For years, Iowans for Tax Relief Foundation has warned that Iowa’s growing reliance on Washington’s money would come with consequences. When the flow of federal dollars slows or stops, programs stall, services falter, and state budgets are left to pick up the pieces. Those warnings have proved correct. From federal policy changes in President Donald Trump’s One Big Beautiful Bill to the current government shutdown, Iowa is learning what happens when dependence replaces discipline.
The shutdown has revealed just how deep that reliance runs. Across Iowa, services tied to federal programs are feeling the squeeze. State officials report delays in payments and uncertainty about how long SNAP and WIC benefits can continue without new appropriations. Temporary Assistance for Needy Families funds are frozen, forcing Iowa to rely on prior-year balances. Even environmental and food-safety inspections have slowed as federal staff are furloughed—not to mention layoffs of federally paid workers in state agencies.
Even as Congress argues over cuts, Washington is tightening its grip. Federal support increasingly comes with conditions—rules, reporting requirements, and cost shifts that leave states carrying more of the burden.
The One Big Beautiful Bill—which extended and expanded the Tax Cuts and Jobs Act—achieved some of its goals by shifting costs onto the states. It added new funding requirements that may force Iowa to pay a larger share of programs like SNAP. As the state assumes more of these costs just to maintain existing services, that burden grows—crowding out priorities such as public safety, infrastructure, and tax relief.
None of this should surprise anyone. Iowa receives about $13 billion a year from Washington—more than the entire $9.4 billion state budget. That imbalance leaves us vulnerable to every congressional fight or agency directive. When Washington sneezes, Des Moines catches a cold.
This is not how federalism was meant to work. Under the Constitution, states were to govern most domestic affairs, using federal aid only for exceptional needs. But decades of policy drift—from the New Deal to the Great Society—have eroded that balance. Federal money now touches nearly every state and local budget line, bringing red tape and obligations that persist long after the checks stop arriving.
The answer isn’t to hope Congress behaves responsibly. Iowa must act to protect itself.
Lawmakers should pass the Iowa Fiscal Independence Act when they return to Des Moines in January. The Act includes three core provisions:
Transparency: Inventory every stream of federal funding—what programs it supports, which agencies administer it, and what matching or maintenance-of-effort requirements come with it. Without this accounting, taxpayers and legislators can’t assess the risks.Disclosure: Require state agencies to publish all federal guidance dictating how funds are used. Too often, Washington’s suggestions are treated as binding law. Public disclosure would show where federal influence begins—and where Iowa could reclaim authority.Oversight: Require legislative review for all federal matching funds and long-term commitments. When Iowa agrees to a match, it pledges future tax dollars—sometimes for decades. Those decisions deserve the same scrutiny as any other appropriation.
These steps won’t end federal reliance overnight, but they are an essential start. By exposing the scope of federal influence and demanding accountability, Iowa can rebuild the independence that federalism was meant to protect.
“Free money” from Washington always comes with strings attached. As federal spending spirals and politics grow more volatile, Iowa can no longer stake its stability on promises from D.C.
True fiscal strength means standing on our own two feet—by knowing where every federal dollar goes, demanding transparency, and reasserting control within our own borders.
The Iowa Fiscal Independence Act is the path toward lasting autonomy, responsible government, and a stronger future for Iowa taxpayers.
