State budget experts are predicting Iowa will end the fiscal year with a surplus of as much as 50 million dollars. A three-member budget panel is forecasting just under one-percent growth in state tax collections for fiscal year 2005. Dennis Prouty, the director of the Legislative Services Agency, credits the boost to changes in the state and federal tax laws. Prouty says employment is up and so are sales tax revenues, and though rising oil prices brought fears that gas hikes would reduce Iowans’ disposable income, it seems to have leveled off at least for now. The prediction from Prouty and the other three members of the state’s Tax-Revenue Estimating Conference means that if the economy maintains its current momentum, state government could wind up with a surplus next July. Prouty says the Legislature could choose to spend that extra money when they begin their next session in January. But David Underwood, a C-P-A from Mason City who serves on the state tax guessing group, recommends leaving that money alone – just in case tax refunds are bigger than expected next April. Underwood says the state doesn’t necessarily have to spend everything it brings in and now is the time to rebuild the state’s nearly-depleted cash reserve. Senate Republican Leader Stewart Iverson doubts there’ll be a rush to spend whatever surplus materializes. Iverson says legislators will be “prudent.” Iverson’s more optimistic about the budget’s panels estimates for 2006, which predict state revenue will grow by one-hundred-30 million dollars. But Iverson says most of that money is already promised to education. Iverson says 139-Million sounds like a lot, but when 100-Million’s already committed to K-12 education, “it doesn’t leave a whole lot left,” and he says lawmakers will still face some challenges in the next budget year. Senator Iverson says all in all, though, the state is moving in the right direction.
