By O. Kay Henderson (Radio Iowa)
The state panel that estimates how much tax revenue the state will collect has elevated the predictions it made this spring.
Revenue Estimating Conference Chairman Kraig Paulsen, the governor’s budget director, said there was a 6% increase in state tax receipts in July, August and September compared to the same months a year ago. “Even with the state’s September downtick in total employment, Iowa’s unemployment remains steady,” Paulsen said, “with historically low unemployment claims and record employment in health care and construction.”
The revenue estimators now predict state tax receipts will grow by 2.8% during the state’s current fiscal year, which ends on June 30. That’s about $60 million above the group’s estimate in March. Conference member Jeff Plagge, the former Iowa Banking Superintendent, said despite weather challenges and elevated diesel prices, yield reports for the fall harvest have generally been encouraging. “When you boil it down, uncertainty remains the common theme,” Plagge said. “Interestingly, though, bankers that I’ve talk seem to be more concerned about the national economic issues and international unrest than conditions in Iowa or in their local communities.”
Jennifer Acton, head of the fiscal division of the Legislative Services Agency, is the other member of the Revenue Estimating Conference. Acton said increased borrowing costs for businesses and consumers and the uncertainty about fuel prices are concerns. “Despite economic growth in Iowa and nationally, potential downsides lurk on the horizon,” she said. “…Job growth has slowed, with Iowa’s seasonally adjusted non-farm employment by 700 jobs over the past year through August and has decreased by 18,000 jobs since the high mark of May, 2024.”
Acton and the other two members of the Revenue Estimating Conference predict the state will collect just over $8.8 billion in taxes during the next budgeting year that starts July 1. The next governor and the legislature will start drawing up the plans for that budget in January.
