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Chapter 5

The budget

Every year the Legislature decides how the state spends its money. Here’s how that works, and the rules that limit it.

The budget year

Iowa’s fiscal year runs from July 1 to June 30 and is named for the year it ends: fiscal year 2027 (FY27) is July 2026 through June 2027. Each spring’s session writes the budget for the fiscal year that starts that July.

  1. December. The Revenue Estimating Conference, a three-member panel, estimates how much money the state will take in. Its estimate caps what can be spent.
  2. January. The Governor proposes a budget in the Condition of the State speech, and must send it to the Legislature by February 1.
  3. February to April. Joint House-Senate appropriations subcommittees each work through one area of the budget, hearing from the departments they fund. The conference meets again in the spring.
  4. The end of session. The budget bills, usually one per area, pass both chambers, often in the session’s last days.
  5. The Governor’s desk. On spending bills, the Governor can veto individual items while signing the rest (an item veto).

The rules that limit it

  • The spending limit. The state can budget no more than 99% of the revenue estimate, using the December estimate or a later, lower one. A higher spring estimate doesn’t raise the limit.
  • Reserve funds. Money left over is used to fill the state’s two reserves, the Cash Reserve Fund and the Economic Emergency Fund, to the levels set in law, before it can go elsewhere.
  • Supplemental appropriations add to or change the budget for the year already under way.

Where the money goes

General FundThe state’s main account, mostly from income and sales taxes. It pays for schools, health and human services, prisons and courts, and most of state government.
Other fundsMoney set aside by law for particular uses, like the Road Use Tax Fund for roads, plus federal money. They follow their own rules.
AppropriationPermission to spend a set amount on a particular purpose in a fiscal year.
Standing appropriationSpending set in the Iowa Code itself, so it continues each year without a new budget bill. School aid is the largest.
Budget areasThe appropriations subcommittees each cover one area: Administration and Regulation; Agriculture and Natural Resources; Economic Development; Education; Health and Human Services; Justice System; and Transportation, Infrastructure and Capitals.

Reading Funnel’s budget pages

  • Actual is what was spent in a fiscal year that’s over.
  • Estimated is the current figure for the year under way, including every standing appropriation.
  • Governor’s recommendation and enacted amounts appear for the year being budgeted, as the session goes.
  • Funnel shows the General Fund only, from the Legislative Services Agency’s appropriations tracking.

Explore the budget →

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Who's on the ballot, primaries, special elections, and how results become official.