DES MOINES, Iowa (AP) — Iowa state budget experts predict state revenue will increase by about 3% for the current fiscal year and 1.7% next year.
Iowa and many other states experienced a boost from federal COVID-19 aid, which fueled increased consumer spending through this year and is reflected in increased tax collections and more state revenue.
The challenge is to determine what happens when the impact of the federal dollars wanes. The budget experts concluded Monday that revenue growth will slow but continue upward. It all means Iowa is likely to have more than $2 billion in excess revenue that the state has not committed to spending. Gov. Kim Reynolds and Republican legislative leaders say they plan to propose significant tax cuts.