The so-called “surplus” is actually:

  • $600 million in one-time cash reserve funds (needed to help the state cash flow)
  • $250 million in one-time ending balance from this year (FY 12)
  • $200 million in on-going revenue growth for next year (FY 13)

The state budget is really about $12 billion. $6 billion appropriated by the state and $6 billion received from the federal government.

State law requires that 10% of the budget be set aside in cash reserves and not spent on ongoing operations. This means the $600 million is off-limits for existing and new spending.

The Legislature can legally spend the $250 million in one-time ending balance money from this year. However, this is a reckless and short-sighted budgeting practice because it builds $250 million of spending the following year without one-time money to pay for the new spending.

While the Legislature can spend up to 99% of the projected revenue, it is not required to spend at that level. The economy, federal debt, and anticipated federal cuts that will impact the $6 billion in federal funds received by the state require common sense and discipline.

Get CT In Your Inbox!

Don't miss a single update.

You May Also Like

The Des Moines Register Must Hate Homeschooling

The Des Moines Register once again attacks Iowa homeschooling families and the new freedom they enjoy under independent private instruction.

Floor Debate Picks Up, Budget Process Continues

Following the conclusion of funnel week, many bills finally came to the…

Rick Perry in Iowa: Obama is Waging War on People of Faith and Our Values

Governor Rick Perry (R-TX) was a keynote speaker at The FAMiLY Leader’s…

Lock your doors, Mister Rogers – there’s a thief in the neighborhood!

Cedar Falls, IA – The latest ad from Doris Kelley makes a…