DES MOINES – Iowa lawmakers got an affirmation Thursday from revenue estimators that they will have a significant amount of new state money for budgeting purposes, but the problem is they already have committed a lot of it to increased spending for tax relief, education and health care costs.
“Now the challenge comes to put the big jigsaw puzzle together,” said Rep. Chuck Soderberg, R-LeMars, chairman of the House Appropriations Committee, after the Iowa Revenue Estimating Conference projected state tax collections to grow by about $300 million for the fiscal 2015 budget year.
That projection of $6.983 billion in tax receipts for the next fiscal year is somewhat deceptive because lawmakers took action last session to divert about $180 million in general fund revenue from gaming and tobacco activities to fund programs for workforce skill development and health-related programs.
“It appears that the 2014 session of the Iowa Legislature will have enough resources to balance the state budget, boost job-creation efforts, and invest in middle class families,” said Sen. Bob Dvorsky, D-Coralville, chairman of the Senate Appropriations Committee.
However, budget officials note that the 2013 session produced multi-year commitments to reduce property tax burdens, increase spending for K-12 schools and new education reforms and increasing state obligations for Medicaid areas that top $400 million.
“All of those built-in future increases are there without doing anything new,” said Senate GOP Leader Bill Dix of Shell Rock. “As I look at the projected revenues, I think we need to be very cautious about new spending and if there are new priorities, we’re going to have to find savings in other areas to make that happen.”
In paring back growth projections for the current fiscal year and assessing the outlook for fiscal 2015, members of the revenue estimating panel said the looked for modest growth due to some concerns over the future of the federal renewable fuel standards that could hurt farm prices that could offset positive trends in housing, employment and consumer confidence.
“At this time, all signs are pointing to a pretty normal growth year,” said REC member Holly Lyons of the Legislative Services Agency.
“It’s a little on the lackluster, ho-hum side,” she said. “It’s not the bright, twinkly lights we like to see this time of year, but not much has changed since our October forecast and there’s nothing to be pessimistic or overly cautious about at this time when looking ahead to fiscal 2015.”
REC chairman David Roederer, who also serves as Gov. Terry Branstad’s management director, said the governor now will factor the fiscal 2015 revenue growth estimate of 4.5 percent into the budget plan he will submit to the Iowa General Assembly on Jan. 15.
“We’re feeling comfortable but not overly confident about how the economy is going,” he noted.
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