Capitol Report -- May 25

Morning Has Broken. On Wednesday, May 20, Governor Reynolds issued a new proclamation to open up more businesses and activities in the state. Movie theaters, zoos, museums, wedding reception venues and swimming pools were reopened on Friday, May 22. Cabins, restrooms and shower buildings at Iowa state parks opened up on Friday.

The proclamation also allows bars and other establishments that sell alcohol to re-open on Thursday, May 28. School-sponsored summer activities, like baseball and softball, and learning, may resume on Monday, June 1. All are subject to social distancing and capacity restrictions. Casinos, amusement parks, playgrounds and bingo halls are still closed under a proclamation that is set to expire on Wednesday, May 27. The Governor said she would make more announcements this week about additional re-openings and eased restrictions.

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One is the Loneliest Number, Two (Years) can be as Bad as One. The Revenue Estimating Conference (REC) is scheduled to meet on Friday, May 29, to update policymakers on the impact of COVID-19 on the state’s finances. The REC last met on March 12 just prior to the legislature suspending the 2020 session and the Governor ordering the closure of most businesses in the state, all in an effort to mitigate spread of the coronavirus. Among the projections the REC has been asked to provide is the amount of state tax revenues Iowa can expect to receive from mid-March to July 31, the end of the state’s fiscal year.

The REC’s estimate will be complicated by the fact that many tax filing deadlines were extended to the end of July. The delay in tax due dates has resulted in a reduction of state tax revenues of more than 30 percent (-$555.7 million) for the period March 19 through May 21, as compared to the year before, according to a report issued by the Legislative Services Agency last Friday. The LSA report concludes that “It will not be until the delayed tax payments have been deposited that the economic impact of the recent [COVID-19] events can be reasonably calculated.”

In an interview with Cedar Rapids Reporter Rod Boshart this past week, State Budget Director and REC Chair Dave Roederer commented that making a projection on the state’s economic future this coming Friday will be challenging. He said, “One of the factors that is new this time around is the fact that we have an unknown issue out there that is hard to quantify, and that’s called angst or fear. How soon will people feel that they can get back into their normal way of life, and that is one of the things we are struggling with.”

Governor Reynolds and the legislature will use the REC’s revised revenue projections to make adjustments to the proposed fiscal year 2020 and 2021 state budgets.

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Final Words. “I wanna go out, but I wanna stay home.” No truer or more poignant words could be used to describe how many are feeling at this time of continuing uncertainty. The words are taken from a song by a young Australian singer-songwriter, Courtney Barnett, titled Nobody Really Cares if you Don’t Go to the Party. And even if they did care, you still can’t go anyway.