Panel predicts 1.7% increase in Iowa tax revenue
A panel of financial experts has raised its forecast for state tax revenue for the current budget year and predicts that tax revenue will increase by one point seven percent in the next fiscal year, which begins July 1.
David Underwood, a CPA from Clear Lake, said the pandemic is the biggest uncertainty in the economy.
“We are unfortunately still concerned about the variants of Covid,” Underwood said. “A year ago we were like, ‘Oh, man. We are going to get vaccinated and that will solve our problems. »
Underwood is one of three members of the state’s revenue estimation conference. Kraig Paulsen, director of the Iowa Department of Revenue and acting director of the Iowa Department of Management, is another member of the group.
“Current incomes continue to be high. Sales and use tax revenues continue to show strength,” Paulsen said. “…Demand continues to be strong for both consumer and business spending. I don’t see any indication of this slowing down anytime soon.
Paulsen, however, said the number of workers in Iowa continues to slow and there are far more job openings than people actively seeking work. Holly Lyons of the Legislative Services Agency is also a member of the State Revenue Estimating Conference. Lyons cited the “headwinds” facing the economy as the group reviewed tax receipts through November 30.
“These include the uncertainty about inflation, the ongoing labor shortage in Iowa, and the slow job growth that we mention every time we meet,” said Lyon, “and the unknown impact of the omicron variant and future variants of Covid-19”.
The group predicts that current fiscal year tax revenue will increase by 3% and that the so-called Taxpayer Relief Fund will reach more than $2 billion.