Robin Opsahl covers the state legislature and politics for Iowa Capital Dispatch, where this article first appeared.
Iowa is expected to spend over $1 billion more than it raises in revenues in the current fiscal year, the Revenue Estimating Conference found on October 16 — but Iowa Department of Management Director Kraig Paulsen said this prediction remains in line with Republicans’ expectations about the initial impacts of income tax cuts.
The Revenue Estimating Conference, a three-member panel, met to discuss the state’s expected economic outlook. When the conference last met in March, the members projected state revenues would decline by 9.3 percent in the fiscal year that ended June 30, 2026, but that the state would see a 4.4 percent increase in revenue growth in fiscal year 2027.
With the books closed for FY 2026, Iowa saw a 7.1 percent decrease in revenue compared to the previous year — a drop of just under $635 million. Jennifer Acton, the director of the Fiscal Services division of the nonpartisan Legislative Services Agency, said this figure means revenues for the year were $205 million higher than the REC projected. But, she said, the year was still significant for being “the third year in a row with a net revenue decrease after 90 straight years of net revenue increases.”
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