DES MOINES – Full speed ahead but with caution – that was the message state budget-makers got from Iowa’s revenue forecasters Thursday who left their estimates for tax collections unchanged from when they last met in December.
The decision not to alter expectations that the state treasury will take in $6.682 billion this fiscal year and $6.983 billion in fiscal 2015 means leaders of the split-control Legislature will not have to adjust their spending targets as they work to assemble a $6.972 billion budget for the fiscal year beginning July 1.
“This will allow us to move forward with what we planned over the past months,” said Rep. Chuck Soderberg, R-LeMars, chairman of the House Appropriations Committee. “We just have to stick to our budget principles and live within our means and I think this confirms that we are heading in the right direction when it comes to a fiscal year 2015 budget.”
Members of the Revenue Estimating Conference were generally upbeat about Iowa’s slow, steady recovery, although slumping commodity prices and the ripple effect they might have through the Iowa economy were a major concern as they looked to the future.
“We’re wise to be cautious,” said David Roederer, REC leader and director of the state Department of Management.
Holly Lyons of the Legislative Services Agency said the U.S. economy has been advancing at a modest pace but the rebound has been fairly weak. She noted that Iowa’s cold and snowy winter has been a “severe drag” but most economic indicators are pointing in a positive direction.
REC member David Underwood was most concerned about the depressed corn prices and the negative impacts that might follow for farm rents, equipment makers and food prices. Roederer said there continue to be international concerns and stagnant job growth that has slowed economic growth domestically.
Soderberg said the REC decision to downgrade state gaming receipts by $3.6 million from December to a revised $274.6 million yearly projection means lawmakers will have less to spend for Rebuild Iowa Infrastructure Fund projects.
House Speaker Kraig Paulsen, R-Hiawatha, had indicated the bipartisan budget targets would need to be adjusted if the revenue projections were lowered, but that didn’t happen so Senate Majority Leader Mike Gronstal, D-Council Bluffs, said no adjustments would be required.
Both leaders said budget talks are progressing within the various subcategories with several already resolved and others slowly coming together as legislators are turning their eyes toward adjournment.
The current year revenue estimate is a 1.3 percent decline from the nearly $6.769 billion in tax receipts the state collected last fiscal year. The REC projections predict a 4.5 percent growth rate for state revenue in fiscal 2015.
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