Iowa’s non-partisan budget experts said lawmakers will still have to take action this year to balance the state budget before the end of the fiscal year on June 30.
For Fiscal Year 2018, the Revenue Estimating Conference (REC) updated their revenue projections with a small increase of 0.4% growth. Despite the slight increase, the state budget remains unbalanced and the Legislature will have to address the budget shortfall before adjourning for the year.
Budget experts on the REC continued to express concern over the agriculture economy and the need for skilled workers in the state. They also expressed concern of how the federal policy changes to NAFTA, as well as the possible fallout from a trade war due to increased tariffs could impact Iowa’s economy.
Before adjourning for the year, lawmakers must also approve a state budget for Fiscal Year 2019. While the economy continues to grow slowly, the REC did increase the estimate for FY 19 by $206.8 million. That increase is largely the result of tax and budget changes made at the federal level.
As lawmakers and the Governor begin work on the budget, they will be challenged with how to address the $308.3 million in anticipated built-in increases for FY 19 and other tax plans offered by Republican laws that cost $1 billion annually.