State revenue grows 6 percent in fiscal 2011
July 1, 2011, 6:05 pm
By Rod Boshart/SourceMedia Group News
DES MOINES – State government ended fiscal 2011 on a positive financial note with tax collections finishing the 12-month period June 30 up 6 percent, the state budget officially closing the year with an estimated $479.9 million surplus and state lawmakers authorizing an 11th-hour spending plan on Thursday that avoided a shutdown of government services in the newly commenced budget year.
Friday’s monthly state revenue report indicated the fiscal year ended with tax collections up $329.2 million over a recession-riddled $5.5 billion fiscal 2011 receipts total that was a marked dropoff from normal growth years, said Jeff Robinson of the Legislative Services Agency. The final fiscal 2011 revenue tally was about $54 million, or 1 percent, higher than the revised yearly projection set by the state Revenue Estimating Conference.
While Friday’s report showed "good, solid 6 percent growth," Robinson said Iowa’s employment picture has to improve to sustain the state’s economic recovery, noting that the state’s jobless numbers remain high and the projected REC growth rate for the new fiscal year is 6.2 percent compared to Iowa’s average 4 percent revenue growth.
"For 6 percent growth to continue, I think you’ve got to have better job growth," he said. "It’s disappointing that there’s not better employment numbers."
In a quirk caused by the third-longest legislative session in Iowa history, lawmakers were leaving the Capitol as the yearly budget totals were being tallied. The state tentatively closed the fiscal year with an estimated $436.9 million in reserve balances, although the year’s books won’t be officially closed until September.
The newly approved and implemented state budget set general-fund appropriations at $5.999 billion but in order to keep the overall figure $3 million under the $6 billion mark the Legislature shifted the first $106 million in cigarette and tobacco tax collections to the health-care trust fund that helps finance Medicaid programs – which lowered general fund revenues and appropriations by that amount. Lawmakers also removed the $30 million cap on "performance of duty" funding and shifted the source of money pool under the authority of the Iowa Executive Council from the general fund to the state’s economic emergency fund.
Legislative budget-makers projected that state spending in the new 2012 fiscal year will be about $245 million less than the previous 12-month period and ending balance projected for June 30, 2012, was $264.1 million, which would build the state’s combined reserves to $593.9 million at the close of fiscal 2012.
"I think we’ve got things on the path to sustainability," Gov. Terry Branstad said Friday. "The good thing is we got it done before the end of the fiscal year."
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