DES MOINES, Iowa (AP) - A panel of Iowa budget experts said Friday said that expect higher state revenue this year than forecast in December and they remained cautious about predicting a quick recovery.
The Revenue Estimating Conference increased the current year estimate of revenue to $8.07 billion or 1.9% growth from the previous year. That is up from the December estimate of 0.5% growth and $7.96 billion in revenue.
For next year, the panel estimated state revenue would increase 3.8% to $8.38 billion, and 4.5% to $8.72 billion in 2023.
Holly Lyons, the fiscal services director at the Iowa Legislative Services Agency, said Iowa lost 117,000 jobs in the 12 months after January 2020. Over the past three months, the state has added just 6,400 jobs, indicating a long road to job recovery.
“Job growth must accelerate if the situation is going to improve quickly,” she said. If it doesn’t, there’s a danger the economy could falter in the second half of 2021 or early 2022, she said.
Iowa Gov. Kim Reynolds’ appointee to the board, Michael Bousselot, was more optimistic, calling the state’s economy persistent and resilient. He said rising crop prices should boost the farm economy in a state that is a leader in corn, soybean, pig and egg production.
If the estimated 3.8% growth for the 2022 fiscal year is realized, tax cuts approved in 2018 will not kick in. That’s because legislators required at least 4% revenue growth in 2022 before the lowering of tax brackets for many individuals in 2023.
Reynolds supports removing the triggers and the Senate has voted to do so, but House Speaker Pat Grassley has said some of his members are uneasy about such a move. The triggers were intended to avoid reducing state tax revenue if the economy wasn’t strong.
Reynold released a statement Friday calling for House action, stating, “I was pleased that the Senate voted unanimously to remove these triggers and look forward to signing the final bill making these significant tax cuts a reality for Iowans.”
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