State Budget

A tax hike on HMO health insurance plans that would raise money to help the state pay for Medicaid has advanced through committees in the Iowa House and Senate. Insurance and business group lobbyists criticized the proposal, saying it would raise health care costs for Iowans.

The state of Iowa’s spending is once again expected to exceed its revenue by about $1 billion in the next fiscal year as revenue declines due to state and federal tax cuts.

On this Newsbuzz episode, forecasts of budgeting in the 2026 legislative session, a recap of an inaugural summit at the University of Iowa's state legislature-imposed Center for Intellectual Freedom and the upcoming retirement of Iowa State University President Wendy Wintersteen. Also, Team USA women's wrestling coach Terry Steiner and Ukrainian wrestler Andrey Vorontsov discuss the two-week training camp they're having this month on the UI campus. This will culminate in a dual meet at the Xtream Arena on Dec. 18.

Iowa will have to dip further into its reserves to cover a larger budget gap than expected as federal tax changes add to the impact of state tax cuts. Republican leaders say they have saved enough money to pay the state's bills, while Democrats say the majority party is mismanaging the state's finances.

Iowa lawmakers will need to use some of the state’s savings to cover part of the state budget next fiscal year, after revenue forecasters estimated Thursday that Iowa will bring in about $400 million less next year than it spent this year.

Iowa Gov. Kim Reynolds has asked lawmakers to use about $700 million of state savings to cover the gap between her proposed budget and the amount of revenue the state is expecting in the coming fiscal year.

Iowa’s income tax rate dropped to 3.8% Wednesday for all residents who pay income tax, the result of several rounds of tax cuts passed by Republican lawmakers in recent years.

Iowa’s state revenue is expected to decline by about $1 billion over a two-year period because of major tax cuts signed into law by Gov. Kim Reynolds, according to Iowa’s revenue forecasters who met Thursday.

Iowa’s Revenue Estimating Conference predicted Wednesday that state tax revenue will fall by about 1% this fiscal year and next as tax cuts passed in 2022 continue to phase in.

The University of Iowa and the University of Northern Iowa received funding to help address nursing and teaching shortages in the state while cuts were made to a program that tracks water quality and another that provides additional services to Iowa children outside of public schools.