Unpredictable Revenue Forecasts Highlights Importance of Infrastructure Investment

The Iowa Revenue Estimating Conference, a three member board tasked with determining how much money the state can foresee coming into the state treasury, has announced yesterday that general fund revenue estimates have shrunk for the current year. The causes of the revenue drop are numerous, as The Des Moines Register explains:

While many revenue concerns cited by the panel related to a drop in farm income, experts said a host of other factors — including worries about the global economy, uncertainty regarding Iowa’s manufacturing sector and a loss of state sales taxes on goods purchased on the Internet — were also considerations in their estimates.

 While the revised estimates don’t necessitate spending cuts at the moment, they do serve to highlight the need for diversification of the way that states like Iowa earn revenue. The agricultural sector, which has forced the revision, will always be a significant part of the revenue stream, but Iowa should also consider the impact that expanded energy infrastructure can bring.

The Dakota Access Pipeline, a project estimated to generate about $50 million during construction will net the state around $27 million. Additionally, Dakota Access recently reported that over $200 million has been set aside to purchase construction equipment from Vermeer and John Deere, two Iowa-based businesses. Projects like these can not only make energy transportation safer and more cost effective, but can be revenue drivers as well.

Read more about this story from The Des Moines Register here.