Why is Iowa government smaller?

Calls for smaller government carry a number of distortions. Our roads, schools and public health, to name just a few publicly financed services, often operate with the bare minimum financing as it is.

The primary distortion, however, involves concepts about the size of our state government.

Iowans might be surprised to learn that sensible measures indicate Iowa government actually has declined.

Iowa’s General Fund spending as a share of the economy has decreased by more than 26 percent since the early 1990s.

When measured by personal income — all the income generated each year by all Iowans — General Fund spending peaked in Fiscal Year 1997, at 6.4 percent. In FY10, General Fund spending was just 4.7 percent of Iowans’ personal income.

And that is not just a result of the recent Great Recession and the 10 percent across-the-board budget cut by Governor Culver. In FY09, spending as a share of personal income was 5.5 percent — nearly a full percentage point lower than the high-water mark of the late 1990s.

Posted by Andrew Cannon, Research Associate

Author: iowapolicypoints

The Iowa Policy Project is a nonprofit, nonpartisan organization that provides research and analysis to engage Iowans in state policy decisions. We focus on tax and busget issues, the Iowa economy, and energy and environmental policy. By providing a foundation of fact-based, objective research and engaging the public in an informed discussion of policy alternatives, IPP advances effective, accountable and fair government. View all posts by iowapolicypoints