The governor’s top budget advisor and two other officials agree state tax collections during the NEXT state budgeting year will drop $67 million more than they predicted two months ago. Iowa Department of Management director Kraig Paulsen is also chairman of the state Revenue Estimating Conference.
Governor Reynolds has signed a series of tax reductions since she became governor in mid-2017 and the state income tax will shrink to a single rate of three-point-85 percent in January. Paulsen says with over six-point-six BILLION dollars of unspent tax money held in a cash reserve and the Taxpayer Relief Fund, there’s room for more cuts.
And Paulsen says there are positive signals in the national economy, indicating taxes paid to the State of Iowa won’t fall precipitously.
Democrats in the Iowa House say every week Iowans are experiencing more layoffs, while Republican lawmakers are planning for more tax cuts for corporations and the wealthy. A top Democrat in the Iowa Senate says while state tax revenue is declining, Governor Reynolds is sending hundreds of millions of dollars to private schools and Iowans need more information about how the state money in Education Savings Accounts to cover students’ private school expenses is being spent.
