DES MOINES — Net state tax collections for the 12-month period that ended Wednesday were the lowest in four years and further evidence Iowa struggled through “a really bad recession,” according to a fiscal analyst with the Legislative Services Agency.
The state treasury took in $5.504 billion in tax receipts during the 2010 fiscal year that ended Wednesday, said Jeff Robinson, a senior LSA analyst who prepares a monthly state revenue report. That compared with $5.739 billion for fiscal 2009, $6.059 billion for fiscal 2008 and $5.548 billion for fiscal 2007.
“It was an awful recession and the brunt of it was in the first half of the fiscal year,” he said. Overall, net general fund receipts for the 12-month period that ended June 30 were down 4.1 percent compared with fiscal 2009.
June closed on a positive note with an 8.3 percent increase aided in part by a spill-over of tax payments with state income tax returns that did not get deposited in May. It was one of four positive months in a fiscal year that was painted with a lot of red ink.
Personal income tax receipts — the largest category of state tax collections — were down $94.8 million for the 12-month period as unemployment soared and payroll tax withholdings struggled to stay positive for the year.
Sales and use tax receipts dipped in June and finished down $34.4 million for the fiscal year, while corporate income tax collections posted a double-digit decline last month and finished the year $27.2 million in the negative column compared with the previous fiscal year. The only year-to-year positive categories were judicial revenue aided by a boost in fines and fees, racing and gaming receipts where the cap was increased by $6 million and tobacco tax receipts were up $3 million.
While negative, the fiscal year finished with some positive signs with three of the final four months yielding positive growth but compared to poor months in the previous fiscal year.
“We’re not of a positive trend, we’re just on a better trend,” said Robinson, noting the final revenue total was better than the negative 8.7 percent projected by the state Revenue Estimating Conference when it revised its yearly estimate in March.
“It’s hard to believe that it’s this bad, but other states are worse,” Robinson said. While Iowa is still not out of the recessionary woods, he added, “we’re in a better part of the woods.”
Gov. Chet Culver said the stronger-than-expected revenue finish in fiscal 2010 likely will mean the state budget’s general fund ending balance will total about $275 million, which would be $175 million more than projected when the legislature adjourned in April. Final figures won’t be available until the state officially closes the fiscal 2010 books in mid-September.
“I’m pleased that sound fiscal management coupled with an improving economy are driving these higher revenue figures. There is evidence the economy is heading in the right direction; that said, I understand challenges remain and I am committed to Iowa’s continued economic recovery,” Culver said in a statement.