From Iowa House Republicans:
The three-member Revenue Estimating Conference held its annual December meeting on Monday to revise state revenue projections for the current fiscal year (FY 2022) and to set the official revenue estimate for the next budget year (FY 2023). Just like its last meeting in October, the panel maintained its view that Iowa’s economy and tax revenue are continuing to grow, in spite of various challenges.
Fiscal Year 2022 – The panel increased expected revenue for the current fiscal year from its October forecast of $8.9342 billion to $9.0606 billion. This is an increase of $126.4 million over October’s number. When compared to FY 2021’s final revenue number, state revenue would be up 3.0 percent in FY 22.
Fiscal Year 2023 – For the new budget year, the REC is now projecting that General Fund revenue will be $9.2106 billion. This would be $150 million more in revenue when compared to the forecast for FY 2022. This amounts to a growth rate of 1.7 percent over FY 22. The new number is an increase of $135.9 million from the panel’s forecast in October.
As for state gaming tax revenue, the panel kept their forecasts for FY 2022 & FY 2023 at the levels set in October. The state is expecting to collect $317.6 million in gaming tax each year. These funds are deposited into the Rebuild Iowa Infrastructure Fund.
The REC’s decision to again raise its revenue forecast was backed up by the panel’s view that Iowa’s economy is growing, even with a number of challenges. State revenue collections have been “remarkably resilient” over the last two years and state GDP for the year is right now running at 7.7 percent growth rate.
Still, Iowa’s economic outlook would be even stronger if the state was not facing the economic headwinds of growing inflation and supply chain issues that are the hallmarks of the Biden economy, as well as continued challenges from the COVID pandemic and the state’s continuing need for more workers. While the state has added 27,000 jobs over the past year, Iowa still has 64,000 unemployed Iowans and over 100,000 job vacancies. The panel noted that at current pace, it will still take the state two more years to reach pre-pandemic employment rates.