Report: State Revenue Down $141 Million

By Rod Boshart

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By Becky Ogann

Story Created: Oct 1, 2009 at 11:30 AM CST

Story Updated: Oct 1, 2009 at 11:30 AM CST

DES MOINES - More bad economic news on Thursday for Iowa Gov. Chet Culver and state budget-makers.

The latest monthly revenue report issued by the Legislative Services Agency shows state tax collections plummeted by 19.2 percent – marking the eighth straight monthly decline and increasing the likelihood that the governor will have to order an across-the-board budget cut or take other measures to address the slump in revenues.

Through the first quarter, state revenues are running 9.1 percent below last year which translates to a drop of $141.1 million compared to the first three months of fiscal 2009.

The state Revenue Estimating Conference has projected that overall yearly state tax receipts will be off by minus 0.7 percent. The panel likely will have to revised its estimates downward when it convenes next week.

“This is the worst month in decades,” said Jeff Robinson, a fiscal analyst with the Legislative Services Agency who said the 19.1 percent drop in September was worse than he anticipated.

Last month saw personal income tax receipts slip 8.8 percent, a decline that Robinson said reflects Iowa’s worsening employment picture and deepening effects of the national recession.

Corporate income and inheritance taxes also were among the double-digit declines last month, while sales and use tax receipts slipped by 7.8 percent in September.

Culver administration officials were not immediately available for comment.
House Republican Leader Kraig Paulsen of Hiawatha said the first-quarter revenue numbers are further evidence that Culver’s I-JOBS bonding program to create jobs is not working.

“We continue to be in this fiscal mess because Gov. Culver signed the largest budget in the history of Iowa,” Paulsen said. “I have very serious concerns that Gov. Culver will use this as an excuse to raise taxes on hard-working Iowans. The problem has now carried in to the 2010 budget, which is clearly out of balance.

“House Republicans offered over $337 million in budget savings during the last legislative session and we will continue to offer ideas and create a plan that brings Iowa’s checkbook back into balance without shifting more burden to the taxpayers,” he added.

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