Iowa

State Budget Practice Report Cards and Budget Resource Guide

Iowa’s average A grade for budget maneuvers in fiscal 2016 through 2018 reflected the state’s general disdain for using one-time revenue measures to cover recurring expenditures and achieve balance. Iowa faltered in 2017, when a revenue shortfall led it to transfer $25.1 million into the general fund from other funds—resulting in a B in the category for the year. The state did not repeat the move in 2018, however, and again earned an annual mark of A.

In contrast, Iowa scored a C average in the transparency category. The state failed to disclose deferred infrastructure replacement costs—along with forty-five other states in 2017 and 2018—and fell short in tax expenditure disclosures. Although Iowa passed legislation in 2012 to increase the frequency of tax expenditure reports to every year from every five years, it has not produced one recently. It did provide information on the top twenty sales and use tax expenditures for fiscal 2017, however.

Iowa was one of only eight states to receive an A average in legacy costs, partly because it provides only minimal public worker postemployment benefits, such as health care. 

The state, which has solid policies for maintaining and disbursing reserve funds, received a B average in that category. It missed getting an A because it does not tie the level of its rainy day fund to historical revenue volatility, a common shortcoming among states.

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 2018 Volcker Alliance report, Truth and Integrity in State Budgeting: Preventing the Next Fiscal Crisis 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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