A critical meeting at the capitol tomorrow (Tuesday) will determine whether the current year’s state budget needs to be cut more AND whether legislators will have to dramatically scale back their tentative plans for the NEXT year. “That could definitely happen.” That’s State Representative Pat Grassley, chairman of the budget-writing committee in the Iowa House.

The reason for the uncertainty? State tax collections are running far behind expectations, barely two percent ahead of last year. Jeff Robinson is a fiscal analyst for the Legislative Services Agency. “Although the revenue news is fairly grim thus far for fiscal year 2017, the bulk of tax year 2016 income tax processing remains and there are reasons to believe the tax filing season, when completed, will be positive for revenue growth.”

Although charts show the state of Iowa has collected 88 million dollars MORE in taxes during the past eight months, Robinson says there are processing issues that make revenue growth over the previous year far, far lower — in the range of only eight MILLION dollars. With just three months left in the state’s CURRENT budgeting year, any NEW spending cuts will likely lead to layoffs in state agencies. Representative Chris Hall of Sioux City is the top-ranking Democrat on the house budgeting committee. “It is hard times and very hard morale for anybody who is working in public service,” Hall says.

Lieutenant Governor Kim Reynolds says the situation is compounded because most state agencies have NOT had a budget boost for the past six years and layoffs may be the only option left if more reductions are required. “There’s just not a lot of other areas that we can cut,” Reynolds says.” We’ll just have to wait to see what the REC says and go from there.”

The Revenue Estimating Conference — the R-E-C — is a three-person board that sets the official estimate of future state tax revenue. Their estimates govern how much state officials may spend. State agencies are already implementing the agreement legislators and the governor made LAST MONTH to cut 118-million dollars in spending, to avoid a deficit.

(Radio Iowa)