The start of the 2021 Iowa legislative session is less than three weeks away, but Governor Kim Reynolds says it may be far longer before officials sort out how much more the state will get in federal pandemic relief — and whether some of the billion-dollar state surplus and cash reserve will be tapped.
“While the State of Iowa really is in great fiscal health when you consider the year that we just went through whether it’s Covid-19 or it’s a drought or it’s the derecho that hit a large majority of our state,” Reynolds says, “we’re not through Covid-19 and so we have to continue to monitor it very carefully and continue to see what the impact is to revenues.”
A panel of experts predicts state tax revenue will grow by 3.7% in the next state fiscal year. The bill that cleared Congress this week will send Iowa and other states millions to distribute Covid vaccines, pay for more testing, and perform other local public health functions. There’s more money for child care and Head Start programs as well as food assistance. It also gives states another year to spend money from the CARES Act that passed last spring.
“This will allow us to put Iowa’s remaining balance of about $47 million to work in programs that will continue to make a positive difference for Iowans,” Reynolds says.
If congress hadn’t taken action this week, Reynolds says she was prepared to distribute that $47 million before the end of the year. About 45 percent of what’s left is the $21 million Reynolds had intended to spend on new state computer software, but the U.S. Treasury’s inspector general ruled that wasn’t a pandemic-related expense.