Return to Des Moines
Tuesday, June 9, 2020
This week marked the legislature's first week back in Des Moines since the session suspension due to COVID-19 concerns on March 17. While even though we have not been physically in the Capitol building, I have still had the opportunity to hear from many of you with questions and concerns as we push through this difficult time.
A lot of the infrastructure has changed. There are health-screenings at the entrances. There is a lot more hand sanitizer available. Many are wearing masks. People are working further apart. We meet in bigger rooms and there are a lot fewer people at the Capitol.
These changes help to make sure we can wrap-up this legislative session.
Policy issues that had made considerable progress prior to the session suspension will still be considered and are moving through the legislative process in an abbreviated deadline schedule.
Many of you have reached out to me about the budget. The Revenue Estimating Conference (REC) met last Friday afternoon to revise their estimates for fiscal years 2020, 2021, and 2022 and help the legislature get a better idea of where the budget targets sit. The meeting was one of the longer meetings in recent memory, as the panel held an extensive discussion on what they envision for state revenue numbers in Fiscal Year 2021. All three members of the REC emphasized that the new figures were subject to change, based on the impact of the coronavirus outbreak.
• Fiscal Year 2020 — For the current fiscal year, the REC lowered the General Fund forecast. They set the current year's revenue estimate to $7.9412 billion. This would be a 1 percent increase in state revenue over Fiscal Year 2019's actual collections. The FY 2020 budget with the supplementals approved this year, spends $7.752 billion.
• Fiscal Year 2021 — For the next budget year, the REC new estimates for General Fund revenue is $7.8766 billion. This amount is $360.1 million lower than the March estimate of $8.2367 billion. The new figure is also $64.6 million lower than what the REC set for the revised FY 2020 forecast, or a decline of 0.8 percent.
• Fiscal Year 2022 — The panel also revised its forecast of state revenue in Fiscal Year 2022, the REC projected that General Fund revenue would be $8.1995 billion. This would be revenue growth of 4.1 percent or a $322.9 million increase over the current FY 21 projection.
The REC also projects gaming tax revenue, which props up the Rebuild Iowa Infrastructure Fund. The panel is expecting gaming tax revenue in Fiscal Year 2020 to be $72.9 million lower than the March forecast. With this reduction the RIIF budget will be short of funds for the current fiscal year ending June 30. In Fiscal Year 2021, the REC projected that gaming tax revenue will be $25 million lower than what was projected in March.
That all said, I am thankful we have been so careful about the state's budget over the last several years. We corrected it when the projections were wrong. We did not spend everything the state had. We were careful — just like Iowans are with their own budgets.