Iowa Constitution Article VII - STATE DEBTS.
Iowa Constitution – Article VII: State Debts
Article VII of the Iowa Constitution addresses the state’s ability to incur and manage debt, with a strong emphasis on limiting indebtedness and maintaining fiscal responsibility.
🔹 Key Provisions of Article VII:
1. General Debt Limitation
Iowa cannot incur debts exceeding $250,000, unless:
The debt is for repelling invasion, suppressing insurrection, or defending the state in war.
Any other debt must be approved by a law and ratified by voters in a general or special election.
2. Purpose and Use of Debt
If debt is incurred, the law must specify:
The purpose of the debt.
A tax sufficient to pay the interest and repay the principal within 20 years.
3. Temporary Borrowing
The state may borrow money to address cash flow shortages, but this must be repaid within the same fiscal year.
4. Credit of the State
The credit of the state may not be given or loaned to any individual, association, or corporation.
Prevents the state from acting as a guarantor for private or corporate debts.
5. Debt for Internal Improvements
Iowa is prohibited from contracting debts for internal improvements (like roads or canals), reinforcing its cautious fiscal policy.
✅ Summary:
Article VII ensures fiscal discipline by placing strict limits on state borrowing, requiring voter approval for significant debt, and prohibiting the use of public credit for private gain. The overall goal is to protect the state from long-term financial liabilities and ensure that debt is only used in exceptional and justified cases.
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