How does the budget process work?

Each summer the three institutions governed by the Board (University of Iowa, Iowa State University, and University of Northern Iowa) review the institutional funding needs and requests for the following fiscal year. Those requests are then submitted to the Board of Regents for review. Upon reviewing the requests, the Board makes the final determination of which requests at what funding levels will be forwarded to the State. 

The Board of Regents, along with other state departments, must submit their budget requests by October 1. The Governor reviews these requests and by February 1, the Governor presents the budget recommendations to the Legislature, accompanied by detailed documents such as the "Budget in Brief" and the "Big Budget Book." The Legislature then reviews these recommendations and passes appropriation bills that specify the funding allocations for each department. The Governor has the authority to sign these bills into law, veto them, or make item vetoes. Once the budget is approved, state agencies develop spending plans based on the enacted bills, and these plans are monitored throughout the fiscal year, which runs from July 1 to June 30.

What is the Revenue Estimating Conference (REC)?

The Revenue Estimating Conference is a three-member committee comprising individuals knowledgeable about state revenues and the economy. The REC is charged with setting the official estimate of state revenues (such as income tax and sales tax) that will be available for the following fiscal year. The estimate must be set by December 15th. This estimate is the limit of spending allowed by the Governor and the Legislature when setting the budget for the following fiscal year. The state's fiscal year runs from July 1st through June 30th.

What is the Expenditure Limitation (99% Law)?

The State of Iowa has a law which allows the state to spend only 99% of the revenue estimate. This limitation was put into place in the early 1990s when the state went through budget deficits. The rationale for the limitation is that the state will have a 1% cushion each year in case revenues fall below the revenue estimate.

What are reserve accounts?

Iowa also has two reserve (savings) accounts, the Cash Reserve Fund and the Economic Emergency Fund. By law, the maximum amount each of these funds may accumulate is 5% of the total revenue estimate for that year. The money in the Cash Reserve Fund is available for unforeseen expenses, but also can be used to pay the state's bills over the course of the fiscal year until the projected revenues are collected. Once these receipts are collected the Cash Reserve Fund is repaid. The Economic Emergency Fund is designed to have revenues on hand in case of an unforeseen economic emergency such as a flood.

How is the Governor's budget recommendation developed and implemented?

Traditionally, the Governor lays out the budget (which includes all spending and cutting recommendations) in the Condition of the State Speech, which is given on the second day of the Legislative Session. After the Governor's budget recommendation has been received, the Legislature assigns specific portions of the Governor's budget recommendation to different appropriations subcommittees to review based on the topical jurisdictions listed below.

A. Administration and Regulation Subcommittee
1. Auditor
2. Commerce
3. General Services
4. Governor
5. Management
6. Secretary of State
7. Ethics and Campaign Finance Disclosure
8. Inspections and Appeals
9. Personnel
10. Revenue and Finance
11. State/Federal Relations
12. Treasurer

B. Agriculture and Natural Resources Subcommittee
1. Agriculture
2. State Fair Authority
3. Iowa Family Farm Development Authority
4. Natural Resources

C. Economic Development Subcommittee
1. Economic Development
2. Iowa Finance Authority
3. Public Employment Relations Board
4. Workforce Development

D. Education Subcommittee
1. Board of Regents
2. College Student Aid Commission
3. Cultural Affairs
4. Education
5. Iowa Public Television

E. Health and Human Rights Subcommittee
1. Blind
2. Elder Affairs
3. Governor's Substance Abuse Coordinator
4. Human Rights

F. Human Services Subcommittee
1. Child Support Recovery
2. Children's Health Insurance Program
3. Family Investment Program, Promise Jobs, Food Stamps
4. General Administration
5. Medical Services
6. Temporary Assistance for Needy Families Block Grant (TANF)
7. Child Care
8. County Based Services
9. Field Operations
10. Foster Care
11. Institutions
12. Juvenile Justice
13. Mental Health / Mental Retardation / Developmental Disabilities Enhanced Services
14. Social Services Block Grant

G. Justice System Subcommittee
1. Corrections
2. Iowa Law Enforcement Academy
3. Parole Board
4. Public Defense
5. Indigent Defense / Public Defender
6. Judicial Department
7. Justice Department
8. Public Safety

H. Oversight and Communication Subcommittee
1. Iowa Telecommunications and Technology Commission
2. Technology Investment Account
3. Information Technology Services

I. Transportation, Infrastructure and Capitals Subcommittee
1. Transportation
2. Expenditures from RIIF