Hunter
12/14/25
Forecasters with the Iowa State Revenue Estimating Conference say Iowa will take in more money in fiscal year 2027 than this year, but that’s still nearly a billion dollars short of what the state is spending this year.
The Des Moines Register reports Gov. Kim Reynolds must use Thursday’s estimate when she submits her proposed budget to the Iowa Legislature in January.
By law, Iowa cannot spend more than 99% of available revenue. For fiscal year 2027, that includes the $8.5 billion the state is anticipated to collect as well as Iowa’s ending balance — the money expected to be left over when the current fiscal year concludes — which sits at $1.9 billion.
Iowa lawmakers earlier this year approved a $9.42 billion budget for the current fiscal year, leaving roughly a $1.3 billion spending gap that the state is filling using a mix of its budget surplus and money from the Taxpayer Relief Fund. Republicans have said they saved money to build up those funds so they could be tapped to offset the loss of revenue from Iowa’s income tax cuts.
Democrats say Republicans have been poorly managing the state budget and have strapped Iowa with a historic budget deficit. Janet Peterson, the top Democrat on the Senate Appropriations Committee, says the Republicans champion corporate tax giveaways and unlimited private school subsidies that prioritize the privilege of the few over the needs of the many.