The Iowa Department of Management released the October Revenue Estimating Conference (REC) report on Tuesday that projects state revenue will grow by five percent in FY19 and then slow to 2 percent growth in FY 20 when the initial tax cuts in the tax reform bill passed in the last legislative session are in full effect.
These projections follow a year of revenue growth as Iowa took in 5.2 percent more revenue than it did in FY 17 with total receipts over $8.52 billion. Compared to FY 17 Iowa collected 6.2 percent more in personal income tax, 4.6 percent more in sales/use tax, and 2.8 percent more in corporate income tax in FY 18.
The October REC project the total revenue receipts in FY 19 will be $8.95 billion with a 3.8 percent increase in income tax receipts, 6.6 percent increase in sales/use tax receipts, and 8.6 percent increase in corporate income tax receipts.
The October REC projects total revenue receipts in FY 20 to be slightly more than $9.13 billion with a two percent drop in personal income tax, an eight percent increase in sales/use tax revenue with Iowa collecting taxes on internet sales, and a 4.1 percent increase in corporate income tax revenue.
“Our responsible budgeting and leadership have put Iowa in a strong fiscal position,” Iowa House Appropriations Committee Chair Pat Grassley (R-New Hartford) said. “Investment in Iowa schools is at an all-time high and Iowan’s wages are growing. We have put more resources into priorities that Iowans care about like job training, health care, and public safety. Our reserve accounts are full and we have a healthy budget surplus.”
He added that the projection shows the state will have sufficient revenue to fund priorities in
“I am sure that Democrats will resort to their usual negative spin and try to find a way to tell Iowans that this is bad news. The reality is that there is never enough money for Democrats to spend,” Grassley added. “House Republicans will continue to budget in a fiscally responsible way that funds the priorities of Iowans and lives within the state’s means.”
“The news from the Revenue Estimating Conference (Tuesday) was another indicator showing how Senate Republican policies over the past two years have helped to make Iowa an even better place to live. Our tax cuts are working, our reserves are full, we are seeing an increased budget surplus, and our economy is growing,” Senate Majority Leader Jack Whitver (R-Ankeny) stated.
“Our state fiscal house is in order and Iowans can count on Senate Republicans to continue sound budgeting practices to invest in education, health care, public safety and lower taxes,” he added.