Another state budget dilemma for the Governor and legislators as new data puts last year’s budget in the red — by over 60 million dollars. The state fiscal year ended June 30th, but the books were held open ’til the end of August because some taxes weren’t yet paid. State financial experts predicted how much taxes would be paid during that “hold-over” period, but they were way off and now Governor Tom Vilsack and legislators have to decide how to fix a 62 million dollar hole. In a prepared statement, Vilsack said there’s enough money in reserve to cover it, but lawmakers may have to come back in a special session to make the transfer. Governor Vilsack has told all his agency directors to hold off on discretionary spending, and he’s expressed displeasure with the three-member board that guesses at how much state tax revenue will be collected. He’s asked that Revenue Estimating Conference to reconvene immediately to review all its guesses, since This year’s state budget is based on those predictions. Michael Ralston, director of the Iowa Department of Revenue, says his staff reviewed the tax receipts, and found corporate taxes, individual income taxes and sales and use taxes were not as much as had been predicted. Ralston says tax collections were down across the board, and while the country’s supposed to be in the midst of a recovery, the tax data doesn’t show that. Ralston says tax receipts are a pretty good economic indicator, and the facts show “the economy was still soft” in April, May and June.
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