A three-member panel of financial experts has increased its estimate of state tax receipts in the current budgeting year by nearly $360 million.
The Revenue Estimating Conference predicts tax growth this year will be 4.9 percent, but in the following year it will be 1.7 percent as the GOP crafted tax cuts will fully kick in then.
Governor Kim Reynolds said the report shows the Iowa economy is growing.
“That’s on top of the $127 million surplus that we have and I think that’s reflective of an economy that’s growth because of the tax cuts we’ve seen at the federal level and when ours (at the state level) are implemented, I think we’re going to continue to see growth,” Reynolds told reporters from Radio Iowa and The Cedar Rapids Gazette. “…I think it’s positive momentum. I think it’s really good news.”
Key Democrats in the legislature say the state’s finances are headed for a “slow motion train wreck.” They point to the projection of narrow, 1.7 percent growth in state tax collections and warn state budget cuts are coming, especially if the Republicans’ state tax cuts take effect, the trade war with China continues and the financial fortunes of Iowa farmers worsen.
A key Republican in the legislature says the State of Iowa is in a “strong financial position” and Democrats are putting a “negative spin” on today’s state tax revenue forecast.