A panel reviewing the state’s tax receipts has concluded there’s a very slow economic recovery ahead and the group is predicting state tax revenue in the current fiscal year will grow by just half-a-percent.
However, the Revenue Estimating Conference predicts state tax collections will expand by 3.7% in the budgeting year that begins July 1.
“I think all of us will be glad to see the year 2020 behind us, but this year more than ever, it’s hard to look ahead to the next year with any clarity,” said Holly Lyons of the Legislative Services Agency, one of the three members of the panel, at this afternoon’s meeting.
The current state fiscal year ends June 30. The group’s tax collection prediction for the next fiscal year is nearly $300 million. Iowa Department of Management director Dave Roederer said the big question is whether the wide distribution of Covid vaccine will “stoke” the economy.
“Do we need economists or do we need psychiatrists to really help us determine what is going to happen?” Roederer asked.
Roederer said the economy won’t start growing until people believe the pandemic is coming to an end and they start spending their money on goods and services again. The Revenue Estimating Conference predicts the State of Iowa will collect $8.265 billion in the next budgeting year. That total is what the governor will use as the basis for the state spending plan she’ll present to legislators in January.