DES MOINES, Iowa — Iowa's fiscal year ends on June 30, meaning lawmakers have less than a month to craft a budget for next year that takes into account the impacts that the coronavirus pandemic will have on money coming into the state next year.
Senate Majority Leader Jack Whitver, R-Ankeny, said right now, sales tax revenue hasn't taken too big of a hit.
He said that could be because of the stimulus checks mailed out to Americans by the federal government and the increased unemployment benefits going out.
But the stimulus checks were a one-time payment, and the additional unemployment benefits expire next month, so it's hard to predict what the economy will look like in a few months.
"If you don't have that injection of almost $4 billion of additional money, it could impact how much people are out buying products or going out to eat, and that affects our sales tax revenues," Whitver said. "That's just one of probably a dozen things that we have to watch out for and be careful. In addition, income tax is also a concern because this is going to be a tough year for many families. We can't expect to collect nearly as much income tax as we would have in a normal year."
Whitver said budget talks are ongoing.
When asked if there will be cuts in spending or possible tax hikes, Whitver didn't answer directly but said he thinks it is important to not spend every dollar that comes in.
"When revenues went down, we still had a gap where we didn't have to start cutting," Whitver said. "And of course, we got criticized for not spending all the money that we had last year, but I think in hindsight, it was a very wise decision because we're not coming in at the very end of the year, slashing everything. We want to continue that budgeting mindset."
Democrats in both the House and Senate said they are pushing to maintain funding for services in Iowa, especially education.
Both caucuses said they don't want to see any tax hikes.
In fact, Senate Democrats said they'd like to see tax relief reduced for big corporations.