Dec. 15–State revenue forecasters on Thursday revised their estimates for tax collections up slightly through June 2013, meaning Gov. Terry Branstad and state lawmakers will have about $250 million in new money to commit for budget priorities that include revamping the mental health financing system and providing relief to commercial and other classes of property next session.
“The estimate today solidifies the fact that we can fulfill the commitments that were made last year,” said Rep. Scott Raecker, R-Urbandale, chairman of the House Appropriations Committee, after the state Revenue Estimating Conference voted 3-0 to boost their state tax collection projections upward by about $40 million over the next 18 months.
“There is some modest revenue growth,” he added. “I am confident that we will find ways to fund the priority initiatives for Iowans.”
The REC revisions pegged growth in net receipts and transfers at slightly more than $6 billion for the current fiscal year, an increase of 1.7 percent. For fiscal 2012, the three-member panel put the figure at nearly $6.252 million, which would represent a 4.2 percent increase.
Last year, that total was $5.899 billion.
REC Chairman David Roederer, who is Branstad’s budget director and head of the state Department of Management, said the revised figures represented an expectation of stable, slight growth for the rest of the current fiscal year.
“I just don’t think things will turn nationally to make a big difference,” he said. “Long term, I’m still optimistic. I think at some point in time we’ll see a bigger growth but we’re not there yet.”
REC member Holly Lyons of the nonpartisan Legislative Services Agency called the Iowa economy “unremarkable” since the panel last met in October. She said the bright side was that Iowa’s economy had not slid back into recession but she said the static growth may have delayed some state expansion.
“While U.S. employment is increasing, it’s not accelerating and the number of people who are unemployed or underemployed looks like it will remain uncomfortably high for an extended period,” Lyons said. For Iowa, she said, the employment situation has been mixed with the jobs being added paying lower wages and offering reduced hours.
“I’d like to remain hopeful that the recovery is indeed gaining momentum,” Lyons said. However, she said she expected revenue growth to be small but positive through fiscal 2013.
REC member David Underwood of Mason City said it appears the world economy is “softening” and the impact may actually hurt Iowa agricultural exports and manufacturing, which made him “a little more pessimistic” compared to October.
The REC’s December estimates are the revenue projections that the governor and Legislature must use for budgeting purposes under the state’s 99 percent spending limitation law.
(c)2011 The Gazette (Cedar Rapids, Iowa)