State revenues have fallen by more than a half-billion dollars over the past three months, but the full impact of the coronavirus pandemic on Iowa tax collections may be less than that, an analyst reported Thursday.
Tax revenues declined $563.6 million, or 22.6 percent, from March 19 through June 23, when compared to last year, Legislative Services Agency fiscal analyst Jeff Robinson stated.
Some of that drop is because of the coronavirus impact on the Iowa economy, but some, Robinson said, is because of the delay in collecting state income taxes.
“It will not be until the delayed tax payments have been deposited that the economic impact of recent events can be reasonably calculated,” Robinson wrote in a fiscal update.
The deadline for paying state income taxes, typically April 30, was extended this year to July 31 after Gov. Kim Reynolds issued a series of emergency proclamations to deal with the coronavirus.
Some part of the 32.3 percent decline — $314.7 million — in individual income taxes is due to that delay and not the coronavirus impact on the economy, Robinson said.
A portion of the 36.3 percent decline — $102 million — in corporate tax receipts may be due, in part, to the current economic conditions, if corporations lowered their tax year 2020 estimate payments, Robinson said.
Sales taxes are down a “modest” 4.2 percent, or $29.2 million, he said.
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Overall, general fund tax receipts that cover the $7.8 billion budget Iowa legislators approved earlier this month are running $456.9 million (22.1 percent) less than in 2019, Robinson reported.
Non-general fund tax revenues showed a $106.7 million (24.9 percent) decline from a year earlier.
With the governor closing casinos to slow the spread of COVID-19, gambling taxes dropped almost $72 million (81 percent). The casinos began reopening earlier this month, and two weekly deposits totaled $10.6 million as compared to $11.8 million for the same time period in 2019.
Motor fuel revenues were down by $13.2 million (7.5 percent), and vehicle sales taxes for new registrations were off by $22.4 million (21.2 percent).
State officials have been keeping a close eye on revenues, concerned they might not meet earlier growth projections.
In late May, the state Revenue Estimating Conference lowered its forecast for tax collections by nearly $150 million in the current fiscal year that ends June 30. And it revised its revenue expectations for fiscal 2021, which begins July 1, downward by about $360 million from levels it forecast March 12.
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