(This story was updated at 5:23 p.m. and again at 7:26 p.m.)
The governor’s office and the nonpartisan Legislative Services Agency disagree over the latest data on state tax revenue.
The governor’s office concludes overall state tax collections are up about 1.2 percent, while the Legislative Services Agency analysis concludes tax collections dropped about six percent. It’s a bit of a bookkeeping dispute.
Both agree personal income tax payments to the state fell by about six percent in July of 2009 compared to July of 2008. The difference of opinion is how to explain the nearly 41 percent increase in sales and use tax payments to the state. Dick Oshlo, Governor Culver’s budget director, says it’s a "healthy increase" that may indicate there’s been a turn in the economy.
"Hopefully, it’s reflective of some good news that we’re hearing on the national economy and some reports even on the Midwest states that the recession may be softening and we may see some hope in the future," Oshlo says.
But the Legislative Services Agency notes a one-month bookkeeping change inflates the sales and use tax payments by about $40 million — and that means there was no "healthy increase" in sales taxes. The July, 2008 and July, 2009 numbers were roughly equal in the sales and use tax category according to Jeff Robinson, a senior analyst with the Legislative Services Agency. Robinson says it’s all about determining how many tax dollars legislators have to build the budget.
"The net receipts is what is available to spend," Robinson says. "Gross receipts have to be offset, in our opinion, by the refunds that are issued to come down to the net number that can be spent."
Matt Strawn, the chairman of the Republican Party of Iowa, says the state collected $23 million less in July of 2009 than it did the same month a year ago.
"So either the governor doesn’t understand his own budget or is deliberately misleading Iowans," Strawn says. "Either way, it’s a problem."
House Republican Leader Kraig Paulsen of Hiawatha says there’s no rosy scenario yet.
"The truth of the matter is revenues are continuing to decline right now…it’s obviously bad news, but it’s important that we be straight with Iowans," Paulsen says.
After learning of the statements from Republicans, Culver press secretary Troy Price emailed a response. "This negative and baseless attack is just one more sign that some in the Republican Party like the recession they created so much they don’t want it to end," Price wrote. "The fact is, gross revenues for the State of Iowa have improved, and anyone who has spent two minutes in the public or private sector understands that is a step forward."
Later, when asked, the governor’s press secretary commented on the Legislative Services Agency’s report. "Quite simply, they are wrong," Price said.
