From the January 2026 edition of The Prairie Progressive, Iowa’s oldest progressive newsletter. The PP is  funded entirely by reader subscription, available in hard copy for $15/yr.  Send check to PP, Box 1945, Iowa City 52244. Click here for archived issues

by Mike Owen

There’s a lot of talk these days about affordability. It’s important for household budgets, and it’s equally important for the state budget.

Want to restore Iowa’s commitment to PK-12 education, to state universities and community colleges? Want to enforce safety in workplaces and environmental quality? Hoping for stronger initiatives in mental health and health care access? Want to make sure nutrition assistance reaches all eligible Iowans?

As things stand in Iowa, we cannot afford it.

It’s a choice our state’s leaders have made not just for today, but for years to come. Sustainability of these traditional responsibilities is simply not the focus of Governor Kim Reynolds and the Republican leadership of the Legislature.

Lots of numbers show it. For starters, keep three numbers in mind:

• $9.4 billion. That’s the current state budget.
• $1.3 billion. That’s how short we fall of making the budget with current revenues.
• $328 million. That’s how much state money we’re diverting to private school systems through Reynolds’ voucher program.

Those numbers are for this year, but they matter far beyond. They set the scene for the new legislative session, the new budget, and what is to come if our state continues on the path charted by the Republican governing trifecta now in its tenth year. This path makes traditional Iowa priorities unsustainable—or, one might say, unaffordable.

We can afford a $9.4 billion budget this year only because legislators can patch the hole in it—for now.

They deliberately created and banked surpluses by cutting or holding down investments below inflation in education and other services, at the same time revenues held strong. Federal support in pandemic recovery offered a temporary boost to the Iowa economy and revenues, and lawmakers used it as a smokescreen.

They cut taxes—big time. Their own fiscal analysts told them the tax cuts they passed in 2022 and 2024 would be a $2 billion hit to revenues by this budget year.

But they were crafty, as this year shows. Faced with a $1.3 billion gap between falling revenues and ongoing spending, they bridged it with banked surplus money. That obscures the real fiscal picture because the surpluses are one-time money while the tax cuts are permanent, and the surpluses are quickly vanishing. Projected at $2.2 billion just a year ago, the FY 2027 surplus is now projected at about a quarter of that—$546 million.

What they avoid is what’s next. What drops when the surpluses are gone? Is it the 2% per-pupil funding growth we’ve averaged for the last 15 years, when educators have sought 4% or 5% to meet needs? Will it be Medicaid services we decide we can no longer afford? Will it be SNAP benefits the federal government is forcing states to take on while at the same time cutting back their administrative support? Will we ever adequately regulate, monitor, and enforce standards for water quality? Who will pay increased prison costs as lawmakers debate tougher sentencing?

The simple truth is that with tax cuts, revenues fall, and that’s a permanent cycle unless reversed, which Iowa’s current leaders are not willing to do. In fact, some aim to assure it with constitutional amendments that may reach the ballot next fall.

Our leaders in both parties need to be upfront with their constituents now about the problem and the solutions, which—yes—involve restoring and restructuring a progressive income-tax rate structure for individuals and corporations, curtailing corporate tax loopholes, and decoupling from several Trump-era federal tax changes that target benefits to the wealthy.

If the political willingness were there, we could afford first-rate education that offers opportunity for our young people and attracts forward-thinking businesses to our state. We could afford clean water and good health care.

We could afford to do this right. The question really is, can we afford not to?

—Mike Owen of West Branch recently retired as deputy director of Common Good Iowa. He remains engaged in analysis of Iowa’s fiscal picture, and of the Chicago Cubs’ fortunes, for which he is more optimistic.