Revenue Estimating Conference Meets
The Revenue Estimating Conference met in their regularly scheduled December meeting on December 11. The REC meets regularly to give the Governor, Legislature and Iowans an estimate of our state revenues for fiscal 2021, the current fiscal year that ends June 30, and fiscal 22 that begins July 1. By law, the Governor will use these fiscal 22 figures when she submits her budget proposals next month. The REC will meet again in March and by law, the legislature must use the lower of the December or March figures when we pass the 2022 budget. We can legally spend up to 99% of the lower estimate. We have not spent that much in recent years, resulting in budget surpluses even in the difficult 2020 fiscal year. We are projected to have a surplus in the current year. Iowa has been ranked as the number 1 state when it comes to the ability to handle the current fiscal problems caused by the COVID-19 crisis. I have served on the Appropriations Committee each of the last several years and am happy to have had a voice in passing these budgets.
The REC raised the fiscal 2021 estimate by $57.6 million over the October estimate, to $7,969.3 million. This is an increase of $38.7 million over the actual revenues received in the 2020 fiscal year.
For the upcoming fiscal 2022 budget the REC raised the revenue estimate by $34.9 million to $8,265.7 million. This is an increase of $296.4 million over the new 2021 figures. Keep in mind that these are estimates and we are still in uncertain times though with the vaccines coming on, and Iowa’s good economic situation, we have reason to believe that Iowa’s economy will continue to be among the very best. A growing economy is a better way to increase revenue, than increasing tax rates.
Iowa Unemployment Declines Again
Iowa Workforce Development reports that the November unemployment rate dropped slightly to 3.6%. This is in spite of normal seasonal reductions in employment in some industries such as agriculture, landscaping and construction. The Iowa workforce is 1.1619 million. Keep in mind that there are thousands of job openings listed at iowaworks.gov.
I am re-introducing my bill to require Iowa employers to use the federal E-Verify program to be sure people they are hiring are in the country legally. E-Verify is available, online free of charge, to any employer. Employers who hire people who are here illegally are violating federal law every day. There are severe federal penalties but violations are so widespread that the federal authorities cannot keep up. E-Verify has been in existence for many years but its use is voluntary. Many employers use it but most don’t. According to Homeland Security, 5,202 Iowa employers currently use E-Verify. More than 20 states have some kind of E-Verify requirement but the coverage varies.
It is unfair to employers who obey the law but have to compete with others who hire people here illegally so they can pay substandard wages, giving them a competitive advantage over those obeying the law. It is also unfair to employees who have to compete for jobs with people here illegally who will work for substandard wages.
We passed the bill in the Senate in 2019 by a 33-14 margin. A few Democrats voted for it but most didn’t. The House never voted on it.
As always please feel free to contact me with your ideas or concerns.