The State of Iowa has nearly $5.4 billion in unspent tax dollars and the governor’s promising much of it will be the fuel for tax cuts.
The final report on the state fiscal year that ended June 30, 2023 shows the state collected $1.8 billion more in taxes than was spent. Another $900 million is deposited in reserve funds, but the state’s Taxpayer Relief Fund has $2.74 billion in it.
Governor Kim Reynolds, a Republican, said in a written statement that “some see that surplus as government not spending enough, but I view it as an overcollection” of taxes from Iowans. Reynolds has previously said she wants to get rid of the state income tax by the end of her current term as governor. In the written statement issued today, Reynolds said she looks forward to cutting taxes again next legislative session and returning this surplus back to the people of Iowa.
The $1.8 billion budget surplus from the last state fiscal year will be deposited in that Taxpayer Relief Fund in January. The $900 million will stay in the state’s economic emergency fund and cash reserve fund.
Senator Janet Petersen of Des Moines, the top ranking Democrat on the Senate Appropriations Committee, said the governor’s “tax schemes” favor corporations and special interests. “While Governor Reynolds is promising more giveaways to come, middle-class Iowa families still aren’t getting ahead,” Petersen said in a written statement.