"We started seeing positive movement last year," and David Roederer, the Chairman of the three-member Iowa Revenue Estimating Conference and the Director of the Iowa Department of Management. "And with the tax cuts and also adjustments in sales tax, we are optimistic."
Roederer has a positive outlook for the future, and says the numbers look good.
"With these numbers, we do not anticipate any budget cuts," said Roederer.
Roederer says Iowa is continuing to see growth, and that growth is even stronger than was first estimated back in March.
"It's really through all of our sectors that we're seeing," said Roederer. "Manufacturing is doing very well, but the federal tax cuts have really spurred a lot of activity, both nationally and internationally."
Revenue is estimated to rise by 4.9% for the current fiscal year, but it's projected to rise by only 1.7% the following year.
Representative Chris Hall of Sioux City, the ranking Democrat on the Iowa House Appropriations Committee, says the overall takeaway for him is that fiscal year 2020 revenue is in peril.
"The Republican passed tax cut of last year is something that`s taken a huge number out of the state`s revenue stream," said Rep. Hall. "When you look at fiscal year '20, the lion's share of those dollars go to corporations and to the top income earners. So, those are dollars that are being taken out of state services, and a growth level left at a perilous 1.7%."
Hall says if there's any dip in the economy, that could force the state to make additional mid-year budget cuts.
"Which is a very big challenge, considering Governor Reynolds has already made three rounds of mid-year budget cuts and borrowed $144 million from our reserve accounts," said Hall.
When reached for comment on the REC, the Governor's Office provided us the following statement:
"The takeaway from this morning’s Revenue Estimating Conference meeting is that Iowa is moving in the right direction. The additional $101 million for 2019 is on top of the $127 million surplus from last fiscal year. This news is positive momentum for an economy that’s growing because of tax reform and increased wages."
We also reached out to Fred Hubbell, Democratic Nominee for Governor, for comment, and he provided the following statement:
“It’s always important to look behind the numbers to understand what’s really going on. Iowans are working overtime, and many are still unable to make ends meet. The revenue estimates released today show exactly what we already knew - the budget is out of control. This year an unexpected surplus followed extreme mid-year budget cuts, and the current tax plan could throw our state into the same chaos next fiscal year. The ongoing trade war has already cost our state upwards of $2 billion, with no end in sight. We need to stop this yo-yo budgeting and create a strong, predictable budget so Iowans can effectively plan for their families, schools and businesses for the long term.”
To see the Revenue Estimating Conference's estimate of general fund receipts as of October 16, 2018, click here.