In the Iowa Revenue Estimating Conference (REC) meeting on Thursday this week, The REC members expressed concerns that their estimates may be too high given the unknowns about the economic impact of COVID-19, and if necessary, they would reconvene. The REC reviewed their state revenue estimates made at their December REC meeting and estimated the change in net revenue growth noted by year below. See the Iowa Department of Management report at https://www.legis.iowa.gov/docs/publications/BL/1133254.pdf.
The REC revised its December 2019 estimates by increasing the FY2020 State General Fund receipts by $76.1 million for a total estimated receipts of $8,090.7 million. This is a 3% increase over FY2019.
The REC revised its December 2019 estimates of a 2.9% increase in FY2021 to a 1.8% increase slightly lowering the FY2021 State General Fund receipts by $12.3 million for a total of $8,236.7 million.
The $76.0 million increase in FY2020 state revenue will be added to the FY2020 ending balance, and following the Legislature’s FY2020 supplemental appropriations, the surplus carried forward and available for FY2021 would be approximately $308.0 million as noted in the right hand column in Table 1 below. Given that the Legislature will not appropriate funds above the estimated state revenue, there would be an ending balance of approximately $462.0 million if the FY2021 State Budget were set at the Governor’s recommended level. This ending balance would be in addition to the estimated $824.0 million in the state’s “rainy-day funds” at the end of FY2021 as noted in Table 6 below to the right. We thank WITCC’s Legislative Liaison Steve Warndstadt for sharing these tables from the Legislative Services Agency’s (LSA) analysis of the Governor’s State Budget. See https://www.legis.iowa.gov/docs/publications/LAGR/1126868.pdf
The December REC meeting sets the ceiling for the Governor’s proposed State Budget and the March meeting sets the ceiling for the Legislature’s State Budget. See https://dom.iowa.gov/faq/what-revenue-estimating-conference.