State Budgets

Condition of the State: Iowa

Iowa Governor Terry Branstad, the longest-serving governor in American history, delivered the Condition of the State address three days into Iowa’s 2017 legislative session. Branstad was recently chosen by President-elect Donald Trump to be the next U.S. Ambassador to China, and Lieutenant Governor Kim Reynolds will become the official governor of the state once he vacates the office.

Branstad focused his speech on the creation of a “smaller and smarter government” during his tenure as governor. He applauded the state’s low unemployment rate (under 4 percent), the large amount of private investment throughout Iowa and the continued focus on balancing the state’s budget. According to the speech, collective bargaining reform will be a key priority for the 2017 session. Branstad blamed the “antiquated collective bargaining system” for a continuous increase in benefits for public employees at the state and local level. He also credited the 2016 “Medicaid modernization” efforts, privatizing Iowa Medicaid and saving taxpayers $110 million, thus allowing for an increase in education funding. Branstad noted he will seek justification for each taxpayer dollar spent rather than utilize incremental budgeting:

We have made a commitment to examine every dollar of revenue and expenditure in order to maximize efficiency and respect hardworking taxpayers. We are committed to a smaller, smarter government that seeks innovative ways to provide services rather than blind adherence to the way things have always been done.

The ALEC State Budget Reform Toolkit is a great resource for legislators or stakeholders looking to implement these types of meaningful priority-based budgeting techniques.

Governor Branstad has much to be proud of during his service to the Hawkeye State. With plenty of fresh faces in the Iowa General Assembly, a new governor taking over and the ‘trifecta’ status of the state as of November 2016 with conservatives taking control of the Senate, there could be movement soon on long neglected issues, such as tax reform. According to data from Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index, Iowa has one of the highest top marginal rates for both corporate and personal income, is one of six states with an inheritance tax and ranks 29th in economic outlook. Also, the Tax Foundation recently ranked Iowa’s business tax climate a disappointing 40th out of 50. There is clearly still work to be done in order to make the state more economically competitive.

Iowans expect more than just average results in terms of economic competitiveness and outlook.


In Depth: State Budgets

Smart budgeting is vital to a state’s financial health. The ALEC State Budget Reform Toolkit offers more than 20 policy ideas for addressing today’s shortfalls in a forthright manner, without resorting to budget gimmicks or damaging tax increases. One way to stabilize budgets over time is to embrace …

+ State Budgets In Depth