Iowa state revenues start slow
Zero revenue growth for first two months of fiscal year
DES MOINES — State tax collections for the first two months of fiscal 2017 grew by $500,000 over the same period one year ago, meaning growth in revenue stood at zero through Wednesday.
Receipts bounced back from a negative start in July to increase 2.2 percent in August, but the flat performance means tax collections in the next 10 months need to be better than expected to meet the yearly growth rate of 7.1 percent the state Revenue Estimating Conference projected for fiscal 2017.
“What it does show you is that there isn’t any bright spots at the moment and it’s quite a ways from what’s necessary for the year,” said Jeff Robinson, a senior tax analyst with the Legislative Services Agency.
To hit the 7.1 percent growth estimate of $7.284 billion for the entire fiscal year, receipts have to grow by $483.5 million. “It’s fairly obvious it needs to see improvement,” Robinson said.
So far, the state has taken in $1.152 billion through August, with personal income and sales/use tax collections up modestly and corporate income posting a double-digit decline.
“The gap between what’s needed, which is 7.1 percent, and zero, which is what it is, is pretty significant, and you start getting concerned earlier because of the size of the gap,” the LSA analyst noted.