Iowa REC gives updated revenue estimate
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The Revenue Estimating Conference (REC) met last month to give a better outlook of the state’s budget.
For Fiscal Year 2023, the REC panel increased expected revenue for the current fiscal year from its October forecast of $9.5341 billion to $9.6152 billion. This is an increase of $81.1 million over October’s number. When compared to FY 2022’s final revenue number, state revenue would be down 1.9 percent in FY 23. The decline in annual revenue is due to the implementation of this year’s tax reform bill, which will return $575 million to Iowa taxpayers over the final six months of the fiscal year.
For Fiscal Year 2024, the REC is now projecting that General Fund revenue will be $9.6255 billion. This would be an increase in state revenue of $10.3 million when compared to Fiscal Year 2023. This amount of revenue growth also is due to the implementation of the 2022 tax reform bill. In Fiscal Year 2024, Iowa taxpayers will get back an additional $450 million from the state. That amount is figured into the REC forecast.
As for state gaming tax revenue, the panel kept their forecast for FY 2023 at the level set in October. The state is expecting to collect $317.6 million in gaming this year. In Fiscal Year 2024, gaming tax collections are expected to fall to $285.8 million. The new amount is a decline of $15.9 million from the October forecast. These funds are deposited into the Rebuild Iowa Infrastructure Fund.
Iowa’s economy remains strong, in spite of the national and international headwinds facing it. The REC’s decision to make slight adjustments to their forecast of two months ago was guided by the fact that many of the economic indicators relied upon by the panel haven’t changed. While inflation has started to slightly cool off, so has consumer spending. Housing sales in the state and nation are down, but the supply of available houses also continues to be tight.
Iowa continues to have one of the lower unemployment rates in the nation, with the state expected to return to pre-pandemic employment levels after the start of the new year. But some sectors of the economy, including tech and financial services have sent out pink slips to a growing number of employees. And economists still see a recession as possible in the upcoming year, the opinion on its potential impact varies.
All these factors show Iowa’s economy continuing to remain on track in 2023 and beyond.
Rep. Megan Jones, R-Sioux Rapids, serves parts of Clay and Buena Vista counties in Iowa House District 6.
