Iowa lawmakers are facing a nearly $100 million shortfall in the current budget year as they prepare to convene the 2017 session.
A state panel on Monday projected the state will take in about $7.21 billion during the budget year that began in July. That’s down from a $7.31 billion projection in October. Iowa Department of Management Director David Roederer isn’t sure how the state will plug the deficit.
“I think it’s a little premature to say quite yet what we will be doing, but we’re exploring various options,” Roederer said. “The governor will be making a recommendation in January as to what we should be doing.” Roederer is one of the three members on the state’s Revenue Estimating Conference (REC), which lowered Iowa’s revenue projections on Monday.
“I don’t want, in any way, to underestimate what the challenge will be when you cut 100 million dollars out of the existing budget,” Roederer said. “That will be a real challenge.” The REC also lowered its estimate for the next fiscal year by over 60 million dollars. Budget experts say the Iowa economy is growing, but weakness in the farm sector continues to push tax receipts down.
(Thanks to Joyce Russell, Iowa Public Radio)
Legislative leaders released statements in reaction to the REC news:
Senate Majority Leader Bill Dix (Republican, Shell Rock):
“The announcement by the Revenue Estimating Conference today underscores the need for economic growth and reform in state government. Senate Republicans are committed to implementing pro-growth policies which will provide confidence to job creators and reform government to protect the taxpayers. These policies will put Iowa on a strong path to address the current budget situation. Senate Republicans look forward to working with the House Republicans and the governor to develop policies to address the state budget in the coming months.”
Representative Chris Hall (Democrat, Sioux City), Ranking Member of House Appropriations Committee:
“The Branstad/Reynolds Administration and House Republicans have put the state budget $135 million in the red and stalled the state’s economy. It’s clear their unsustainable tax giveaways to out-of-state corporations have not produced good jobs, skilled workers, rising incomes for hard-working Iowans, or a stronger economy like they promised. I hope Republicans and Lt. Governor Reynolds will heed the warning from our non-partisan budget experts. We must recognize that shortchanging schools again to make way for massive corporate tax giveaways will not help working families or grow Iowa’s economy. House Democrats will work next session to balance the state budget while investing in education and job training to build a strong economy for all Iowans.”