The following editorial was published in the Sioux City Journal on Oct. 11:
Iowa closed the books on fiscal 2019 with an ending balance of $289.3 million, more than double its general fund surplus for the year before.
According to the Legislative Services Agency, tax collections were some $99 million above what was estimated for fiscal 2019 and some $521 million more than the total for the year before.
That’s good news and evidence this state is, largely, in strong fiscal condition.
Still, no one in state government should forget looming uncertainties within the agriculture sector crucial to the economy of Iowa.
As a result, embrace of a conservative approach to the state budget in the next legislative session is warranted. Talk of additional tax cuts (in Cedar Rapids last week, Gov. Kim Reynolds said her administration is assessing whether the state is in position to reduce taxes again next year) and what we anticipate will be calls by some state lawmakers and state agencies for increased spending are, in our view, premature.
On Oct. 7, the Revenue Estimating Conference will issue its October revenue forecast. In December, the REC will issue the report on which the Legislature’s budget will be based. Those reports will paint a clearer picture of what to expect for the balance of this fiscal year.
Even if the REC estimates predict growth, however, Reynolds and lawmakers should exercise caution in the face of stress and unpredictabilities within the agriculture sector.
One of the biggest factors negatively impacting farmers in Iowa is the Trump administration’s continuing trade war with China. Our suggestion to Iowa leaders: For today, put thoughts of tax cuts and spending hikes aside and make ratcheting up pressure on the Trump administration for an end to the China trade fight priority No. 1.