Experts predict a 1.4% increase in state tax revenue
DES MOINES — The governor’s budget director is urging caution as state tax revenue growth is expected to be much lower this budget year than in the previous one. Iowa Department of Management director Dave Roederer says he doesn’t think a recession is near, but he has concerns.
“While everything looks pretty good, there are still some warning signs out there.”
Roederer cites the combination of recent tax law changes at the state and federal level, lower-than-expect wage growth and unfinished trade agreements. Roederer and the two other members of the panel that sets the official estimate of future state tax revenue met Monday.
David Underwood, a businessman from Clear Lake, says unfinished trade deals are a big concern in Iowa’s economy. “I’m disappointed that we at this point still have so much uncertainty still hanging over us which makes it difficult for me to see the rosy side of it,” Underwood says. “And I guess looking at the numbers we’ve got before us today, I think we have to continue to be a little bit cautious.”
The state Revenue Estimating Conference predicts state tax collections will grow just 1.4% this year. The group meets again in December to set the estimate for next year’s state tax collections that will be used by lawmakers to draft next year’s state budget.