Republicans say a new report on state tax revenues aligns with their plans for state finances. Democrats say the report shows the state won’t be able to meet its financial obligations.
The pace of state tax collections has surged this year, but once recently-approved tax cuts take effect July 1, a state panel predicts total state tax revenue will decline by about 0.2%. The following year, the drop is estimated to be in the range of 2.5%. That would be the first time in 12 years that state tax collections have declined.
Democrats like Senate Minority Leader Zach Wahls say it shows the GOP’s tax policy will likely result in future state budget cuts for public schools, law enforcement agencies and Iowa’s health care system. In January, Republican Governor Kim Reynolds said the state would have less to spend after the tax cuts kick in and she’d prefer Iowans spend their money “on businesses rather than bureaucracies.”