State Auditor, Dave Vaudt, says while revenue is growing, the state could face some tough finances over the next couple of year due to its reliance on federal funding. Vaudt says the state collected $8.3 billion from the Federal Government in 2010 compared to $4.9 billion in 2006.
“So to the extent the federal government reduces funding to the states, which we all know is inevitable,” Vaudt says, “we need to be planning today to say how we’re going to carry out the same level of services or how we’re going to change the delivery of those services when we run into less federal assistance which is going to put more actual pressure on the state dollars that we collect here each year.
Much of the federal money that came to Iowa was due to economic stimulus and disaster funding, but Vaudt say Iowa also relies heavily on the federal government for Medicaid payments. “What every state in this nation needs to be thinking about is, what is the impact of the federal financial situation getting corrected going to mean to state finances?,” Vaudt says.
Vaudt says there was a significant increase over past two years as the state collected additional money from the stimulus package and for disaster relief. And he praised Iowa lawmakers for reducing the state’s reliance on federal funding as federal stimulus money ran out. Vaudt says a dramatic reduction in federal funding would make it even more difficult to balance Iowa’s budget.
He says that’s why it was so important that Iowa lawmakers reduced the state’s reliance on federal funding this spring as the stimulus money ran out.