Here’s how Iowa’s $8.9 billion 2025 budget will be spent

DES MOINES — Iowa’s budget for next year, just shy of $9 billion, was finalized by state lawmakers early Saturday morning and passed on to Gov. Kim Reynolds’ desk.

The $8.9 billion figure represents a 4.7% spending increase from the current budget year.

Among the new initiatives in next year’s budget are increased salaries for judges, funding for a new state Division of Special Education, and funding to increase accessibility at Iowa’s state parks.

The Republican-led House and Senate passed the bills in marathon sessions on Thursday and Friday — and into the wee hours of Saturday morning — remaining in session for a combined 38 hours over the two days and change.

Reynolds, a Republican, must sign the bills before they become law. She has authority to veto specific budget lines.

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Education: $1.018 billion

The state’s education budget, Senate File 2435,  devotes $10 million to the Department of Education to set up the Iowa Division of Special Education. The money is being moved from the area education agencies’ budget as a result of the AEA overhaul legislation Reynolds signed into law in March.

The education budget spends just over $1 billion on the Department of Education, Board of Regents and Department of the Blind, representing a 3.6% increase in funding from last year. Funding for K-12 education, which is expected to be around $3.8 billion, is contained in a separate budget.

The bill overhauling the funding and structure of the area education agencies, which dominated the first three months of the session, brought much of their operation and oversight under the state Department of Education.

The $10 million setting up the Division of Special Education will be used for “general supervision, oversight, compliance, employee salaries, support, maintenance, and miscellaneous purposes within the area education agency regions and the Department of Education main office,” the bill says. The funds would be used to hire up to 62 new full time employees.

University of Iowa campus

In this Aug. 24, 2020, students wearing face masks walk along Clinton Street past the Old Capitol Building during the first day of in-person classes for the fall semester at the University of Iowa campus in Iowa City, Iowa.

The budget includes a 2.5% general fund increase to Iowa’s three public universities, bringing their funding total to $573 million. In addition, it would ban the public universities from establishing or spending money on diversity, equity and inclusion offices for any reason that is not necessary to comply with federal or state law or accreditation standards.

The bill also includes a $172,000 increase in funding to Iowa PBS to pay for digitizing its historic archives, a project started at the direction of the Legislature in 2021.

Standings: $4.6 billion

The standings budget bill is typically the last to be approved each legislative session, as it becomes a sort of grab-bag for any spending items — and sometimes policies — that do not fit in other budgets.

The budget, Senate File 2443, includes the area education agencies’ funding, which would be cut by a total of $32.5 million.

Some $10 million would be moved from the AEAs to the new Special Education Division. About $14 million would be diverted to school districts to increase school staff pay. A pre-set annual reduction would result in another $7.5 million cut.

Sen. Janet Petersen, a Democrat from Des Moines, said the budget amounted to a “slash to the AEAs.” Sen. Tim Kraayenbrink, R-Fort Dodge, said the $10 million would go to support salaries of officials that will likely transfer from the AEAs to the Department of Education.

The $3.8 billion K-12 school funding is covered under the standings bill.

Health and Human Services: $2.214 billion

Democrats argued that Republicans’ health and human services budget — House File 2698 — which devotes $2.2 billion from the state’s general fund, does not address issues in Iowa’s nursing homes or with high cancer rates in the state.

Democrats emphasized the need for increased investment in cancer research, citing Iowa’s high cancer and pediatric cancer rates.

Rep. Josh Turek, D-Council Bluffs, offered an amendment voted down by Republicans to provide $1.5 million for childhood cancer research that would go to the University of Iowa Hospitals and Clinics.

Turek mentioned the Hawkeye Wave at University of Iowa football games, where at the end of the first quarter fans turn their attention and wave to patients at the UI Stead Family Children’s Hospital.

“Kids don’t need our waves. What they need is our money,” he said. “If we really really care about this, we won’t just wave to the kids. We will do something about this. We will put our money where our mouth is.”

Rep. Joel Fry, a Republican from Osceola and chair of the House Health and Human Services Appropriations Committee, said Iowa receives $19.6 million from the National Cancer Cancer Institute. Additionally, the UI Holden Comprehensive Cancer Center receives $39 million in federal grants for research.

Sen. Claire Celsi, D-Des Moines, criticized Republicans’ budget for not containing more funding to help nursing homes address staffing and patient safety issues.

“There remains an urgent crisis in our nursing homes,” Celsi said. “Seniors and vulnerable Iowans are asking us to fix this. … They are depending on us, and we have failed them.”

Judicial Branch: $220 million

Judges and magistrates in Iowa would see a 5% pay increase in the proposed judicial system budget, Senate File 2436, which covers funding for the state courts.

The salary increases would cost $2.4 million out of the $220.2 million budget for the judicial system.

Caitlin Jarzen, the lobbyist for the state judicial branch, said during a subcommittee this week that a low salary is an impediment to finding judges in the state. Lawyers can make more money in other government jobs, she said, and the state has seen a 63% decrease in judicial applicants since 2003.

“It creates a big issue for us with retention and recruitment,” she said. “Looking at all of our neighborhood states. We are dead last in every state that touches us for judicial salary.”

Iowa ranks 43rd in the U.S. in pay for general jurisdiction judges, according to the National Conference of State Courts.

Rep. Brian Lohse, R-Bondurant, who managed the budget in the House, said that both parties in the chamber made raising judges’ pay the “number one priority” for the budget.

“While we still have work to do in this area, we are certainly able to make a significant step forward,” he said.

The bill will also adjust the contributions judges must pay into their retirement system. The current system requires judges to pay a variable rate, which is at risk of increasing up to 16% in the next 20 years, Jarzen said.

The bill would still require judges to pay a variable rate, but it would increase the state’s contribution and cap the annual increases in the contribution rate.

Justice System: $693.3 million

The justice system budget funds the Iowa Attorney General’s Office and state departments like corrections, the Iowa National Guard, Iowa State Patrol and State Public Defender. It includes a $2.8 million increase for the Iowa Attorney General’s Office, which include money to hire six new full-time positions.

The budget, Senate File 2693, adds $11.9 million for the Department of Corrections, including funding to increase minimum starting pay for corrections officers to $24 an hour. It also requires the department to submit a report to lawmakers by Dec. 15 regarding the salaries of corrections officers to ensure that the increase in starting pay does not cause a compaction of the salaries of current corrections officers.

Lawmakers also provided an additional $2.3 million for the State Public Defender’s Office, including money to raise the pay of private attorneys who agree to represent indigent defendants for a third straight year by $3 an hour. The budget also transfers $2 million from the state’s indigent defense fund to hire 12 new salaried attorneys in areas of the state lacking contract attorneys willing to represent defendants unable to afford an attorney, including Scott County.

Democrats said the Corrections increase was not enough to address understaffing and improve working conditions for correctional officers.

Rep. Eric Gjerde, a Democrat and Cedar Rapids police officer, said the department is struggling to recruit and retain officers due to forced overtime, and that officers can make a higher starting salary working in surrounding states and county jails in Iowa’s largest cities.

Democrats also offered an amendment voted down by Republicans to provide state funding to cover a cut in federal funding that provides services to victims of violent crime.

Rep. Brian Lohse, a Republican from Bondurant and chairman of the justice system appropriations subcommittee, said the Attorney General’s Office and various groups are working with members of Iowa’s congressional delegation to replenish the funds, but will require congressional approval.

Should Congress not come through, Lohse said the intention is state lawmakers will provide emergency funding “as quickly as possible” next year.

Agriculture and Natural Resources: $46 million

Democrats expressed concern that Republicans’ proposed agriculture and natural resources budget – which would spend $46 million from the state’s general fund and $97 million from other funds – does not sufficiently fund the state Department of Natural Resources so that the state can address repair needs in the state’s public parks system.

A recent report by a since-retired senior Iowa DNR officer said Iowa’s state parks — visited by up to 16 million people a year — need more than $100 million in repairs for fixing leaking roofs and rotting shelters and updating sewage lagoons, and many of the parks are not accessible to people with disabilities.

Republicans’ ag budget, Senate File 2421, includes a new $296,000 for improving accessibility at state parks, $7.2 million for park maintenance, and a requirement that at least 50 DNR positions be dedicated to park maintenance and upkeep.

Rep. Sami Scheetz, R-Cedar Rapids, called those funding levels “a drop in the bucket” of what’s needed.


Maquoketa Caves State Park in Maquoketa, Iowa.

“We need money to repair these parks, to make sure that they’re ADA compliant so that Iowans with disabilities are able to access and enjoy our state parks just like the rest of us,” Scheetz said. “Our open spaces and state parks are critically important, especially for young people like me who are going to be in Iowa for generations to come. It’s an investment that needs to be a priority.”

Sen. Dan Zumbach, R-Ryan, defended Republicans’ $7.2 million for park maintenance, calling it “a lot of money.”

“I think we have a wonderful state park system,” Ryan said. “I think there’s a real sense of awareness that they are important.”

Other budgets

Economic Development: $42 million

This budget, Senate File 2432, funds workforce and business development projects in the Iowa Economic Development Authority. The budget includes a new $2 million fund for a workforce training program.

Rebuild Iowa Infrastructure Fund: $216.6 million

This budget, House File 2691, is separate from the general fund, and funds infrastructure and other projects.

Transportation: $453.1 million

The transportation budget, Senate File 2422, funds the Department of Transportation using the road use tax fund.