DES MOINES, Iowa — The Revenue Estimating Conference met on Thursday morning at the Iowa Statehouse to look at projected revenue goals in the state for fiscal years 2025 and 2026.

Lawmakers had $9.75 billion in state revenue in FY24, with projections at $9.15 billion in FY25 and $8.73 billion in FY26. The reduction in state revenue comes from the income tax cuts passed over the last several sessions. A 3.8% flat income tax takes effect on January 1, 2025, which will drop state tax revenue more.

Iowa’s conservative budgeting practices and commitment to shrinking the size and scope of government have once again put our state in a strong financial position just as our low, flat income tax rate of 3.8% takes effect next year for every Iowa taxpayer.

Iowa Governor Kim Reynolds, (R)

Our tax cuts, which return funds to hard-working Iowans, are driving the reduction of state revenue — but for the tax cuts, Iowa would see revenue growth. And yet, unlike so many states, Iowa is in a great financial position in no small part because of our spending discipline.

Kraig Paulsen, Iowa Department of Management Director

Reynolds in her statement also added that these projections were expected, listing the balance of $2.05 billion in the general fund, $961.2 in reserve funds and $3.75 billion in the taxpayer relief funds.

Democrats in both chambers are frustrated with the projections due to the amount of dollars allocated to educational savings accounts.

The Reynolds economy is not working for most Iowans and today’s revenue projections prove it. Every week Iowans are experiencing more layoffs and rising costs while corporations make more money and get endless tax breaks.

State Representative Timi Brown-Powers, (D) from Waterloo

$300 million and counting toward vouchers, and yet the Reynolds Administration has failed to provide even the most basic information about where our tax dollars are going or how our children are being served. We have far too many unanswered questions. Gov. Reynolds must be transparent with Iowa’s taxpayers.

Senator Janet Petersen, (D) from Des Moines

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