June 05,2019

Revenue Up, Taxes Down for Iowans “Thanks Mostly to Federal Tax Changes”

New report for Iowa comes as national data show a majority of Americans received a tax cut and the federal treasury collected $93 billion more in 2018 than in 2017, despite erroneous claims that tax reform would balloon the deficit.

Iowa on Pace to Top Revenue Projection
Rod Boshart
Cedar Rapids Gazette

The state of Iowa is having a better-than-expected tax collection year, thanks mostly to federal tax changes.

With less than a full month remaining in the current fiscal year, net receipts flowing into the Iowa treasury approached $7.07 billion — a 7.8 percent growth rate that was about $515 million more than state taxes collected during the first 11 months of fiscal 2018, according to the nonpartisan Legislative Services Agency.

The robust rate of tax collections likely means the state will finish fiscal 2019 on June 30 well above the yearly growth estimate of 4.8 percent set by the Revenue Estimating Conference. The conference had projected overall receipts would net out at $7.611 billion for the 12-month period.

“It definitely looks good,” Jeff Robinson, a senior tax analyst for the Legislative Services Agency, said on Monday.

He attributed much of Iowa’s $514 million jump in tax collections to the cuts in federal income tax rates that took effect for Iowans in February 2018 — especially a $151.6 million bounce the state treasury got from federal corporate income tax rate reductions.