DES MOINES — State tax collections are returning to normal growth levels, providing evidence that Iowa is recovering from the effects of a national recession that caused state revenues to nose dive and forced budget upheaval in previous fiscal years, officials said Wednesday.
The Legislative Services Agency’s monthly revenue report for November showed state tax collections grew by 5.7 percent, bringing year-to-date growth since July 1 to 2.9 percent over fiscal 2011. However, LSA tax analyst Jeff Robinson said the overall growth in tax collections was about 5 percent when processing factors and a diversion of state gambling profits to cover I-JOBS bonding costs are taken into account.
“Things continue to get incrementally better and as long as that continues, we can consider ourselves recovering nicely,” Robinson said. “We’re definitely through the worst of it.”
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Overall, net receipts through the first five months of the current fiscal year are running $67.1 million ahead of the same period in fiscal 2010, but $48.2 million in racing and gaming receipts that normally would have flowed into the general fund were used to cover the yearly cost of the I-JOBS bonding program. Robinson noted that the proceeds to the general fund eventually will meet the $66 million cap of gambling revenues that are deposited into the general fund before the remaining profits get earmarked for vertical infrastructure needs.
So far this fiscal year, personal income tax collections have grown by
4.8 percent, or $57.6 million, while sales/use tax proceeds grew by 3.5 percent, or $34.8 million, and corporate income tax receipts were up slightly by $2.8 million. Those gains have been offset by declines in judicial revenue, fee collections, institutional payments, inheritance tax receipts and the gaming profits.
Wednesday’s report will be the last before the three-member state Revenue Estimating Conference meets next week to consider whether to revise the current projection of 3.3 percent growth in net state tax receipts for the current fiscal year and
3.6 percent for the fiscal 2012 budget cycle that Gov.-elect Terry Branstad and the legislature will address in the upcoming session.
The REC’s December estimate establishes the basis for the 99 percent spending limitations that budget-makers will work with in formulating the fiscal 2012 state budget.