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Governor Says Tax Revenue Projections Should Spur Decision To Speed Up Tax Cuts

Des Moines, Iowa — A state panel is predicting tax revenue for the State of Iowa in the next couple of years will continue to grow at a steady clip.

Michael Bousselot, the governor’s budget director, is on the State Revenue Estimating Conference.

(as said) “The steadiness and persistence of Iowa’s economy means there’s, I think, a little less rocky of that path going forward than what other states might face and that’s what sort of gives me that confidence in the numbers.”

The projections suggest total tax receipts for the state will be three-point-eight percent higher in the next fiscal year, which starts July 1st. The following year, the panel estimates tax collections will grow even more, by four-and-a-half percent. Governor Kim Reynolds says it means legislators can eliminate tax revenue benchmarks and let a series of state income tax cuts take effect more quickly. The governor’s budget director says the future state tax revenue predictions are based on consumer confidence as sectors of the economy like manufacturing and home building are growing.

(as said) “That confidence is obviously buoyed by $1400 stimulus checks that Iowans have received in the past days,” Bousselot says. “…It also means that there’s demand that will be delivered longer term.”

Holly Lyons of the Legislative Services Agency, another member of the group that sets state tax estimates, says there’s pent up demand for goods and services.

(as said) “Some economists are concerned that the pent up demand for spending may fuel inflation and recent market activity indicates that longer term interest rates are on the rise, ” Lyons says. “While rising rates are sometimes a sign of an overheating economy, they can be a sign of new life.”

David Underwood, a C-P-A from Clear Lake, is the third member of the group that sets state tax estimates. He says there’s still uncertainty in the economy and he’s a bit more cautious about state tax receipts than the other two members of the panel.

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