Financial analysts say Iowa is taking in less-than-expected revenue and must address a new shortfall of about $131 million for its current budget.
The three-member Revenue Estimating Conference announced Tuesday that Iowa was expected to take in about $7.1 billion for the current budget year, which ends June 30th.
It’s the third time the revenue forecast has been cut since last fall.
Iowa Department of Management Director David Roederer says the situation is not dour, as the state is still projected to collect four percent more in taxes this year compared to last:
OC………still about 4 percent. ;10
Roederer says the state should offset the deficit by tapping its cash reserves rather than make additional cuts.
Iowa lawmakers have already cut more than $117 million from the current budget to address an earlier shortfall.
The analysts didn’t point to one reason behind the revenue decline, but panel member David Underwood says he is surprised there’s not more income growth shown on the 2016 personal income tax returns filed in Iowa so far:
OC………..a lot of sense. ;11
One possibility is an increase in online purchases where Iowa customers can avoid paying state sales tax.