Iowa tax collections lagging below estimate

DES MOINES - State revenue grew slightly in October, but the growth rate through the first four months of the current fiscal year is lagging significantly below the amount of tax that state officials estimated would be collected through next June 30.

Jeff Robinson, a tax analyst with the Legislative Services Agency, said last month's tax receipts were $3.1 million above October 2015, and that 0.7 percent increase brought the year-to-date growth since July 1 to $19 million over the same four-month period one year ago.

'The trend for the four months has all been kind of mediocre,” he said, noting the latest yearly forecast set by the state Revenue Estimating Conference calls for tax collections to increase by 6.1 percent, or $415 million. To reach that target, state tax receipts would have to approach nearly $400 million in the next eight months.

Lower corporate tax receipts and higher tax refunds have been the biggest drag on growth, Robinson noted, while personal income tax withholdings and sales/use tax receipts have remained fairly strong in the 3 percent growth ranges.

At last month's REC meeting, the three-member panel scaled back projections for tax collections in the face of worldwide uncertainty, but still expected Iowa's economy would grow at a 'muted” rate as low farm prices put a drag on other sectors.

The state panel meets again in December to visit the growth estimates and finalize tax receipt projections through June 2018 that is to frame the state budget discussions for Gov. Terry Branstad and the 87th General Assembly during the 2017 legislative session. Branstad has indicated he plans to present a two-year budget proposal to legislators on Jan. 10.

l Comments: (515) 243-7220; rod.boshart@thegazette.com