DES MOINES, IOWA — Members of the Iowa Revenue Estimating Conference met on Wednesday to look at the final numbers of the state tax revenue for the fiscal year 2023 and 2024, which show a dip in tax revenue.
“I have no concerns meeting the obligations the state has and the priorities the state has regarding state spending,” said Kraig Paulsen, the Director of the Iowa Department of Revenue.
Members released their state revenue predictions today. Tax receipts are expected to decline nearly two percent in 2023 due to income and corporate tax cuts along with an end of taxation on state retirement income.
“I guess for whatever reason the economic response in Iowa is always muted, the highs aren’t necessarily as high and the lows aren’t necessarily quite as low and that is just what history tells us,” said Paulsen.
Governor Kim Reynolds took to Twitter to talk about the dip in state tax revenue.
“December’s REC projections confirm that we are achieving our goal of correcting the state’s overcollection of taxpayer dollars and returning it to hardworking Iowans,” the governor wrote. “The historic tax cuts I signed into law earlier this year will begin to take effect in a few weeks, and as planned and expected, the projections show a slight dip in the state’s revenue.”
Iowa Senate Democrats say that the December REC projections are a warning sign for the economy.
“Today’s no-growth revenue estimate is yet another warning sign for Iowa’s economy,” said State Senator Janet Petersen, (D) from Des Moines. “Projected revenues for both 2023 and 2024 are down compared to 2022, and Iowa’s job creation continues to lag behind our neighbors.”
Director Paulsen predicted that the state will collect more than $10 billion in taxes with the 2023 fiscal year ending in June.