Rep. Steckman: State revenue to grow by $291 million next year

From Rep. Sharon Steckman –

A non-partisan panel of state budget experts said state revenues will rise by 4% next year, which is just over $281 million.

The Revenue Estimating Conference (REC) expects the state budget in fiscal year 2017 (FY) to be $7.327 billion. That budget estimate will be used by lawmakers during the 2016 legislative session to craft a state budget for 2017.

The estimate for 2017 is slightly down from an earlier projection and includes a $35 million reduction in sales and use tax revenues due to an administrative rule change used by the Governor earlier this year when he couldn’t get approval for his plan by the Legislature last session.

The REC also updated their projection for the current fiscal year (2016) to $7.055 billion, which represents 3% growth over last year. The Legislature approved a balanced budget last session for FY 2016 and the state is expected to end the year on June 30th with a surplus of $257 million, in addition to the full reserve funds of $718 million.

Concerns about the farm economy, as well as concerns about the national budget were enough to make the REC be cautious in their growth predictions. They did report that Iowa’s unemployment rate continues to show good economic conditions.

Under Iowa’s spending limitation law, the Legislature and the Governor must use the revenue estimate from the December REC meeting in crafting the FY 2017 budget. However, if the estimate is lowered when they meet again in March, the Governor and the Legislature must use the lower revenue estimate in crafting the budget.