DES MOINES — The state has closed the books on fiscal 2019 with an ending balance of $289.3 million, which is more than double its general fund surplus the year before.
“Iowa’s fiscal health is strong, and it’s a reflection of a vibrant economy as well as our ability to live within our means,” said Gov. Kim Reynolds.
The surplus occurred even though the state invested in priorities like the Future Ready Iowa employment readiness program and health care “so that we can be innovative, grow our workforce, and protect vulnerable Iowans,” the Republican governor said.
“Going forward, we will continue to invest in Iowans’ priorities, but we also must be mindful of the economic headwinds in our agricultural economy and be prepared for whatever the future might hold,” she said. “Fiscal responsibility and maintaining our state’s fiscal health will remain a top priority for my administration.”
Strong growth in tax collections contributed to the surplus. When the fiscal year ended June 30, the non-partisan Legislative Services Agency reported fiscal 2019 tax collections were about $99 million above the growth estimate and about $521 million more than the previous year.
Total gross state tax receipts from July 1, 2018, through June 30 were nearly $9.352 billion, Jeff Robinson, a senior tax analyst for the agency, said in early July. That compares with a revised expectation of $9.253 billion the state’s revenue estimating panel set in March.
The ending balance is higher than what was anticipated at the end of the fiscal year. Agency projections issued July 1 called for an estimated ending balance — or surplus — of $217.1 million.
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The surplus is evidence that Iowa’s economy is stronger “thanks to the hard work of GOP leaders,” Republican Party of Iowa Chairman Jeff Kaufmann said.
“Under the leadership of Gov. Reynolds and House and Senate Republicans, we have a conservative, fiscally responsible budget that funds Iowans’ top priorities, creating certainty and stability for Iowa families, businesses, and schools,” he said.
Former Iowa House Appropriations Committee Chairman Chuck Grassley — now chairman of the U.S. Senate Finance Committee — tweeted that the surplus “Gr8 news ... proving Gov Reynolds & Republican led state legislature are responsible stewards of taxpayer $$”
However, the Iowa Business Council said Monday its members’ confidence has weakened, likely due to political and global market uncertainty and a disruptive regulatory climate.
While over 75 percent of the council’s members expect higher sales in the upcoming six months, capital spending and employment expectations are mixed. The survey’s overall index is down to its lowest point since the fourth quarter of 2016.
“Our members cite the trade war and an uncertain geopolitical climate as the leading major disrupters for their growth,” said Georgia Van Gundy, the council’s executive director.
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