The state’s budget is officially worse today. A three-member panel of financial experts this morning reduced their estimate of state tax collections by 157-and-a-half million dollars. Department of Management director Cynthia Eisenhauer says that means MORE state budget cuts are needed for this budgeting year. She says it’s pretty evident from the national economy that there’s been an economic downturn everywhere.
Personal income taxes are the single largest source of taxes for the state, and Legislative Fiscal Bureau director Dennis Prouty says tough times are reflected in state income tax receipts. He says when they start seeing layoffs and less overtime, there are less taxes paid to the state.
David Underwood of Mason City, the third member of the state’s Revenue Estimating Conference, is worried things will turn out even worse than their estimates. Underwood says noone knows for sure what’s going to happen with the economy, he says though almost everyone agrees the state is in a recession.
Governor Vilsack met by telephone with legislative leaders this afternoon He’s scheduled a four o’clock news conference to talk about additional budget cuts, on top of the 108 million dollars worth he ordered September 20th.