DES MOINES, Iowa — In one of the several meetings that the state’s Revenue Estimating Conference holds every year, projections show that state revenue is set to decline again.
In FY24, the state brought in $9.75 billion in revenue, FY25 dropped to $8.93 billion, and the projection from the meeting on Thursday shows FY26 at $8.13 billion. That is a decrease of 9% from year to year. While that drop is expected, the state will be operating in a deficit, with funding for the next year sitting at almost $1 billion more than the revenue brought in.
“Is this where we want to be? Is this the most comfortable spot? No. But the state of Iowa is in a good financial condition,” said Director Kraig Paulsen of the Iowa Department of Management. “The revenue decline has been expected since Governor Reynolds signed a 3.8% flat income tax rate bill over three years ago. There were corporate income tax cuts also passed in that same year. The declining revenue has always been a part of the plan, and that is what comes with tax cuts, according to Iowa Republican leadership.”…