Based on the state’s receipts when Iowa’s fiscal year ended on June 30 it appears likely that the Iowa Legislature will need to be called into a special session in order to balance the budget.
The Iowa Legislative Services Agency issued a report that shows the state’s revenue is $104.4 million below projected revenue set by the Revenue Estimating Conference set on March 14, 2017.
The state constitution requires Iowa to have a balanced budget and the fiscal year ended June 30. The FY2017 budget, based on higher projected revenue, requires action to be taken to see that Iowa closes the year in the black.
With payments still due to the state before the fiscal year closed and with any unspent funds from different state agencies and departments, that gap may yet still decrease. State officials have until September 30 to close the books on the fiscal year.
Iowa Governor Kim Reynolds indicated during her press conference on June 13th that she will use money from the Economic Emergency Fund to help cover the budget deficit. She can legally transfer up to $50 million without legislative approval. If the budget gap exceeds $50 million, she will have to call the Iowa Legislature to a special session for approval to transfer more.
During the last legislative session, former Governor Terry Branstad used $131 million from the fund, and the legislature cut $118 million from the budget to help close the gap.
Personal income and corporate tax revenue showed significant growth compared to FY2016 at 2.6 and 5.6 percent respectfully. Sales tax revenue showed only one-tenth of a percent increase compared to FY2016 which was significantly lower than expected.
HT: O. Kay Henderson