A non-partisan group of budget experts met last week and they continue to be optimistic about Iowa’s economy, with job growth improving and unemployment claims down.
For the current fiscal year (2015), the Revenue Estimating Conference (REC) expects revenues to be $278.4 million higher than last year (FY 2014). They also updated the revenue estimate for Fiscal Year 2016, which lawmakers are required to use to build the budget this session, and expect a 6.0% increase over this year (FY 2015), which is about $408 million.
The main concern about the economy is the lower agriculture commodity prices, which is estimated to lower farm income by as much as 30 percent and possibly as much again next year. Lower gas prices may continue to help reduce input costs for farmers and provide at least a temporary increase of disposable income for many Iowans.
The budget experts actually lowered their previous revenue estimate for FY2015 that was made in December by about $89.7 million to $6.8 billion. The main reason for the decline is due to the law change with the enactment of SF 126 the Internal Revenue Code (IRC) Update bill that lowered FY 2015 revenues by $99 million. Had this law change not have occurred, the FY 2015 revenue estimate would have been up slightly.
The REC recommended increasing the estimate for gambling revenues at $274.6 million to $277.7 million for FY 2015, an increase of $3.1 million. The REC increased their estimate for FY 2016 gambling revenues from $279.8 million to $288.2 million, an increase of $8.4 million.