Corporate income tax payments to the State of Iowa dropped 14 percent last month. Shawn Snyder, a senior analyst with the Legislative Services Agency, says the decline could mean state legislators will have less money to spend next year than previously predicted.
"I do believe that the economy is slowing down and we are seeing that in a much slower growth based on the numbers we’ve seen so far," Snyder says. Last month, a panel of financial experts predicted state tax revenue would grow by one-point-two percent this year.
But October tax collections were down nearly four percent compared to October of 2007, driven largely by that double-digit dip in corporate taxes. Snyder says that decline is a concern, but there’s time to rebound.
"There’s still quite a ways to go for the fiscal year," Snyder says. "This only represents four months so we do have another eight months remaining." In the first quarter of the state budgeting year, state tax collections grew just over one percent.