Panel says virus reduced $360M from next year’s state budget
DES MOINES, Iowa (AP) — State budget experts said Friday that Gov. Kim Reynolds and the Legislature will have about $360 million less to use for next year’s budget than earlier expected.
The Iowa Revenue Estimating Conference, a group of three people responsible for estimating state revenue, set lower expectations for this year and next after debating the economic impact of the coronavirus pandemic. They agreed efforts to fight the virus had cut into tax revenues but they differed on the severity.
Reynolds and legislative leaders had asked the group to meet and reassess the state’s economic situation.
The group lowered the state revenue estimate for the current year, which ends on June 30, by $150 million to $7.94 billion.
For next year, the group estimated there will be $7.88 billion to work with, about $360 million less a March estimate. The Legislature will resume its session next week.
Earlier Friday, Reynolds said she would allocate $700 million of the state’s federal coronavirus emergency relief money to programs that will help farmers, businesses, homeowners, renters and local governments.
Reynolds said Iowa has received $1.25 billion in federal funding and she will hold $550 million to cover unforeseen coronavirus pandemic expenses and to support the state’s unemployment trust fund.
Of the $700 million she will allocate, Reynolds said $215 million would be spent on a small business relief program that has already helped 4,000 small businesses. Additional funds will help renters and homeowners who haven’t made house payments from being evicted or foreclosed upon, and other money will go to help food banks.
Another $100 million will help farmers, including money for the ethanol industry and to offset the costs of euthanizing livestock that cannot be processed by meatpacking plants.
Reynolds will allocate $125 million to cities and counties to help, $50 million for rural health care providers and $85 million for rural broadband expansion to support Iowans working from home and using remote video learning and health services.
The remaining $125 million will be used for the state’s pandemic response, including purchase of masks and other protective equipment, and to pay state overtime.
State health data indicates 18 additional deaths and 325 new positive cases as of Friday afternoon. Iowa has now had 522 deaths and 18,898 known positive cases.