Yesterday’s revised estimate of Iowa’s projected revenue for the 2017 fiscal year shows a decrease in available funds, leading to some tough decisions in the upcoming legislative session. Republicans immediately suggested budget cuts, though Governor Terry Branstad said he would prefer public education funding be spared from reductions. Democrats will likely take aim at some of the corporate tax cuts passed in recent years.
Revenue estimates decreased by around $100 million from a previous report two months ago. The $7.2 billion estimate for 2017 is still an increase over 2016 revenue, but it’s less than originally expected.
Republicans are coming into the 2017 session with their new majority in the Iowa Senate, likely eager to pass new tax cuts for businesses and bigger state incentives for corporate projects to locate in Iowa. They’ll have to balance that now against the lower revenue, but could end up just cutting other budget items even more.
State Representative Chris Hall, in a statement on behalf of House Democrats, criticized the Branstad Administration and legislative Republicans for creating the revenue shortfall in the first place. He put the blame squarely on past Republican hand-outs to big businesses and warned against making cuts from Iowa schools.
“The Branstad/Reynolds Administration and House Republicans have put the state budget $135 million in the red and stalled the state’s economy,” Hall said. “It’s clear their unsustainable tax giveaways to out-of-state corporations have not produced good jobs, skilled workers, rising incomes for hard-working Iowans, or a stronger economy like they promised.”
“I hope Republicans and Lt. Governor Reynolds will heed the warning from our non-partisan budget experts,” he continued. “We must recognize that shortchanging schools again to make way for massive corporate tax giveaways will not help working families or grow Iowa’s economy. House Democrats will work next session to balance the state budget while investing in education and job training to build a strong economy for all Iowans.”
by Pat Rynard