Governor Kim Reynolds announced, Iowa will “end Fiscal Year 2020 with a balance of $305.5 million in its General Fund.” Governor Reynolds and the Republican legislature have been following prudent budget policies. This has been especially difficult considering the COVID-19 pandemic and uncertainty in the agricultural markets.
"Fiscal responsibility has put the state of Iowa in a strong position despite some significant challenges ranging from a global pandemic to trade disruption,” stated Governor Reynolds. During the past legislative session Governor Reynolds and the legislature continued to follow a cautious approach by passing a status quo budget for Fiscal Year 2021.
“Iowa is in a strong financial position due to responsible spending practices and our strong cash reserves of over $770 million,” said Dave Roederer, Director of the Iowa Department of Management.
In October, the Iowa Revenue Estimating Conference, will meet and provide an update on revenue projections. Although it is unclear what the results will be as COVID-19 continues to hamper the economy, it is starting to recover.
Iowa is an example that fiscal conservativism is the best policy. As the pandemic started, Iowa’s fiscal house was in order and the economy was strong. This was essential in cushioning the economic impact of COVID-19 in Iowa. This is a stark contrast to our neighbors in Illinois, whose fiscal house is collapsing because of massive unfunded pensions combined with poor tax and spending policies.
The fiscal policy principles of limited spending, conservative revenue estimates, and keeping tax rates low lead to responsible budgeting. These principles will not only generate economic growth, but they prepare the state for economic downturns and emergencies. Following these principles also place taxpayers first.