DES MOINES (AP) — Citing growing wages and retail sales, a panel of state budget experts said Thursday that they remain cautiously optimistic that Iowa will see modest revenue growth in the coming fiscal year.
Members of the Revenue Estimating Conference said they expect the state to take in $7.18 billion in the fiscal year that begins July 1. That’s about 6 percent more than the current year. The projection is very slightly less than the amount estimated by the group in December, but the shift is largely due to a change in some state tax collection rules, rather than any economic woes.
“Our estimate is optimistic with just a bit of concern. We see more positives than negatives on the horizon,” said Legislative Services Agency director Holly Lyons, who serves on the three-member panel, along with Department of Management director David Roederer and an independent member, Mason City economist David Underwood.
Under state law, lawmakers must use the March estimate to determine the next fiscal year’s budget, because it came in lower than the December projection. But because there is very little difference, it is unlikely to greatly change what was already expected to be a challenging budget year. Roederer said Gov. Terry Branstad’s roughly $7.3 billion budget proposal will remain the same.
Revenue is made up of personal and corporate income taxes, sales and use taxes and other sources.
The Revenue Estimating Conference was created during budget reforms in the 1990s, and is designed to force the governor, Legislature and an independent economist to all agree on how much the state will collect in taxes and use that as a base for a new state budget.