We are over-collecting your hard-earned tax dollars. We have to remember that government revenue is not government money but your money and we are taking more of it than we need to pay the bills and your priority issues. I believe that a well-run government doesn’t need to collect more taxes. It sends those dollars back to you so that you can grow and expand and that is the real growth of the middle class and the overall economy.
The three-member Revenue Estimating Conference held its fall meeting this afternoon. Today’s meeting gives the panel the opportunity to revise their estimates for the current fiscal year (FY 23) and release their first detailed estimate for the upcoming fiscal year (FY 24).
Fiscal Year 2022 ended up with revenue much higher than what the panel had forecast in March. For that year, the state took in $9803.4 into the General Fund. This was $1 billion higher than Fiscal Year 2021 revenue and over $600 million higher than March’s projection.
For Fiscal Year 2023, the REC raised its revenue forecast from $9.156.4 billion to $9.5341 billion. This is an increase of $377.8 million over March’s number. When compared to FY 2022’s final revenue number, state revenue would be down 2.7 percent. The reason state revenue would be lower in FY 23 is due to implementation of this year’s tax cuts, which go into effect on January 1, 2023. LSA said the cuts will return $575 million to the taxpayers in FY 2023.
For Fiscal Year 2024, the panel’s estimate is General Fund revenue of $9.5943 billion. This would be an increase of 0.6 percent over the FY 23 estimate. Again, the 2022 tax cuts have been factored into the forecast. They will return an additional $450 million to Iowa taxpayers in FY 2024.
As for the Rebuild Iowa Infrastructure Fund, the REC slightly lowered its forecast for gaming revenue in FY 2023. The panel set the expected revenue at $317.6 million, a reduction of $300,000 from March’s figure. For FY 24, the initial forecast for gaming revenue is $301.7 million. The drop would likely be due to the continued phaseout of the tax on promotional play and the expected impact of casinos opening up in Nebraska.
We will have more information about the REC’s view of Iowa’s economy and balance sheet in next week’s newsletter. If you have any questions, please let me know.