Iowa should exercise caution in drafting the next budget plan because revenue growth has slowed, a top budget adviser to Gov. Terry Branstad said Thursday.
Department of Management Director David Roederer said the slowdown in revenue growth was due in part to the falling corn and soybean prices paid to farmers.
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"It's like any household. If you're not having as much revenue come in as you first projected, you can't spend as much as you expected," Roederer said.
Branstad will kick off a series of budget hearings Friday as he readies the state's next financial plan. Department heads and elected officials are set to present information to Branstad and his staff. More than 40 hearings will be held, concluding in mid-December. The process includes a session for the public to weigh in with their concerns.
The governor will present his budget plan for the fiscal year that begins July 1 to the Iowa Legislature in early 2015.
Iowa's current general fund budget includes nearly $7 billion in spending. While state revenues have grown compared to the previous year, the gains have been more modest than originally anticipated.
The state has significant surplus dollars, but they are needed to pay for two substantial items Branstad and the Legislature approved in 2013 — new education spending and a commercial property tax cut.
Roederer said most departments will not be seeking significant budget increases this year, but the hearings are an opportunity to talk about plans for the future.
"It will be a challenging budgeting year, but every year should be a challenging budget year," Roederer said.