Governor Terry Branstad says the next state budget plan he’ll begin drafting soon must be “very frugal.” The current state budgeting year began July 1st and a panel of state financial experts has signalled state tax collections are $121 million lower than expectations. Branstad says the lagging farm economy is the main reason.
“Commodity prices for corn and soybeans are not good and we went through the bird flu issue and that’s created some challenges for agriculture,” Branstad says. “But we’ve had a very good harvest and hopefully the December revenue estimate will be a little better than October.”
Branstad must base his budget plan for the next fiscal year on the estimate of state tax revenue that’s issued by a panel of experts in December. The governor expects the prediction will indicate tax revenue will be higher next year, but perhaps not grow as robustly as experts thought this past spring.
“I think we can live with that and not make significant cuts,” Branstad says, “but we’re going to have to be very frugal and very careful to manage our resources wisely.”
Branstad and legislators have promised increased spending next year on teacher mentoring programs as well as an increase in payments to local governments to replace reduced commercial property tax revenue. To keep those commitments, there may be reduced spending in other areas. In the current budgeting year, the State of Iowa is still expected to see a three-point-four percent increase in the amount of taxes Iowans pay.
(Reporting by Dennis Morrice, KLEM, Le Mars; additional reporting by Radio Iowa’s O. Kay Henderson)