State tax collections in the last quarter were double what experts have predicted for the year. In July, August and September, state tax receipts were 8.7% ahead of the same three months last year. Dennis Prouty of the Legislative Services Agency released the report on state tax collections.
"They’re a little stronger and a little higher than I thought they would be," he says. The amount of personal income taxes paid into the state over the past three months rose by nearly nine percent compared to the same quarter last year. "That’s a little surprising," Prouty says.
A cautionary note, though, comes when analyzing state sales taxes, which grew just under two percent for the quarter. Prouty says it may be that Iowans aren’t purchasing as many big ticket items like appliances and furniture because the housing market has slowed.
The state’s cigarette tax haul has increased due to the buck-a-pack hike in the state tax on cigarettes and the statistics indicate there’s been no decrease in sales. In April, a state panel of financial experts — including Prouty — predicted state tax collections will grow by about four-point-two percent this fiscal year. That would equal an increase of just over 260-million dollars in extra state tax collections this year compared to last.