Wrapping Up the Legislative Session: Focusing on the State Budget

by Helena Hayes

As the 2023 legislative session comes to a close, things are slowing down around the Capitol. Almost all of the focus has turned to the state budget for fiscal year 2024, which is required to be passed before the Legislature can adjourn “sine die,”(meaning “without another day”) referring to the last adjournment of the session.

How is the state budget determined?

The state’s budget is determined by the Governor and the Legislature. They appropriate (designate certain money for certain purposes within the government) funds after the Revenue Estimating Conference estimates the revenue receipts from the previous year.

Each state agency prepares a budget request within the Governor’s guidelines and must submit their request by October 1st for the following fiscal (financial reporting) year. Iowa’s Fiscal Year is July 1st through June 30th.

The Revenue Estimating Conference meets by December 15th to set revenue estimates, which serve as the basis for the General Fund budget for the following fiscal year. The conference consists of the Governor (or Governor’s designee), the Director of Legislative Services Agency, and a third member agreed to by the other two. Estimated revenue is determined by the projected amounts that come in to the General Fund from sales tax, personal income tax, corporate income tax, and use tax, as well as other sources.

The Governor reviews the budget requests made by state agencies, holds public hearings, and compiles recommendations for the Legislature by January. The Governor’s budget is required by law to be balanced and to meet spending limitations.

The House and Senate conduct joint budget meetings during January and February. The seven joint budget subcommittees make recommendations for the different budget categories and report them to the Appropriation Committee of each chamber. A budget bill is compiled and examined by each subcommittee.

Once the budget bill is passed in the same form by both chambers, it is sent to the Governor for approval.

The Iowa Constitution gives the Governor the ability to “line-item veto” appropriations bills. This means she can effectively strike out single lines of the bill. If she uses the line-item veto power and the legislature disagrees, they can override that veto with a majority vote.