Monday, December 06, 2010

Budget Projections

Budging the Budget: There's not much that makes me feel less smart than covering a meeting of the Iowa Revenue Estimating Conference. It's numbers, numbers, numbers...not exactly why journalists get into the business. But it seems (at least from what I thought I understood) that Iowa's economy continues to make baby steps of progress. Holly Lyons, the Director of the Legislative Services Agency, said the auto, construction and home industries are picking up. The tax receipts were encouraging enough that the REC bumped up its projections from October by $34 million for the current fiscal year and $85 million the following year. Not time to dance in the streets, but it seems like it's at least a move in the right direction. One thing that floored me was this...Lyons said the country hit its jobs peak in December of 07 and its jobs low in December of 09 (what's with the month of December?). She said at this rate of growth, it would take 7 years to recover all the job losses since 07. Wow.

The REC didn't take into account the impact on state revenue if Congress extends the "Bush tax cuts". Iowans deduct their federal taxes on their state taxes. Lowering federal taxes would mean an additional $147 million in state revenue. That could lessen the pain even more in the future.

However, Lyons pointed out two factors possibly working against a continued economic recovery (definitely a small "r" in that word recovery, huh?): the European money crisis and the political unrest between North and South Korea.

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