Robin Opsahl covers the state legislature and politics for Iowa Capital Dispatch, where this article first appeared.
The Iowa Revenue Estimating Conference on October 16 lowered its estimates for the state’s tax revenue in fiscal year 2026 by $375 million compared to predictions from March of this year.
The panel, chaired by Iowa Department of Management Director Kraig Paulsen, approved changes to the revenue estimates in light of recent economic shifts and tax policy changes like the federal “One Big Beautiful Bill Act,” the budget reconciliation measure President Donald Trump signed in July. The nonpartisan Legislative Services Agency reported the state’s revenue in fiscal year 2025 was $198 million below the panel’s March forecast because of the impact of federal tax law changes.
Paulsen said the new REC estimates account for both the reduced state revenue due to federal tax policies, the impacts of the state’s 2024 acceleration of previously approved income tax cuts, as well as economic factors like rising unemployment rates and China’s move to import soybeans from South American countries instead of U.S. producers.
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