West DSM News

State budget plans are up in the air in Iowa, as the financial implications of COVID-19 remain uncertain.

In April, lawmakers in the General Assembly typically have an idea of what their state budget will be and how they plan on accomplishing it, but all 2020 legislative priorities have been put on hold while the state and the country deals with the ever-changing reality of the pandemic.  

Lawmakers expect to resume 2020 budget talks at some point this year but that date has yet to be determined, according to the Quad-City Times.

Legislators are focusing on “making sure Iowans are safe and making sure that we limit the spread of the coronavirus as much as possible,” Senate Majority Leader Jack Whitver told the Quad-City Times.

Once the pandemic curve has been flattened, Whitver expects a budget to be passed but the number of policies put forth by the majority party will possibly be scaled back.

In terms of the budget, Iowa is operating on a surplus with full 10% reserves, according to Whitver.  

Whitver believes this will help the state survive the economic impact of COVID-19, but a Moody's economist estimates the virus will have a 15 to 25% impact to state budgets nationwide, according to the Quad-City Times.

Sen. Joe Bolkcom said it's impossible to know just how much the pandemic will affect the economy in Iowa.

“I think it’s going to be jaw-dropping,” Bolkcom told the Quad-City Times.

Republicans and Democrats in the state believe they will have to go back to the drawing board on their $8 billion spending plans.

Whether the $1.25 billion in federal funding from the Care Act will be part of the revised spending bill is yet to be determined.

Gov. Kim Reynolds has already signed off on a 2.3% spending increase for grades K-12 totaling about $85.6 million but it's unknown if that commitment will remain in place.

The Invest in Iowa Act and GOP tax plans are also shrouded in uncertainty.

“This is no time to raise taxes or cut taxes. I hope this crisis basically puts off any consideration of that," House Leader Todd Prichard told the Quad-City Times.

In March, lawmakers gave Reynolds the authority to use almost $20 million from the state's Economic Emergency Fund to deal with the pandemic.

Legislators also set aside money to help keep the state running under a "status quo," until Sept. 1.