Reynolds says Iowa economy remains strong following March revenue estimate

DES MOINES, Iowa – Gov. Kim Reynolds said Iowa remains in a strong financial position following the March 12 meeting of the state’s Revenue Estimating Conference (REC), which reviews state revenue projections used to guide Iowa’s budgeting process.

In a statement released after the meeting, Reynolds highlighted the impact of recent state and federal tax cuts, saying they are benefiting individuals, families and businesses across Iowa.

“Iowa remains in a strong financial position as historic state and federal tax cuts have gone into effect, benefitting individuals and families, businesses, and our state’s economy,” Reynolds said.

However, Reynolds noted that corporate income tax receipts are expected to decline, reflecting national trends tied to changes in federal tax law. According to the governor, corporate tax receipts nationwide have decreased by 23 percent, driven in part by new deductions included in the federal One Big Beautiful Bill Act.

Because Iowa’s tax code aligns with federal tax law, the REC estimates that corporate tax revenues for Fiscal Year 2026 will decrease by $86.8 million compared to the December estimate.

Despite that adjustment, projections for the following year improved slightly. The REC’s consensus estimate increased the projected growth rate for Fiscal Year 2027 from 4.2 percent to 4.4 percent.

Reynolds said the state’s fiscal policies have positioned Iowa to extend the benefits of federal tax changes to residents while maintaining balanced budgets.

“My administration’s fiscal discipline has allowed for extending the benefits of the One Big Beautiful Bill to Iowa taxpayers,” Reynolds said. “As we plan for Fiscal Year 2027, my administration will continue to work to keep spending in check and lower the property tax burden on Iowans.”

The governor also pointed to several economic indicators she said show Iowa’s economy remains strong, even amid national economic uncertainty.

According to third-quarter data from the U.S. Bureau of Economic Analysis, Reynolds said Iowa ranks first in the nation for net earnings growth, 13th for GDP growth, and 17th for personal income growth. She also said wages in Iowa are growing faster than in any other state.

“We’re well positioned to continue building on this momentum and strengthening our state for the next generation of Iowans,” Reynolds said.

The Revenue Estimating Conference meets periodically to update revenue projections used by state lawmakers and the governor to craft Iowa’s budget.