While federal economic progress remains in question, I am happy to report that Iowa state revenue continues to exceed the projections of the Revenue Estimating Conference (REC).
The nonpartisan Legislative Services Agency (LSA) released February’s numbers which show an 8.7% increase in state revenue over last February. The numbers also indicate that annual revenue growth for Fiscal Year 2013 is holding at 9.1%, significantly higher than the 3.3% projected by the REC.
In terms of dollars, this is an additional $355.1 million in revenue in the first eight months; well-exceeding the REC of $204.4 million for the entire year.
Personal income tax receipts also showed significant growth with a 9.9% increase over February 2012 ($31.2 million). During the first eight months of the year, personal income tax revenue almost doubled what the REC estimated - 10.3% actual growth as compared to 5.2% projected growth. Most of the increase is attributed to withholding payments and estimated tax payments, which both saw strong increases for the month.
Sales and Use tax was up again in February, although not as strong as the previous month. The 1.8% growth over February 2012 pulled down the annual growth number to 2.9%, slightly below the REC projected growth of 3.1%.
While corporate income tax is 10.9% ahead of last year, its growth has slowed compared to the strong months at the end of 2012 and remains below the REC’s projection of 13.9% growth.
Overall, we are seeing very strong and promising numbers that we anticipate will continue to exceed expectations. The strong growth pattern in February is simply an impetus to continue working toward future revenue growth.