State officials are predicting tax PAYMENTS to the State of Iowa will drop by a little less than one percent during the current budgeting year due to previously approved tax CUTS. Iowa Department of Management director Kraig Paulsen is the governor’s top budget advisor.

The top state income tax rate was reduced 10 months ago and there will be another reduction January 1st. Corporate income taxes have been cut, too.

Jennifer Acton of the Legislative Services Agency says global turmoil as well as Iowa drought conditions and the state’s aging workforce are concerns.

Acton and Paulsen are members of the state’s Revenue Estimating Conference, which met late this (Thurday) morning. The group predicts state tax collections in the NEXT state fiscal year will drop one-point-eight percent.

Senator Janet Petersen, a Democrat from Des Moines, says the report shows state tax revenue won’t be able to keep up with the corporate tax cuts and private school spending Governor Reynolds has approved. House Democrats say Iowans are tired of endless tax cuts for corporations and the super rich.

The Republican who leads the House Appropriations Committee says lawmakers need to keep lowering the tax burden in a responsible way to help Iowans struggling with wages that aren’t keeping up with inflation.