These revenue estimates continue to show Iowa's exceptional fiscal strength and that the state is well-positioned to deliver the generational tax cuts enacted by the Governor and Legislature.
The State Revenue Estimating Conference (REC) met today at the Capitol for their October meeting to issue revenue estimates for the coming two fiscal years. The REC estimate set general fund receipts for the coming fiscal year (FY 2023) of $9,534.1 million. This estimate was an increase of $500 million over the previous REC estimate in March.
The REC also issued its first estimate for the following year (FY 2024) of $9,594.3 million. While both estimates reflect only modest growth in net receipts, these estimates also factor in the phase-in of the 2022 income tax bill, which carries a reduction in revenue for the state income tax and the state inheritance tax. Despite that, the state budget remains in an excellent position.
REC members acknowledged the significant challenges with inflation and workforce yet remained optimistic about Iowa’s overall economic strength. This REC forecast indicates ongoing growth in Iowa despite the challenges we face in dealing with Biden's economy.
“As Washington’s inflationary, tax-and-spend policies weigh down the national economy, Iowa is showing there’s a better way,” said Governor Kim Reynolds. “Today’s projections confirm once again that Iowa’s competitive tax code is fully compatible with sustainable revenue and a resilient budget. Going forward, we’ll continue to exercise restraint with taxpayer dollars while prioritizing high-return investments in key priorities.”
Bottom line: These revenue estimates continue to show Iowa's exceptional fiscal strength. Not only is the state well-positioned to deliver the generational tax cuts enacted by the Governor and Legislature, but Iowa is also still projected to generate upwards of two billion dollars in additional surplus revenue in FY 23 and FY24.