(Radio Iowa) – State Auditor Rob Sand — a Democrat who’s running for governor — says the state income tax cuts Republican lawmakers have approved mean hard decisions are ahead when it comes to the state budget. “The reserves that we have can cover these structural deficits that they’ve created for a few years,” Sand said, “and then it’s going to get very ugly.” The state’s current nine-point-four BILLION dollar budget plan includes 900 million dollars worth of withdrawals from reserve funds. Sand says the Republican-led legislature did the politically popular thing of cutting income taxes, but didn’t do the responsible thing of making the budget balance. “They haven’t figured that out yet,” Sand said. “Hopefully they’ll get a little bit closer this year.”

Republicans say they designed state reserve accounts to cover initial losses, but expect tax cuts to spur economic growth that will ultimately lead to more state tax revenue. In January, the state income tax dropped to three-point-eight percent. A recent report shows Iowa income tax collections fell 18-point-six percent in July and August compared to the same month a year ago. Sand says the steps to deal with that decline will be unpopular. “They have done what I would call a ‘fiscal time bomb,'” Sand said. “They lit the fuse by passing a bunch of tax cuts that sound great, but they haven’t done the responsible thing of either figuring out, ‘O.K., well how are we going to either going to cut spending and where — is it going to come from education or public safety — or is it going to come from increasing revenue?’ They’re going to have to figure that out.”

And Sand, one of the candidates running to succeed Republican Governor Kim Reynolds, says the state’s next governor may face a difficult budget situation. “You don’t sign up to do public service because you think it’s going to be fun the whole time,” Sand said. “You do it because you think it’s the right thing to do and you need serious people to make serious decisions.” Sand is campaigning today (Wednesday) in western Iowa. Governor Reynolds, whose term doesn’t end for 16 months, has indicated property tax cuts will be her priority during the 2026 legislative session.