Iowa: Better Revenue Picture but Economic Outlook Remains Mixed

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Yesterday, the Iowa Revenue Estimating Conference improved its forecast for state revenues slightly. In its October estimate, the REC projected a 9% y/y decline in the state’s General Fund receipts in FY2026, but the new December estimate revises that projection to an 8.8% y/y decline. The REC cited the impacts of tariffs and inflation on business and consumer spending as drivers of continued economic uncertainty for the state, but noted that the outlook for the agricultural sector was beginning to improve thanks to recent increases in crop prices and some renewed soybean purchases by China, as well as the recently announced new round of federal support payments.  

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