Iowa state revenue estimates revised upward $80 million

DES MOINES - State revenue estimators on Friday bumped up their state tax collection projections by about $80 million through June 2013, saying Iowa's economic recovery is outperforming the nation as a whole.

However, they added that the positive signs are being slowed by spiraling gasoline prices and sluggish hiring by cautious employers.

“We're doing good; not great yet,” said David Roederer, director of the state Department of Management, who also is chairman of the three-member Iowa Revenue Estimating Conference.

“Iowa's economy is rebounding,” he noted. “We're optimistic about Iowa's economy, but we're cautiously optimistic.”

However, forecasters saw enough positive signs to revise their current year state revenue estimates upward by nearly $51 million. The expectation is that overall tax collections will come in at more than $6.051 billion on June 30, which would be a yearly increase of $152.2 million.

REC members also increased their fiscal 2013 growth projection by $29 million, expecting the state treasury to take in $229.4 million more - a 3.8 percent jump that would total nearly $6.281 billion in state tax collections.

The extra money will mean that the state will end the current fiscal year on June 30 with $60 million in its tax relief fund, a total of $595 million in its various savings accounts and a $442 million budget surplus.

The revised figures won't impact the current state budget negotiations going on at the Statehouse, however, because Gov. Terry Branstad and the split-control Legislature are required to use the REC's December estimate for budgeting purposes. All of the current fiscal 2013 spending proposals put forward by Branstad, majority House Republicans and majority Senate Democrats are already below the 99 percent spending limitation.

However, there are significant differences in fiscal 2013 spending levels between the two political camps. Senate Majority Leader Mike Gronstal, D-Council Bluffs, said he hoped the new REC estimates would enable lawmakers to negotiate a balanced-budget agreement “without gutting education and job creation efforts.”

Rep. Scott Raecker, R-Urbandale, chairman of the House Appropriations Committee, said the House GOP approach of holding state spending below the amount of revenue collected has produced “certainty to weather any economic storm” and he expected Republicans to stay that course as they move to wrap up this year's budget work.

Holly Lyons of the Legislative Services Agency said she sees “more positives than negatives” and projected stronger revenue growth than the other REC members.