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PERSONAL
INCOME UP, STATE REVENUE INCREASES BY $120 MILLION
On
Friday, April 2, Fiscal
Services released the revenue figures through the first three
quarters of the fiscal year. Year-to-date
revenue growth not only exceeded the Revenue Estimating Conference
(REC) estimate but also exceeded FY 04 actual revenue by a
whopping $120 million.
Through
March, total year-to-date general fund revenue increased by $119.1
million, or 3.3 percent compared to FY 03.
March receipts were up 13.9 percent compared to March 2003
receipts.
The
March 19 REC estimate is an increase of $92.5 million, or 1.8
percent compared to FY 03. However,
a large portion of this increase is due to changes in unclaimed
property regulations. Since
proceeds from unclaimed property are not expected until later in
FY 04, revenue is actually higher than it appears. When the
projection for unclaimed property is added to actual year-to-date
receipts, the increase through the first three quarters is $145
million compared to FY 03.
Once
again, personal income tax receipts led the way, with a 16.4
percent increase compared to March 2003.
For FY 04, income tax receipts are $104 million above FY
03. Even sales tax
receipts, which are projected to decrease by 0.9 percent,
increased by 5.8 percent compared to FY 03.
Corporate income tax has only decreased by 6.8 percent
despite being projected to decrease by 18.0 percent.
One
downside is that tax refunds are $33 million ahead of the
projected increase for the entire fiscal year.
However, the Department of Revenue believes that refunds
will be lower than actual refunds from FY 03 over the course of
the remainder of FY 04 and make up some of the difference.
Several
economic forecasters believe that the economy has finally turned
around and the negative revenue trend may have ended.
While high gas prices remain a concern, it does appear that
if spending is held in check
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this
year, increased revenue will be available to deal with built-in
expenditures next year.
SALES TAX ON
UTILITY BILLS
Last
May, the Legislature approved HF 692, which contained a delay in the
phase-out in the residential sales tax on gas and electric utility
bills to offset the income tax cut in that bill.
When the Governor item-vetoed the income tax reduction, he
also item-vetoed the sales tax delay.
The Governor’s action resulted in an increase on the sales
tax on utility bills to 5%, beginning in July of this year.
Earlier
this Session, both the House and Senate Ways and Means Committees
approved bills that corrected the Governor’s action and reinstated
the phase-out of the sales tax on residential gas and electric
utility bills.
On
April 5th the Senate amended and approved their version
of the bill, Senate File 2026.
On
Tuesday, April 6th, the
House Ways
and Means Committee met
and amended the Senate’s action.
The committee amendment strikes the 1% sales tax continuation
and removes the alternative energy incentive fund.
Additionally, the committee amendment reinstates the current
phase-out and permanently eliminates the sales tax on gas and
electric utility bills beginning
January 1, 2006
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NON-PROFIT
K-12 SCHOLARSHIP
ASSISTANCE BILL PASSES HOUSE WAYS
& MEANS
COMMITTEE
Iowans
who contribute money to a nonprofit scholarship assistance
organization for nonpublic K-12 schools would receive a state income
tax credit of up to $500 for a single individual or $625 for a
married couple. The
school tuition assistance organizations would distribute the money
in the form of scholarships, primarily targeted to children from
low-income and moderate-income families.
Contributors would be prohibited from designating their
donations for their own children.
This
bill provides more educational opportunities for
Iowa
children.
Ways
& Means Update
Bills
introduced introduced in
committee
this week:
HSB
726- An Act relating to the excise tax imposed upon gasoline.
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Week
in Review Archives