State Legislatures "State Experiences with Annual and Biennial Budgeting," updated April 2011
  19. 19.0 19.1 19.2 National Association of State Budget Officers "Budget Processes in the States, Summer 2008," accessed February 21, 2014
  20. The Iowa Legislature, "Committees," accessed March 19, 2015
  21. State of Iowa - Auditor of State, "About the Office," accessed March 11, 2015
  22. Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.
  23. 23.0 23.1 U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014