State tax revenue prediction raised $33 million for current year

REC members David Underwood of Clear Lake, as well as Dave Roederer and Holly Lyons

DES MOINES — Legislators considering mid-year cuts to the state budget have a new figure to consider. The panel of financial experts who set the official estimate of state tax collections is predicting 33 million more dollars will flow into the state treasury in the current budgeting year.

“We’re feeling more comfortable with what the impact the federal tax cuts are having, at least in Iowa,” said Dave Roederer, the governor’s budget director who is also a member of the panel that made Friday’s revised state tax estimate.

Roederer is reluctant to say how policymaker should react to Friday’s news.

“There still needs to be some reductions in funding,” Roederer told reporters after the meeting. “It’s what the comfortable level will be for the governor and the legislature.”

Roederer suggested the debate will now shift to how much of a “cushion” in the state budget legislators and the governor decide may be necessary. While $33 million is expected to flow into the state treasury, if no cuts are made, the current state budgeting plan would see nearly all of that spent by June 30. That’s the final day of the current fiscal year.

Republican lawmakers have indicated making sure there’s several million dollars extra in the budget plan is a priority. That money could cover any shortfall if state tax collections fall short of expectations. That’s what happened last summer, forcing the governor to dip into the state surplus to cover a deficit.

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