REC Projects Substantive Growth for FY22; FY21 Remains Steady
December 17, 2020
Last Friday, the Revenue Estimating Conference (REC) met for its December meeting and is projecting a positive outlook concerning Iowa’s budget moving forward. The REC, a three-person panel that provides budget recommendations to the Legislature and Gov. Reynolds, forecasts a budget of $8,265.7 billion for Fiscal Year (FY) 2022. This is 3.7% or $296.4 million more in revenue than the current projection for FY21. The panel also increased its budget estimate for the current fiscal year, going from $7,911.7 billion in October to $7,969.3 billion or an increase of $57.6 million in December.
Gov. Reynolds must use the December REC estimate to formulate her budget recommendations for the upcoming fiscal year, while the Legislature must use the lower estimate between December and the upcoming REC estimate in March. Iowa has had one of the most resilient budgets and economies in the country since COVID-19 and government orders shut down the economy in March. This is largely due to the governor deeming approximately 80% of Iowa’s workforce as essential, prudent budgeting by the Legislature, the $1.25 billion block grant Iowa received via the CARES Act and a diversified economy.