Budget Cycle
Governor Submits Budget
February 1 

Fiscal Year Begins
July 1
Governor Signs Budget 

Budget Links

FY2023 (enacted)
FY2023 (proposed)
FY2022 (enacted)
FY2021 (enacted)
FY2020 (enacted)
FY2019 (enacted)
FY2018 (enacted)

Proposed Budget - Fiscal Year 2023

Iowa Governor Kim Reynolds released her fiscal 2023 budget proposal on January 11, which calls for $8.20 billion in total general fund appropriations, an increase of 0.9 percent from fiscal 2022’s estimated spending level of $8.12 billion. The largest program areas include education (56 percent), health and human services (27 percent), justice/judicial branch (9 percent), and property replacement/tax credits (5 percent). Total net general fund receipts are estimated at $9.21 billion, a 1.7 percent increase from estimated fiscal 2022’s level. In addition, the budget assumes an ending balance of $960.2 million and total reserve funds of $897.9 million. Total federal funds are estimated at $10.07 billion, a 12.4 percent decline from estimated fiscal 2022.

Proposed Budget Highlights 

The governor said her vison for Iowa is focused on the following areas: cutting taxes for all Iowans; making Iowa an employment destination; improving access to childcare; building Iowa’s health care workforce; preparing students for high-demand careers; providing educational choice and transparency for Iowa families; and growing the fuels of the future. Specific proposals include:


Cutting Taxes for All Iowans
  • Establishing a flat 4 percent individual income tax rate.
  • Eliminating retirement income tax.
  • Exempting net capital gains on sales of employee-awarded capital stock.
  • Reforming Iowa’s corporate tax rate.

Making Iowa an Employment Destination

  • Reforming the state’s unemployment system to re-employ out-of-work Iowans sooner.
  • Retaining Iowa’s law enforcement officers and recruiting others to the state.
  • Recruiting military veterans to civilian careers in Iowa.
  • Easing licensure requirements that delay employment.
  • Limiting non-economic damages in tort litigation.
  • Standardizing building codes to promote construction of attainable housing and childcare facilities.

Improving Access to Childcare

  • Finding childcare solutions for businesses.
  • Increasing support for childcare providers.
  • Providing quality childcare for families.
  • Investing in the childcare workforce.

Building Iowa’s Health Care Workforce
  • Strengthening existing programs that recruit new health care providers to rural communities.
  • Investing in residency programs that increase mental health specialists.
  • Developing high school Registered Apprenticeship Programs that create health care career pathways for Iowa’s youth.

Preparing Students for High-Demand Careers
  • Further expanding and integrating work-based learning into Iowa schools.
  • Growing and retaining Iowa’s education workforce.

Providing Educational Choice and Transparency for Iowa Families

  • Allowing a portion of Iowa’s per pupil educational funds to follow eligible students to private schools or other educational programs.
  • Requiring all public schools to publish course syllabuses, materials, and available library books online.
  • Requiring all high school students to pass the Civics portion of the U.S. Naturalization Service Test to graduate from high school.
  • Eliminating the need for Area Education Agencies (AEA) approval to place students receiving special education services in competent private instruction.
  • Eliminating the requirement for PreK-12 school librarians to have a master’s degree.

Growing the Fuels of the Future

  • All retailers with compatible infrastructure must offer E-15 by January 1, 2026.
  • Any newly installed or upgraded fuel infrastructure must be E-85 or B-20 compatible.
  • Invest $10 million in state funding each year for five years in the Renewable Fuels Infrastructure Program, on top of the nearly $50 million in state and federal funds already invested.
  • Optimize and extend fuel retailer tax credits to incentivize higher blends of ethanol and biodiesel.
  • Codify the Governor’s 2019 Executive Order which requires state vehicles with diesel engines to be B-20 biodiesel compatible.
  • Require the Iowa Department of Administrative Services to report annually on biodiesel usage by the state’s vehicle fleet.
  • The bill will remain revenue neutral, while increasing savings to the Road Use Tax Fund and imposing no additional cost for Iowans.