Rural Matters: Issue Deep Dive - Government Budgets

Each year we spend this past week shooting off fireworks, watching small town parades, and grilling pork chops to celebrate our nation’s birthday. But what many may not realize July as a key date for other key pieces of our government — specifically the budget. In Iowa, July 1 marks the start of the new fiscal year and at the federal level this week we are seeing Congress debating the dozen different spending bills that guide future funding of all the critical activities of the government.Let’s break down the budget processes at the federal, state, and local levels. Federal Level:

1. Budget Requests: A year in advance federal agencies create budget requests and submit them to the White House Office of Management and Budget (OMB).
2. OMB Review: OMB reviews agency requests and develops the budget proposal for the president.
3. President’s Proposal: The president submits the budget proposal to Congress early the next year, generally at or immediately following the State of the Union address that is commonly in late January or early February.
4. Congressional Debate: When done in regular order, the entire budget is divided amongst 12 subcommittees, each responsible for different government functions. While they have the President’s proposal, the House and Senate leaders will create their own budget proposals, which are generally the start of the debate. Both chambers must pass a single version of each 12 funding bills. When multiple appropriations bills are combined together that is commonly called an omnibus, which is a tool very commonly used by Congress in recent years. See the status of each appropriations bill for FY25 by visiting the CRS website.
5. Final Approvals: Congress sends approved funding bill(s) to the president for signature or veto, and the new fiscal year begins October 1.

To learn more about the federal budget process, check out this report from the Congressional Research Service.State Level (Iowa):

1. Budget Requests: State agencies develop budget requests by October 1 and submits them to the Department of Management (DOM) for review. The DOM holds public hearings that allow for additional public input.
2. Governor’s Recommendations: The Governor reviews the requests and develops a budget recommendation. This is formally submitted to the Legislature by February 1, generally at or immediately following the State of the State address.
3. Legislative Process: Legislators on the appropriation subcommittees hear presentations from each agency related to their budget requests during the legislative session. The recommendations will undergo review and debate at the subcommittee and full committee level before a full floor vote in each chamber. The House and Senate must pass matching budget bills before the end of the legislative session.
4. Governor’s Decision: The Governor may sign the bill in full, veto it in full, or line item veto- which is striking a specific piece of a proposed funding bill. Bills becomes law upon the Governor’s signature or after three days during the session if the Governor takes no action. Bills received by the Governor during the last three days of the session have to be signed or vetoed within 30 days. If the Governor takes no action on the bill after the 30-day time period, the bill is considered vetoed.
5. Spending Plans: State agencies enter spending plans based on enacted appropriations bills and the new fiscal year starts July 1.

To learn more about the state budget process, check out the Iowa Department of Management webpage.Local Level (IA Cities & Counties):

1. Certify Values and Expenses: The board or council determine their valuations and generally work through the budget forms or worksheets.
2. Budget Proposal: Counties will file their proposed budget with the county auditor by January 20th, while cities will have proposed budget figures by January 1 and their proposed budgets complete by March 5th.
3. Notice & Public Hearings: Taxpayers must be mailed a notice of the proposed budget public hearing(s), as well as local publication of the notice. Some budgets will require multiple public hearings to ensure maximum public input.
4. Approval & Implementation: City and county budgets must be formally approved and certified by April 30th, county budget

To learn more about the general process for local government budgets, visit the Iowa Department of Management website for each (here's the guide for counties, here's the guide for cities), or get in contact with your local government directly.