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Iowa Department of Management

Significant Budget Policies

The following budget and financial policies help ensure the budget is not only balanced but sustainable for the long term.

Maintaining the Reserve Funds

Maintaining reserve funds is crucial in ensuring fiscal sustainability. That does not mean the funds should never be used; they are clearly in place for emergencies. However, a balanced approach in using the reserves is important to maintain structural budget balances.

Using One-Time Funding for One-Time Purposes

Using one-time funding for ongoing operations creates a structural gap in the budget. One-time funds should be identified and used only for one-time purposes.

Biennial Budgeting

Biennial budgeting helps remove the incremental cost increases that creep into base budgets simply due to the fact that the budget is created annually. Biennial budgeting will also provide additional funding stability to those entities dependent on state resources and help smooth the highs and lows that can occur with annual budgeting.

Long-Term Planning

A five-year financial plan for state government allows the Governor and Legislature to better track the long-term impacts that taxing and spending decisions have on the ability of the state to balance its budget, meet critical needs, and avoid budget cliffs for years into the future.