THE FULL FORECAST. THANK YOU JOHN. RIGHT NOW GOVERNOR REYNOLDS IS GETTING READY FOR HER LAST LEGISLATIVE SESSION IN OFFICE. WE SPOKE WITH STATE REPRESENTATIVES AND OTHER COMMUNITY LEADERS IN DALLAS CENTER YESTERDAY AFTERNOON. KCCI ABIGAIL CROTON WAS ABLE TO SPEAK WITH HER AFTERWARDS AND LEARN MORE ABOUT HER PLANS. WHETHER YOU PAY 200 OR $2000 IN PROPERTY TAX EACH YEAR, NOBODY LIKES TO SEE THEIR BILL GO UP. AND GOVERNOR KIM REYNOLDS SAYS IT’S CONSISTENTLY A BIG ISSUE FOR HER CONSTITUENTS. WE HEAR THAT LOUD AND CLEAR EVERY TIME. EVERYWHERE WE GO, PEOPLE ARE JUST FRUSTRATED TO SEE THEIR PROPERTY TAXES CONTINUE TO INCREASE. BUT THAT’S WHY SHE SPENT THE AFTERNOON SPEAKING WITH SOME OF THOSE CONSTITUENTS ALONGSIDE STATE REPRESENTATIVES TO HEAR THEIR CONCERNS. THIS WAS HER THIRD TIME HOSTING SUCH A MEETING, BUT SHE HOPES TO USE THE FEEDBACK SHE RECEIVES TO HELP HER FORMULATE A PLAN FOR THE UPCOMING LEGISLATIVE SESSION. YOU’RE GOING TO HAVE TO TAKE A LOOK AT HOW WE DELIVER SERVICE, DIFFERENT SERVICES DIFFERENTLY, AND IF THAT’S NOT SOMETHING THAT THEY’RE WILLING TO DO, WE’RE PROBABLY STUCK WITH WHAT WE HAVE RIGHT NOW. REYNOLDS WAS ALSO ASKED ABOUT THE POSSIBILITY OF PHASING OUT PROPERTY TAXES ALTOGETHER, AND WHILE SHE LIKED HOW IT SOUNDED, SHE WAS WARY ON WHETHER SUCH PLANS WOULD ACTUALLY WORK. I’D LIKE TO SEE THAT PLAN. ON PAPER. THAT’S NOT SOMETHING THAT’S GOING TO HAPPEN OVERNIGHT, BUT IF THEY’VE GOT AN IDEA TO MAKE THAT HAPPEN, YOU GOT TO GOT TO PAY FOR THESE SERVICES ONE WAY OR THE OTHER. BUT SHE ALSO SPOKE ABOUT IOWA’S ECONOMY AS A WHOLE. A RECENT REPORT FROM MOODY’S ANALYTICS LISTED IOWA AS ONE OF 22 STATES ON THE BRINK OF, OR IN A RECESSION. AND WHILE REYNOLDS ACKNOWLEDGED THE ECONOMIC CHALLENGES IOWA’S FARMERS ARE FACING, SHE SAYS IT’S THE FAULT OF THE PREVIOUS ADMINISTRATION. BIDEN DID ABSOLUTELY NOTHING WHEN IT CAME TO TRADE FOR FOUR YEARS, AND WE’RE PAYING A PRICE OF THAT, THOUGH SHE WENT ON TO SAY SHE’S HOPEFUL FOR IOWA’S ECONOMIC FUTURE AS A WHOLE. WE’RE STRONG. WE’RE WE’RE DOING WELL. ABIGAIL CURTIN, KCCI EIGHT NEWS, IOWA’S NEWS LEADER. REYNOLDS WAS ALSO ASKED ABOUT EMINENT DOMAIN AFTER VETOING A BILL THAT WOULD HAVE MADE IT HARDER FOR PROJECTS TO USE IT, MAKING IT. AND SHE SAYS THAT HER PRIMARY FOCUS IS PROPERTY TAXES. BUT SHE WOULDN’T BE SURPRISED IF MORE BILLS ON THAT ISSUE ARE PRESENTED. THIS UPCOMING SESSION. EXPERTS ARE EXPECTING IOWA TO MAKE LESS MONEY IN THE NEXT TWO YEARS THAN ORIGINALLY THOUGHT. THE REVENUE ESTIMATING CONFERENCE VOTED TO REDUCE THE STATE’S PROJECTED REVENUES FOR 2026 AND 27. THE PANEL SAYS IT’S BECAUSE OF TAX CUTS BY THE LEGISLATURE. THE CUTS ARE PROJECTED TO MAKE STATE REVENUE DROP BY MORE THAN 8%. THAT COMES OUT TO MORE THAN $816 MILLION. RIGHT NOW, THERE ARE CURRENTLY $6 BILLION IN IOWA’S RESERVES. BUT THE PANEL SAYS OUR STATE’S ECONOMY IS STILL SHAKY DUE TO THE GOVERNMENT SHUTDOWN AND THE ONGOING TARIFF BATTLES IN WASHINGTON. THE PANEL SAYS
Iowa’s projected general fund revenues for fiscal years 2026 and 2027 were revised down slightly.”We are not in a period of the state’s most robust growth but we do continue to see growth,” said Department of Management Director Kraig Paulsen.The Revenue Estimating Conference, a three-member panel, met Friday morning and voted on the move. State law provides that the REC is in charge of determining estimates for state revenues. It also evaluates fiscal impacts of legislation and budget proposals.What do the numbers say?Tax cuts by the Iowa Legislature were expected to decrease state revenues, the three-member panel says.That means 8.4% less for the state’s general fund, which is a decrease of $816.6 million. However, some have said this is a sign that Iowa’s economy is struggling. there is $6 billion in reserve funds. Who’s on the Revenue Estimating Conference?REC members include Jennifer Acton, fiscal division director, of the Legislative Services Agency; Kraig Paulsen, director of the Iowa Department of Management; and Jeff Plagge, a member of the public. It meets every quarter.What is affecting Iowa’s economy?REC members on Thursday noted there’s economic uncertainty on multiple levels. They mentioned tariffs and responses to tariffs affecting trade. Iowa’s economy contracted 6.1% in the quarter but grew 3% in the second quarter, they pointed out. Hiring has been sluggish but businesses have reported some more movement recently. Harvest is well under way, but grain producers are having a tough year. There are some areas with lots of Southern rust, a fungal disease that affects corn, that will affect yields. On the other hand, the REC members noted livestock producers are having a “phenomenal” year, especially beef cattle growers.What are responses to the REC estimates?A number of responses were released Thursday. They include:From Gov. Kim Reynolds: “Iowa is in strong financial position with a State General Fund ending balance of more than $1.88 billion, more than $4 billion in the Taxpayer Relief Fund, and full reserve funds. Now that Iowa’s 3.8% flat income tax is fully implemented, Iowans have more of their own money today than they did at this same time last year. As a result, the state’s General Fund revenue is down just as we projected and responsibly planned for, and just as it should be. Government should only ask from its taxpayers what it needs to operate effectively on their behalf. Iowa Senate Majority Leader Mike Klimesh (R.-Spillville): “The news of the Revenue Estimating Conference today is not a surprise. It simply reaffirms the need to continue down the path of responsible, sustainable budgeting. There has been good news about the economy over the last few weeks. … We have been conservative with our spending, our reserves are full, and the budget is sound as the economy continues to change.”From State Auditor Rob Sand: “This confirms what I’ve been saying for years – our state budget has been run into the ground, and the surplus, provided largely from federal funds, will only steady us for a short time.”From State Sen. Janet Petersen (D-Des Moines) and Senate Democrats: “The majority party’s priorities are failing Iowans. Our state revenues are plummeting, cancer rates are up, and Iowa is trailing behind the rest of the country in economic growth. “This isn’t just a small dip in revenues, it’s a historic drop in revenue. The majority party’s plan is to bleed our reserves dry to pay for their giveaways.”» Subscribe to KCCI’s YouTube page» Download the free KCCI app to get updates on the go: Apple | Google Play
Iowa’s projected general fund revenues for fiscal years 2026 and 2027 were revised down slightly.
“We are not in a period of the state’s most robust growth but we do continue to see growth,” said Department of Management Director Kraig Paulsen.
The Revenue Estimating Conference, a three-member panel, met Friday morning and voted on the move. State law provides that the REC is in charge of determining estimates for state revenues. It also evaluates fiscal impacts of legislation and budget proposals.
What do the numbers say?
Tax cuts by the Iowa Legislature were expected to decrease state revenues, the three-member panel says.
That means 8.4% less for the state’s general fund, which is a decrease of $816.6 million.
However, some have said this is a sign that Iowa’s economy is struggling.
there is $6 billion in reserve funds.
Who’s on the Revenue Estimating Conference?
REC members include Jennifer Acton, fiscal division director, of the Legislative Services Agency; Kraig Paulsen, director of the Iowa Department of Management; and Jeff Plagge, a member of the public. It meets every quarter.
What is affecting Iowa’s economy?
REC members on Thursday noted there’s economic uncertainty on multiple levels. They mentioned tariffs and responses to tariffs affecting trade. Iowa’s economy contracted 6.1% in the quarter but grew 3% in the second quarter, they pointed out. Hiring has been sluggish but businesses have reported some more movement recently. Harvest is well under way, but grain producers are having a tough year. There are some areas with lots of Southern rust, a fungal disease that affects corn, that will affect yields. On the other hand, the REC members noted livestock producers are having a “phenomenal” year, especially beef cattle growers.
What are responses to the REC estimates?
A number of responses were released Thursday. They include:
- From Gov. Kim Reynolds: “Iowa is in strong financial position with a State General Fund ending balance of more than $1.88 billion, more than $4 billion in the Taxpayer Relief Fund, and full reserve funds. Now that Iowa’s 3.8% flat income tax is fully implemented, Iowans have more of their own money today than they did at this same time last year. As a result, the state’s General Fund revenue is down just as we projected and responsibly planned for, and just as it should be. Government should only ask from its taxpayers what it needs to operate effectively on their behalf.
- Iowa Senate Majority Leader Mike Klimesh (R.-Spillville): “The news of the Revenue Estimating Conference today is not a surprise. It simply reaffirms the need to continue down the path of responsible, sustainable budgeting. There has been good news about the economy over the last few weeks. … We have been conservative with our spending, our reserves are full, and the budget is sound as the economy continues to change.”
- From State Auditor Rob Sand: “This confirms what I’ve been saying for years – our state budget has been run into the ground, and the surplus, provided largely from federal funds, will only steady us for a short time.”
- From State Sen. Janet Petersen (D-Des Moines) and Senate Democrats: “The majority party’s priorities are failing Iowans. Our state revenues are plummeting, cancer rates are up, and Iowa is trailing behind the rest of the country in economic growth. “This isn’t just a small dip in revenues, it’s a historic drop in revenue. The majority party’s plan is to bleed our reserves dry to pay for their giveaways.”
» Subscribe to KCCI’s YouTube page
» Download the free KCCI app to get updates on the go: Apple | Google Play