Iowa GOP Leaders Speak of Tax Cuts as Income Growth Continues | News, Sports, Jobs
DES MOINES – A trio of Iowa state budget experts predicted on Monday that state revenues would increase by about 3% for the current fiscal year and 1.7% next year , leaving billions of dollars in unspent money that Republican leaders say should be returned to Iowa in the form of tax cuts.
Iowa and many other states have received a boost from federal COVID-19 assistance, which has fueled increased consumer spending this year and is reflected in increased tax collections. and increased government revenue. The challenge is to determine what happens to government revenues when the impact of federal funding decreases.
The three-person panel – made up of Iowa Department of Management director Kraig Paulsen, Holly Lyons of the Legislative Services Agency and company owner David Underwood – concluded that revenue growth would slow but would continue to increase.
All of this means that Iowa will likely end the current year with an unspent balance of $ 1.3 billion. When added to the current balance in the taxpayer assistance fund, that leaves more than $ 2 billion in excess revenue that the state has not committed to spending.
Gov. Kim Reynolds and lawmakers are to use Monday’s estimates to design a state budget. Reynolds said she plans to offer significant tax cuts.
“This excessive tax collection is unethical and must stop,” she said in a statement.
Iowa House President Pat Grassley said he plans to work on “finding the most effective way to lower taxes and return that money to the taxpayers of Iowa.”
Democrats insist any tax cut should target middle-to-low-income Iowans and small businesses, and move towards programs to help working Iowans, including job training, paid family leave, child care and housing.
“Contrary to what the Governor and Legislative Republicans are saying, more tax breaks for businesses and tax cuts for millionaires in Des Moines will only worsen their workforce crisis, especially in rural Iowa, ”said Democratic Senator Joe Bolkcom, who is the principal Democrat on the Senate committee that drafts the budgets.
The Iowa Legislature is scheduled to convene the 2022 session on January 10.