Iowa

State Budget Practice Report Cards and Budget Resource Guide

Iowa won top A grades from the Volcker Alliance for its handling of legacy costs, primarily public worker pensions and postretirement health care, over fiscal 2015 through 2017. The state requires full actuarially based funding for its pensions each year and thus maintains reasonably high funding levels. Since fiscal 2015, Iowa has contributed more than its pension plan actuaries recommended—after a decade in which the state did not appropriate the full amount.

Iowa also received an A in 2015 and 2016 for avoiding one-time budget maneuvers, but that grade dropped to a B in 2017, when it transferred more than $25 million from nongeneral fund sources into the general fund. The sum included about $12 million from the Grow Iowa Values Fund, which provides cash for economic incentives, and smaller amounts from other funds, including the Cultural Trust fund and the strategic investment fund.

Iowa’s budget forecasting garnered lower marks, with a C in 2015 and 2016 and a D in 2017 as the state resorted to midyear budget adjustments to keep its books in balance. For 2017, the Senate approved such an adjustment, making $117.8 million in expenditure cuts to prevent a projected state budget shortfall. Iowa’s forecasting grade also suffered from the state’s lack of multiyear revenue estimates.

Download Printable State Report Card

To emphasize the need for clear and comprehensible budgets to inform citizens, promote responsible policymaking, and improve fiscal stability, the Volcker Alliance in 2016 began a study of budgetary and financial reporting practices of all fifty states. The Volcker Alliance’s mission is to improve the effectiveness of the administration of government at all levels. Making state budgeting more transparent and accountable is an important part of that goal.

The report cards presented here are taken from the 2017 Volcker Alliance report, Truth and Integrity in State Budgeting: What Is the Reality? which proposes a set of best practices for policymakers. For those wishing to gain greater insight into state fiscal issues, the accompanying budget resource guide is derived from the Alliance publication State Budget Sources: An Annotated Guide to State Budgets, Financial Reports, and Fiscal Analyses (2016). 

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