Members of the Revenue Estimating Conference meet. (RI photo)
A panel of financial experts has raised its prediction of state tax revenues for the current state budgeting year and is predicting tax collections will grow one-point-seven percent in the next fiscal year, which starts July 1.
David Underwood, a CPA from Clear Lake, said the pandemic is the biggest uncertainty in the economy.
“We’re, unfortunately, still worried about variants on the Covid,” Underwood said. “A year ago, we thought: ‘Oh, boy. We’re going to get the vaccine and that’s going to take care of our problems.'”
Underwood is one of three members of the state’s Revenue Estimating Conference. Kraig Paulsen, director of the Iowa Department of Revenue and acting director of the Iowa Department of Management, is another member of the group.
“Current revenues continue to be strong. Sales and use tax receipts continue to show strength,” Paulsen said. “…Demand continues to be strong in both consumer and business spending. I see no indication of this slowing anytime soon.”
Paulsen, though, said the number of Iowans working continues to lag and there are far more job openings than people actively looking for work. Holly Lyons of the Legislative Services Agency is also a member of the state Revenue Estimating Conference. Lyons cited “headwinds” facing the economy as the group reviewed tax receipts through November 30.
“These include uncertainty about inflation, the persistent Iowa labor shortage and slow employment growth we mention each time we meet,” Lyon said, “and the unknown impact of the omicron variant and future variants of Covid-19.”
The group predicts tax receipts in the current fiscal year will rise three percent and the so-called Taxpayer Relief Fund will grow to more than $2 billion.