Enacted Budget – Fiscal Year 2025
On May 9, Iowa Governor Kim Reynolds finished acting on the various bills that comprise the fiscal 2025 budget. General fund appropriations total $8.92 billion in fiscal 2025, an increase of $363. 2 million, or 4.2 percent, compared to fiscal 2024. Prior to revenue adjustments, general fund revenues are estimated at $9.64 billion in fiscal 2025, an increase of $11.6 million, or 0.1 percent, compared to fiscal 2024. After revenue adjustments of $338.2 million, general fund revenues are estimated at $9.30 billion in fiscal 2025, a decrease of $319.3 million, or 3.3 percent, compared to fiscal 2024. The enacted budget assumes an ending balance/surplus of $2.4 billion in fiscal 2025. Additionally, the balance of the cash reserve fund is estimated at $697.4 million at the end of fiscal 2025, or the maximum allowed 7.5 percent.
During the legislative session, the governor signed legislation that accelerates the flat income tax at a reduced rate of 3.8 percent, lowering the tax liability for every Iowan who pays income taxes. She also signed education-related bills, which increase the minimum salary for teachers to $47,500 and set a $60,000 minimum salary for teachers with 12 or more years of experience; focus on improving educational outcomes for students with disabilities and provides greater transparency; implement evidence-based reading instruction; expand work-based learning; and adjust per pupil funding to support educational freedom opportunities. Finally, the governor signed legislation which aligns Iowa’s 13 mental health regions and 19 substance use regions into seven unified behavioral health districts; extends post-partum Medicaid coverage; authorizes the use of resources to support Thrive Iowa, a platform that connects individuals in need with support outside of government; establishes a tax incentive program to recruit major development projects; streamlines boards and commissions; and cuts red tape and improves Iowa’s regulatory environment.