Iowa net general fund receipts down $170 million (10.6%) through Sept. 4; income tax cut cited

Eric Richardson, senior fiscal analyst for the Iowa Legislative Services Agency, said in the agency’s August 2025 monthly revenue memo that Iowa net general fund revenue for cash fiscal year 2026 decreased $170,000,000, or 10.6 percent, through Sept. 4 compared with the same period a year earlier.

Richardson told viewers the shortfall so far is driven primarily by a $128,000,000 drop in individual income tax receipts — including a $109,000,000 fall in income tax withholding — tied to the state’s reduction of the individual income tax rate to 3.8 percent effective Jan. 1, 2025. He said corporate income tax receipts were also down $24,000,000.

The presentation also flagged a large swing in the tax suspense account related to the timing of monthly filing due dates. Richardson said a 06/30/2024 due date fell on a weekend, pushing some returns and remittances into 07/01/2024 and creating a roughly $71,000,000 positive balance…