Shutdown Could Cloud Iowa's Otherwise Bright Revenue Forecast

Oct 11, 2013

Credit John Pemble / IPR

Statehouse analysts are giving a cautiously optimistic forecast for modest  growth in the Iowa economy.    But they say that could change if Congress doesn’t act soon to end the federal government shutdown.    

The three-member revenue estimating conference meets periodically to assess the Iowa economy, and make their best guesses on how much money will flow into state coffers.   The conferees  predict that tax receipts will grow this fiscal year by less than 2% which they call steady but not exuberant.   And they’re not too worried that the federal government shutdown will change that.   

The governor’s top budget aide, David Roederer, is on the panel. He says he's not too concerned about what's happening in Washington, D.C.

"I do not think it will go on so long that it will start doing real damage to the economy," he says.  "I don't think  that's in any one's best interest to do that.

But Roederer says state finances would be harmed if the shutdown lasts for more than 30 days.   That’s because the state treasury would have to cover human services programs like Medicaid without reimbursement from the federal government.