The Iowa Department of Revenue estimates individuals and corporations in Iowa will pay 33 MILLION dollars MORE in state taxes this year due to federal tax law changes. That estimate is three times higher than the department’s January guess. It’s welcome news for officials struggling to ensure the CURRENT state budget remains in the black. Dave Roederer is the governor’s budget director.
Iowans are projected to pay one-point-eight BILLION dollars LESS in federal taxes this year. However, the estimated INCREASE in STATE tax revenue is due to a deduction Iowans get on their state income taxes. It’s a deduction for what they’ve paid in FEDERAL taxes. The Iowa House and Senate are considering budget-cutting plans to deal with lower-than-expected tax revenue in the current year before starting to develop a state spending plan for the fiscal year that begins July 1st. Roederer helped draft the state government spending proposals Governor Reynolds submitted to legislators in January.
Reynolds and Republicans in the legislature have signaled they want pass a tax cut package yet this year. It would affect the income taxes Iowans pay the state in 2019.
