DES MOINES, Iowa (KCRG) – State Auditor Rob Sand has released a warning regarding Iowa’s current and future fiscal challenges. In his warning, Sand referred to Iowa’s finances as a “fiscal time bomb”. “It’s only a matter of time before the fuse runs out and Iowans get burned by years of poor management of their tax dollars,” said Sand. “Declining revenue, increased spending, and an over-reliance on one-time federal funds are setting the stage for a fiscal crisis in our state.”

The state is experiencing a significant decline in revenue, which is expected to continue into fiscal year 2026. Governor Kim Reynolds has also proposed a $9.4 billion budget. The combination of declining revenue and the Governor’s proposed budget will “usher in a deficit of more than $900 million in fiscal year 2026 alone”, according to a press release from Sand.

(Screenshot) State Auditor Rob Sand (YouTube press release)

The release also claims that “projected perpetual annual deficits into the next decade will severely drain the state’s Taxpayer Relief Fund and set the stage for a budget shortfall not seen this century.” Iowa currently has $3.75 billion in the Taxpayer Relief Fund, as well as a $961 million reserve fund. The Taxpayer Relief Fund is built up from budget surplus meant to lower taxes.

“Politicians who voted to increase spending while giving tax cuts to people who don’t need the money, intend to use the Taxpayer Relief Fund for political relief,” said Sand. “They want to use it to shield themselves from the fiscal fallout of this time bomb while everyday Iowans feel the heat.”

To view Sand’s full advisory, watch his video on the State Auditor YouTube page.