CHICAGO — Iowa's revenue estimating panel has finalized its projections for the next budget year offering numbers on par with its December report.
The three-member Revenue Estimating Conference on Thursday said the state can expect revenues of nearly $6.7 billion in the current fiscal year and nearly $7 billion for fiscal 2015 beginning July 1. The conference's December figures are used to craft the budget and the March figures allows the state to complete work on Gov. Terry Branstad's proposed budget.
Conference members said the state economy is improving but they have concerns over the impact of lower corn and soybean prices on the farm sector as well and the impact of commodity prices.
"Iowa's economy continues to move forward at what I would call a steady pace, not a rapid pace but not an anemic pace, either," said conference member David Roederer, director of the Iowa Department of Management. "Employers are reluctant to expand and hire people and until that sentiment changes we're wise to be cautious as to what's going to happen with the economy."
State Auditor Mary Mosiman last month praised the proposed budget's decreasing reliance on one-time revenues in her office's review of the spending plan.
"The Fiscal Year 2014 adopted budget reduces the reliance on one-time monies to just $36 million - a huge improvement over past years. The governor's Fiscal Year 2015 proposal further reduces the amount to $29 million," she said.
She highlighted several issues that pose future challenges including a potential underfunding of Medicaid by $19 million.
Salary and benefit cost increases are not separately funded in the proposed budget, which means agencies will have to absorb any increased costs within their existing appropriations. "If this practice continues without offsetting agency efficiencies, these salary and benefit cost increases could affect the level of service agencies can provide," she said.
"There will be considerable pressure on revenues and spending in Fiscal Year 2015 and beyond," Mosiman said. "The state is essentially an equal partner with the federal government in terms of delivering services to Iowans. As the federal government makes its fiscal decisions, we can reasonably expect a change in Federal dollars coming to the State. When that happens, we need to be prepared."