A new report on the state’s finances seems to indicate Republican Governor Kim Reynolds not only will be forced to dip into savings, but she may have to call legislators back this fall to balance the state budget.

The last state fiscal year ended Friday, June 30. The Legislative Services Agency report indicates state tax collections during the past 12 months were below expectations by more than $104 million. The state budget was based on the higher projections, so steps must be taken to ensure the budget winds up in the black this fall when the books are formally closed on fiscal year 2017.

Jeff Robinson, a senior fiscal analyst with the Legislative Services Agency, said the state did collect more in taxes in June.

“But it wasn’t as positive as needed to keep up with the estimate,” Robinson said.

Iowa governors have the authority to transfer up to $50 million from the state’s “Economic Emergency Fund” to cover a deficit. Some payments due the state during the just-concluded fiscal year have not been made, though, and there’s the possibility some agencies have unspent funds that will boost the bottom line as well. However, if the deficit is larger than $50 million when all calculations are completed in September, the governor will be forced to call the legislature back into special session to withdraw more money from reserve accounts to put the budget in the black.

The state constitution requires a balanced state budget.

State tax projections were way off because sales tax payments were significantly lower than expected. Robinson said the state did see growth in corporate income taxes as well as personal income tax payments to the state.

“But sales tax was essentially flat year-over-year,” Robinson said. “We got $1.7 million worth of sales tax growth over those 12 months, so that was a surprise and that caused the shortfall this year.”

The governor’s budget chief confirms the state has a budget dilemma for the fiscal year that ended last Friday, June 30, but Iowa Department of Management director Dave Roderer’s  calculations indicate the state’s “cash receipts” for the past 12 months fell $76 million below projections.

“Tthere’s still a lot of checking that needs to be done before we will know for certain how the fiscal year has ended,” Roederer said.

Roederer’s analysis is based on “cash receipts” and, for example, does not include estimates of any outstanding tax refunds the state must pay. The Legislative Services Agency report is based on “total net receipts.”  Roederer said Reynolds “could very well” be able to manage the budget problem on her own, without calling legislators back for a special session this fall.

Democrats in the legislature say the situation shows Republican budget policy is “out of whack” because of too many tax “give-aways.”

(This post was updated at 4:20 p.m. with additional information.)