A panel of economic experts today said the economic slowdown hasn’t hit Iowa yet, and predicts state tax receipts will grow at a faster rate then they predicted in December. The group know as the "Revenue Estimating Conference," predicts tax receipts will grow by 7.4% in this fiscal year, up from their prediction of 6% growth in December.
Legislative Services Agency director Dennis Prouty, says trying to figure when the economic slowdown will hit Iowa is hard. "The corner for the downturn hasn’t reached us like we thought it was going to in December," Prouty says.
Conference member David Underwood, a businessman from Mason City. Underwood says the growth is sustaining longer in Iowa than he expected. "On the wages, the income tax reporting that has been done so far is a little bit stronger than I might have thought," he says, "the farm income has been very strong this year." Underwood called the growth "astonishing".
"That’s been, you know, great for Iowa, people are employed, they’re getting paid more money, and I think that’s, that’s been showing up in why the receipts have been so strong," Underwood said.
Robust personal income taxes and sales and use taxes are expected to push state tax receipts up to 130 million dollars more than projected in December. Growth for the following year is projected to slow to two-percent. House Majority leader Kevin McCarthy predicted Democrats will use the extra money to plug some budget holes, but vowed to proceed cautiously and not use the higher revenues as a piggy bank.