The state of Iowa has until September 30 to close the books on FY17. This summer, it looked certain that Governor Kim Reynolds would have to call the Iowa Legislature into special session to balance the budget. After a briefing with the Department of Management and Department of Revenue, Reynolds announced that a special session was not necessary.
The Governor’s office announced that the expected budget shortfall for FY17 is $14.6 million. Reynolds will combine $13 million from the state’s economic emergency fund with the $1.6 million ending balance. The amount of the transfer is well under the legal amount of $50 million that she could transfer from the economic emergency fund without legislative consent. Reynolds’ decision is the final action for FY17 which ended on June 30. The Governor’s office said the reserve fund balance is currently $605 million.
“This has been a difficult budget year, but I am pleased we were able to manage lower-than-expected revenues without cuts to education or Medicaid,” Reynolds said in a released statement. “We have been monitoring funds daily since the end of the fiscal year on June 30 and took a measured approach in dealing with the state’s finances. We continue to closely monitor the current fiscal year’s balance sheet and do not believe action is needed at this time.”
Department of Management Director Dave Roederer during a budget briefing on Wednesday morning shared the following final figures for FY17:
- The Revenue Estimating Committee (REC) estimated 2.7% growth in the FY 2017 budget. Actual growth was 2.5%.
- Accruals (tax payments due June 30, 2017, that came in after June 30, 2017) totaled $73 million.
- After stalling earlier this year, Iowa’s corporate income taxes came in stronger than expected at 5.6% vs. the REC estimate of 0%.
- Corporate taxes make up 6.5% of Iowa’s general fund.
- Projected FY 2017 revenue from the REC: $7.106 billion
- Actual FY 2017 revenue: $7.095 billion
- Projected FY 2017 net appropriations: $7.254 billion
- Actual FY 2017 net appropriations: $7.258 billion
Update: Iowa House Speaker Linda Upmeyer (R-Clear Lake) released the following statement:
“Governor Reynolds’ diligent and thoughtful approach was the right decision. While others were reactionary, she demonstrated the steady leadership Iowans expect. House Republicans will continue to fight off unsustainable spending schemes proposed by Democrats and will work with Governor Reynolds to keep Iowa moving forward.”
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