(Radio Iowa) – Governor Kim Reynolds has presented a state spending plan to legislators that’s about 700-MILLION dollars ABOVE projected state tax revenue.
Reynolds says that dip in tax collections is expected due to the big state income tax CUT that took effect January 1st and she’s recommending legislators approve withdrawals from a series of state savings accounts to cover the difference. Reynolds predicts cutting Iowa’s personal income tax to a single rate under three-point-nine percent this month will spur the Iowa economy and lead to state tax revenue growth.
House Speaker Pat Grassley says an initial reduction in state tax receipts was expected, so G-O-P lawmakers budgeted cautiously over the past several years to beef up the state’s reserves. Senator Janet Petersen, the top Democrat on the Iowa Senate’s budget committee, says Iowans need to be reassured these withdrawals won’t turn out to be a yearly occurrence — so the state doesn’t use its savings for ongoing expenses.
