Des Moines, Iowa — Governor Kim Reynolds has presented a state spending plan to legislators that’s about 700 million dollars ABOVE projected state tax revenue.
Reynolds says that dip in tax collections is expected due to the big state income tax CUT that took effect January 1st and she’s recommending legislators approve withdrawals from a series of state savings accounts to cover the difference.
Reynolds predicts cutting Iowa’s personal income tax to a single rate under three-point-nine percent this month will spur the Iowa economy.
House Speaker Pat Grassley says an initial reduction in state tax receipts was expected, so GOP lawmakers budgeted cautiously over the past several years to beef up the state’s reserves.
Grassley made his comments during the taping of “Iowa Press” which airs tonight (Friday) on Iowa PBS. Senator Janet Petersen, the top Democrat on the Iowa Senate’s budget committee, says Iowans need to be reassured these withdrawals won’t turn out to be a yearly occurrence.
Nearly all of the 700 million dollars would come from the state surplus and cash reserve. About 15 million dollars would be withdrawn from the state’s Economic Emergency Fund – to help Iowa victims of last year’s federally-declared flood and tornado disasters. Reynolds is asking for authority to make similar withdrawals when the legislature isn’t in session, with the approval of other statewide elected officials.
The state’s Economic Emergency Fund has a current balance of over 230 million dollars.
