DES MOINES, Iowa (AP) — State revenue continues to grow but at a slower pace than a few years ago, meaning lawmakers will need to show spending restraint when preparing next year's budget, Iowa budget experts said Friday.
Members of the Revenue Estimating Conference said state revenue is expected to hit $7.19 billion in the next fiscal year, a 4.9 percent increase over the current year.
State law requires that Gov. Terry Branstad and the Legislature use the REC's December estimate to draft the next fiscal year's budget, unless the following March estimate is lower, in which case lawmakers would have to use that lower estimate.
Department of Management director David Roederer, one of the three members of the panel, said the figure indicates that Iowa's economy is showing strength but there are signs of slowing down.
He cited the agriculture industry, where farmers are expected to harvest record corn and soybean crops but prices have been low and for many farmers below the cost of production. That likely means farmers will not spend money on equipment or expand operations in Iowa, the nation's leading corn producer and one of the top soybean growers.
"Things are going pretty well in Iowa. However, with the ag economy being what it is we need to be very cautious because we cannot continue to produce bushel after bushel of corn at a loss and not think that's going to have an impact on the rest of our economy," he said.
"I'm optimistic where Iowa is but I still think there are a lot of cautions out there and I think we should be very careful."