State sees revenues on the rise

Gov. Chet Culver hailed Thursday's slightly rosier revenue projections as evidence that efforts to jump-start Iowa's economy are working.

“Just as my Council of Economic Advisers told us last week, today's Revenue Estimating Conference shows that Iowa is on the road to recovery,” Culver said shortly after REC members adjusted current-year revenue expectations upward by $900,000 and fiscal 2011 projections by $33.1 million.

The numbers remain a half-billion below state tax collections in fiscal 2009, but revenue forecasters said the upward movement is a sign that Iowa's economic doldrums are bottoming out.

“We're just beginning to dig ourselves out of the hole, and in this case, it's a big, big hole,” said REC member Holly Lyons of the Legislative Services Agency.

The forecasting panel expected tax collections to hover at about $5.4 billion through June 30 and then grow by six-tenths of 1 percent in fiscal 2011 - projecting flat to

modest gains from where they were in December.

Richard Oshlo, the REC leader and Culver's budget director, said the slight revisions mean the current state budget - already cut 10 percent across-the-board in October - will not have to be adjusted.

“I understand that this increase in state revenues, while good for state government, is little comfort to those who still are without a job or are concerned about the impact this national recession is having on the services they rely upon,” the governor said.

Democrats who control the Legislature said the extra cash could be used to guard against another round of cuts or to close the gap in the fiscal 2011 spending plan.