State Projects Revenue Growth for 2027 Despite Billion-Dollar Deficit
The forecast reflects slower tax revenue after recent income tax cuts, while lawmakers plan to keep using reserves to cover the shortfall.
- On Friday, Oct. 16, the Revenue Estimating Conference projected Iowa will generate $8.54 billion in revenue for fiscal year 2027, a 2.8% increase, but the state still faces a $1.1 billion deficit against its $9.65 billion budget.
- Republican-Backed income tax cuts, which reduced rates to a flat 3.8% beginning in 2025, created revenue shortfalls; the state plans to bridge the gap using the Taxpayer Relief Fund and ending balance.
- Iowa Department of Management Director Kraig Paulsen said the state remains in "an extremely strong cash position" with $4.6 billion cash on hand; Common Good Iowa Executive Director Anne Discher countered that current practices disadvantage schools and health care.
- Democrats criticized budget management ahead of the November 3 election, with Rep. Megan Srinivas, D-Des Moines, calling the deficit "unsustainable pace," while Republicans defended the outlook as resulting from pro-growth policies.
- Fiscal year 2028 projections anticipate $8.83 billion in revenue, a 3.4% increase; officials monitor persistent inflation and tariff impacts as the state prepares for a new administration following the election.
14 Articles
14 Articles
Fiscal picture improves slightly for state of Iowa
DES MOINES — Iowa's fiscal health looks marginally better than it did earlier this year, but the state still faces a billiondollar deficit and economic warning signs continue to loom, members of the state's nonpartisan fiscal projection panel said Friday.
Sioux City Journal
Iowa’s fiscal picture improves slightly, but budget deficit remains
The three-member Revenue Estimating Conference updated its projections to estimate the state will collect $8.54 billion in total revenue during the 2026-27 state budget year that started July 1.
Iowa revenue forecast improves as tax collections exceed expectations
DES MOINES, Iowa – The Revenue Estimating Conference updated its projections Friday for how much money the state expects to bring in over the next two fiscal years. For fiscal year 2027, new general fund receipts are projected to grow to $8.54 billion, an increase of 2.8% over the previous year. In fiscal year 2028, [...]
Cherokee Tribune Ledger News
State revenues projected to increase as Iowa’s billion-dollar budget deficit remains
Iowa is expected to spend over $1 billion more than it raises in revenues in the current fiscal year, the Revenue Estimating Conference found Friday — but Iowa Department of Management Director Kraig Paulsen said this prediction remains in line…
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