An Iowa economic report released earlier this month says the state will have to do with less.

"The really won't be any new dollars to expand programs," said Steve Maslikowski, a policy analyst for the Iowa Department of Management, which prepared the report.

"Departments will have to live within their current budgets and redirect resources, as opposed to expecting more resources," he warned.

The findings are outlined in the fifth and latest edition of "Outlook for the '90s: Key Trends for State Government in Iowa," used by departments to plan their budgets.

Much of the revenue from a one-cent increase in the state sales tax, recently approved by Gov. Terry Branstad and state lawmakers, is already spoken for, the report says.

Most of the funds will be used to pay for rising health costs for poor residents of the state and salary raises for state employees. Part of the sales tax proceeds will also be used to pare the state's $338 million deficit, as measured on a generally accepted accounting principle basis.

State officials have said $60 million of the sales tax proceeds will go toward shrinking the deficit in fiscal 1993, which began July 1.

"The near-term outlook for Iowa. while stronger than for most of the nation, is still expected to show very modest growth over the next two years," the report says.

"Continued declines in farm income through 1993 will dampen Iowa's economic growth in other sectors," the paper warns.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.