Reserve funds

Iowa sets money aside in two “rainy day” funds, filled to limits set in law: the Cash Reserve Fund (up to 7.5% of the year’s adjusted revenue estimate) and the Economic Emergency Fund (up to 2.5%). Money beyond those limits flows back to the General Fund. Since 2018 the Taxpayer Relief Fund has collected surplus revenue the Legislature can use only to cut taxes; recent budgets have drawn on it to pay for income tax cuts. How the budget works