Another gloomy snapshot of Iowa’s economy: a Legislative Services Agency report shows state tax receipts were down significantly in September.
“This report shows a really poor month. There was really no good news in September. Gross receipts for the month were down 10 percent. On a net basis, after we take into consideration refunds, it was down 19.2 percent,” said Jeff Robinson, a senior analyst for the Legislative Services Agency. “It’s tough to find a month in the last 20 years that would be as negative as September was this year.”
Robinson has reviewed state tax records from the last recession and found even then, personal income tax payments to the state increased slightly from month to month. That’s not the case in this recession. This August, for example, there was a 3.2 percent increase in Iowa unemployment compared August of 2008.
“Hours worked are down and the average wage does not appear to be increasing like it did in the past. Even though in the 2000 recession, you were seeing layoffs, you were seeing maybe even the work week reduced, but people were still getting increases — as a group,” Robinson said during an interview with Radio Iowa. “That does not appear to be happening this time.”
Personal income tax payments to the State of Iowa dropped 4.5 percent in the last quarter. Corporate tax payments were down 27.5 percent in July, August and September. Just two of the taxes the state collects — from those who buy tobacco products and from those who run franchises — increased in the just-concluded quarter.
“The rest of them are down rather noticably and that’s, to me, the big issue — that everything has gone down,” Robinson said.
And while national reports indicate consumer confidence is rebounding, that does not appear to be the case in Iowa as state sales tax collections are down.
“September sales and use (tax) gross receipts were down almost eight percent — 7.8 percent in Iowa,” Robinson says, “so I don’t see this sales and use tax number as a positive at all.”
Read Robinson’s analysis and see the graphs which chart Iowa’s tax revenue.