10-15-2021 | Blogs, Government & Regulatory, Lobbying & Public Policy

Government Relations Update – 10.15.21

By: BrownWinick


October 15, 2021
REC SUMMARY

The Revenue Estimating Conference (“REC”), comprised of a three-member panel (Kraig Paulsen, Holly Lyons, and David Underwood) met this morning (10/15/21) as part of their standard schedule of meetings to estimate future state revenues. A summary of the information discussed during the meeting is below, along with the attached spreadsheet distributed before the meeting, which contains more detailed revenue information. You can view a recording of the full meeting here.


 
Important to Note: Today’s REC number is purely an estimate. Recall, Governor Reynolds uses the December estimate to prepare her budget. The Legislature is required to use the lower of the December and March estimates for its fiscal year (“FY”) 2023 budgeting.
 
Summary: Iowa’s state revenues grew tremendously over the past year. Specifically, fiscal year 2021 (FY21) actual revenues shot up $870 million over FY20 revenues, which equates to nearly 11% growth. Today’s meeting also shows that revenues for FY22 are estimated to grow by $133.6 million, showing an anticipated 1.5% growth for FY22.  Keep in mind, this estimated 1.5% growth for FY22 is on top of the nearly 11% actual growth of revenues between FY20 and FY21.  For additional background and perspective, I have included the March 19, 2021, December 11, 2020, and October 13, 2020 REC summaries below.
 
General Comments From the REC Regarding Factors Impacting Estimates:
  • In both dollar and percentage terms, fiscal year 2021 growth exceeded any year since at least fiscal year 2001;
  • After FY20’s low rate of growth due to COVID, FY21 was a strong rebound, largely concentrated in the final three months of the FY;
  • General Fund net revenues increased $870 million, or 11% as compared to FY20 and exceeded REC estimated by $737.1 million or 9%;
  • In Iowa, just 2 of the federal stimulus programs pumped $11 billion dollars into Iowa economy since start of recession in 2020;
  • Delta variant continues to disrupt the US economy and slowed 3rd quarter calendar year growth and is expected to inhibit growth through end of year;
  • Iowa’s GDP expanded 7.7% in the second quarter of 2021; 
  • US and Iowa job numbers are below pre-pandemic levels and it could take Iowa longer than the national average, and up to 2 years, to return to pre-pandemic levels;
  • While Iowa unemployment reached a high of 11% in 2020, it is currently at 4.1%, much improved but still behind the 2.9% pre-pandemic levels;
  • Increases in corn and bean prices are good for the Iowa agriculture economy;
  • Iowa’s budget reserves are full and we ended the fiscal year with a large surplus; 
  • While some headwinds are facing the global economy and to a certain extent the Iowa economy, Iowa remains in a strong financial position. 
  • Through last Monday, FY22 revenue is up $80 million, or 5%; 
  • Crops are coming in much better than expected (yields are higher than anticipated); 
  • A brighter and very strong future for Iowa; current revenues are strong and we have a strong foundation to build from, and data shows growth into the future: Sales and use tax receipts are showing remarkable growth at 18%;
  • Workforce participation rates are below pre-pandemic levels and it’s not clear how soon they will return, but clearly room for growth;
  • More jobs openings than those seeking employment – consequently, lots of room to the upside;
  • Real GDP has now surpassed pre-pandemic levels in the state and nationally;
  • Supply chains currently very stressed and only room to grow;
  • Personal savings rate, while receded from highs during the pandemic, still above pre-pandemic levels, which signals significant pent up demand for consumer and business spending;
  • Wage growth is occurring and will continue to grow into the foreseeable future;
  • Inventories are unsustainably low, another pre-cursor to growth; 
  • Exports remain strong;
  • Farmland prices are near record highs;
  • Fuel costs are a concern and rising energy costs could be a drag on growth if not addressed in an appropriate manner.
 
FY22 Revenue Estimate Revised UP from March 2021 Estimate:
  • As a reminder, FY22 ends June 30, 2022. The REC increased its FY22 estimate from the March REC meeting by $548.6 million. This increase equates to projected Net Receipts Plus Transfers of $8,934.2 million, which a reflects 1.5 increase in revenues as compared to FY21.  
 
FY23 Revenue Estimate Revised UP From March 2021 Estimate:
  • As a reminder, FY23 begins on July 1, 2022 and ends June 30, 2023. The REC revised up its March REC meeting FY23 estimate, as measured against the FY22 estimated revenues, by $312.2 million. Consequently, today’s revised estimate means total estimated revenues are $9,074.7 million for FY23, an overall increase of $140.5 million from the FY22 numbers, or 1.6% growth. 
 
[ END OF OCTOBER, 15 2021 REC SUMMARY ]
 
 
March 19, 2021 REC SUMMARY
 
The REC (a three member panel comprised of Michael Bousselot, Holly Lyons, and David Underwood) met this morning (3/19/21) as part of their standard schedule of meetings to estimate future state revenues. A summary of the information discussed during the meeting is below, along with the attached spreadsheet distributed before the meeting, which contains more detailed revenue information.
 
Important to Note: Today’s REC number is purely an estimate. Recall, the Governor uses the December 2020 estimate to prepare her budget. The Legislature is required to use the lower of the December 2020 and March 2021 estimates for its upcoming fiscal year (“FY”) 2022 budgeting.
 
Summary: In short, today’s report shows that revenues for the existing fiscal year (FY21) are estimated to be $8,078.9 million, higher by $109.6 million than estimated during the December 11, 2020 REC meeting. This means there are estimated to be $148.3 million new dollars for FY21 as compared to FY20 (or 1.9% revenue growth). Revenues projected for the upcoming fiscal year (FY22), which starts July 1, 2021, are estimated at $8,385.6 million, higher than the December estimate by $119.9 million (3.8% revenue growth). This means there are estimated to be $306.7 million “new dollars” for FY22 as compared to FY21. Based upon these numbers, the legislature will be required to use the December 2020 estimate given it is the lower of the March and December estimates. For additional background and perspective, I have included the December 11, October 13, May 29, and March 12, 2020 REC summaries below.
 
General Comments From the REC Regarding Factors Impacting Estimates:
  • Since they met in December 2020, more rounds of stimulus checks and other federal assistance have flowed into the state. The impact of the most recent stimulus remains to be seen in Iowa;
  • Unemployment remains well below pre-pandemic levels;
  • There is much pent-up demand for spending, travel, services, and entertainment;
  • There are some concerns about pent-up demand driving up inflation;
  • Iowa’s economy has been remarkably resilient to the covid-19 induced recession, largely because of finance and insurance, agriculture, and manufacturing and these sectors were not as vulnerable to the downturn as travel and leisure;
  • Recent months have seen a slow down in job growth here in Iowa;
  • In the non-farm jobs category, we are currently 77,000 jobs below January 2020; 
  • Iowa’s employment-to-population ratio has been dropping and we are near the farm crisis ratio of the 1980s – in Iowa, it is likely that many of these people are older, retired, or don’t want to work;
  • Corn and soybean prices are higher and it is anticipated they will remain higher throughout the year;
  • Iowa’s budget reserves are full and higher than other states;
  • In discussions with employers, about half of them would hire more people if they could find them;
  • Supply shortages – from building materials to computer chips – is impacting manufacturing in Iowa and potentially puts downward pressure on growth;
  • Prices are starting to rise on steel because of tariffs and new home construction is increasing due to lumber shortages, equating to about a $24,000 increase for the average home;
  • Biden tax increase talks have injected some uncertainty into the economy at a point in time where we didn’t need much more uncertainty;
  • Our land borders with Canada and Mexico are still closed and will be closed for some additional time;
  • Iowa’s economy has been resilient and persistent, and if you look at today’s numbers they show revenue growth for Iowa, year-over-year;
  • KPMG reported that Iowa is among the lowest risk and most resilient economies in the nation coming out of COVID19;
  • Jobs in Iowa exist and unemployment remains low vis-a-vis nation;
  • Stimulus checks will undoubtedly have an impact on sales tax revenues for the state in the near term;
  • Applaud the roll out of the vaccine in Iowa – on April 5th all Iowans will be eligible; and
  • 65,000 jobs are currently listed in Iowa according to the workforce development website.
 
FY21 Revenue Estimate Revised UP from December 2020 Estimate:
  • As a reminder, FY21 ends June 30, 2021. The REC increased its estimate from December 2020 by $109.6 million. This increase equates to projected Net Receipts Plus Transfers of $8,078.9 million, which a reflects 1.9% increase in revenues (or $148.3 million new as compared to FY20). 
 
FY22 Revenue Estimate Revised UP From December 2020 Estimate:
  • As a reminder, FY22 begins on July 1, 2021 and ends June 30, 2022. The REC revised up its FY22 estimate, as measured against the FY21 estimated revenues, by $119.9 million. Consequently, today’s revised estimate means total estimated revenues are $8,385.6 million for FY22, an overall increase of $306.7 million from the FY21 numbers, or 3.8% growth. 
 
FY23 Revenues Estimate:
  • The REC also estimated revenues for FY23. Recall, FY23 begins on July 1, 2022 and ends on June 30, 2023 – 863 days from today. The REC estimated $8,762.5 million or 4.5 % growth for FY23 over the FY22 estimate – totaling $376.9 million new dollars as compared to the FY22 estimated revenues.  
 
[ END OF March, 19 2021 REC SUMMARY ]
 
 
December 11, 2020 REC SUMMARY
 
The REC (a three member panel comprised of Dave Roederer, Holly Lyons, and David Underwood) met this afternoon (12/11/20) as part of their standard schedule of meetings to estimate future state revenues. A summary of the information discussed during the meeting is below, along with the attached spreadsheet distributed before the meeting, which contains more detailed revenue information.
 
In short, today’s report shows that revenues for the existing fiscal year (FY21) are estimated to be $7,969.3 million, higher by $57.6 million than estimated during the October 13, 2020 REC meeting. This means there are estimated to be $38.7 million new dollars for FY21 as compared to FY20. Revenues projected for the upcoming fiscal year (FY22), which starts July 1, 2021, are estimated at $8,265.7 million, higher than the October estimate by $34.9 million. This means there are estimated to be $319.1 million “new dollars” for FY22 as compared to FY21, or 3.7% growth for next year. For additional background and perspective, I have included the October 13, May 29, and March 12, 2020 REC summaries below.
 
Important to Note: Today’s REC number is purely an estimate. Recall, the Governor uses the December 2020 estimate to prepare her budget. The Legislature is required to use the lower of the December 2020 and March 2021 estimates for its upcoming fiscal year (“FY”) 2022 budgeting.
 
General Comments From the REC Regarding Factors Impacting Estimates:
  • FDA final approval is imminent and vaccine rolling out soon; however, roll out is a process and definitely a light at the end of the tunnel, but the tunnel is not short;
  • Continued stimulus will be key to sustaining economy, but stimulus may be delayed until January;
  • Looking at non-farm employment numbers, Iowa is mirroring US economy and gained back 1/2 of the jobs lost during Covid recession. Still below the 2019 number, however, by 75,000 jobs;
  • Iowa employment population ratio has dropped from 69% to 63.5% in last year, indicating that 5.5% have dropped out of the labor force; 
  • Farm income looks very good and better than any year since 2013 and the size of the corn crop is 90% of 2019 and soybean are 100% of 2019 levels;
  • Iowa is strong in industrial manufacturing, finance, insurance, and agriculture. These sectors have fared fairly well during the pandemic, all things considered;
  • Estimates show slow economic recovery over next couple years. Estimate for FY21 calls for slightly negative revenue growth between now and the end of the fiscal year (but need to consider revenues currently in the bank for first 1/2 of year, which allows some growth);
  • Iowa has the 3rd lowest employment rate in the nation, which is great, but still not back to pre-covid levels;
  • Economic fundamentals continuing to show signs of modest strength. Nearly $5 billion dollars in our economy through federal programs has helped those in needs and businesses;
  • Agriculture was challenged prior to the pandemic, then the derecho, which was devastating. But as we’ve come out of this, we’re heading into a profitability area in agriculture. If our current export commitments are fulfilled by our trading partners and if COVID distribution has minimal difficulties, the restrictions will be lifted in various parts of the world, the Ag sector will be on a stronger footing in 2021;
  • Children are occasionally back in school and vaccine arriving in matter of days and ISU had best record in the BIG 12 – all positives that should help with our recover;
  • We know we will come out of this, who would have thought the word positivity could have a negative meaning like it does to the pandemic;
  • The question really is… do we need economists or psychiatrists to help us determine what is going to happen? Because the economics may say one thing, but it’s really going to get down to whether people believe the pandemic is coming to an end and whether they feel secure enough to invest their money into good and services.  
 
FY21 Revenue Estimate Revised UP from October 2020 Estimate:
  • As a reminder, FY21 ends June 30, 2021. The REC increased its estimate from October 2020 by $57.6 million. This increase equates to projected Net Receipts Plus Transfers of $7,969.3 billion, which a reflects -.5% increase in revenues (or $38.7 million new) as compared to FY20. 
 
FY22 Revenue Estimate Revised UP From October 2020 Estimate:
  • As a reminder, FY22 begins on July 1, 2021 and ends June 30, 2022. The REC revised up its FY22 estimate, as measured against the FY21 estimated revenues, by $34.9 million. Consequently, today’s revised estimate means total estimated revenues are $8,265.7 for FY22, an overall increase of $319.1 million from the FY21 numbers.  
 
[ END OF DECEMBER 11, 2020 REC SUMMARY ]
 
 
October 13, 2020 REC SUMMARY
 
The REC (a three member panel comprised of Dave Roederer, Holly Lyons, and David Underwood) met yesterday afternoon (10/13/20) as part of their standard schedule of meetings to estimate future state revenues. A summary of the information discussed during the meeting is below, along with the attached spreadsheet distributed before the meeting, which contains more detailed revenue information. In short, yesterday’s report shows that revenues for the existing fiscal year (FY21) are estimated to be $7,911.7 million, slightly higher (by $35.1 million) than estimated during the May 29, 2020 REC meeting; resulting, however, in a net of $18.9 million fewer dollars for FY21, as compared to FY20. This reduction equates to an estimated -.2% reduction in revenues over the last fiscal year. Revenues projected for the upcoming fiscal year (FY22), which starts July 1, 2021, are estimated at $8,230.8 million, higher than the May 29, 2020 estimate by $31.3 million, equating to a forecasted net increase of $319.1 million “new dollars” for FY22 as compared to FY21, or 4% growth for next year. For additional background and perspective, I have included the May 29 and March 12, 2020 REC summaries below.
 
Important to Note: Yesterday’s REC number is purely an estimate. Recall, the Governor uses the December 2020 estimate to prepare her budget. The Legislature is required to use the lower of the December 2020 and March 2021 estimates for its upcoming fiscal year (“FY”) 2022 budgeting. Thus, the October meeting is more of an assessment of the economy three months into the fiscal year.
 
General Comments From the REC Regarding Factors Impacting State Revenues:
  • Unemployment rates peaked in Iowa in April, at 11%;
  • More than half of the lost jobs have been added back;
  • The unemployment rate one year ago was 2.8%;
  • Crop prices are not doing as well as they were, but the “bottom is not falling out;”
  • Through last week, general fund revenue for the existing fiscal year is ahead by $120 million, or nearly 8% higher as compared to last year thanks to federal stimulus and other factors;
  • Iowa is in a strong financial position given we have a surplus of revenue from FY20;
  • Iowa has the 12th lowest unemployment rate in the nation;
  • In Iowa, there are still help wanted signs everywhere – and these are signs that are new, not just left up;
  • Banking, insurance, and credit unions are strong and an unprecedented $6 billion dollars has been put into our economy; 
  • Supply chain disruptions continue to hold back the economy;
  • 850,000 acres of Iowa crops destroyed due to the derecho; and 
  • The REC members unanimously agreed the State of Iowa is on the rebound and heading in the right direction. 
 
FY21 Revenue Estimate Revised UP from May 2020 Estimate:
  • As a reminder, FY21 ends June 30, 2021. The REC increased its estimate from May 2020 by $35.1 million. This increase equates to projected Net Receipts Plus Transfers of $7,911.7 billion, which a reflects -.2% reduction in revenues (or $18.9 million less) as compared to FY20. Put differently, as compared to FY20 actual numbers, this updated estimate reflects a projected decrease of $18.9 million in revenues for FY21 as compared to actual FY20 revenues.
 
FY22 Revenue Estimate Revised UP From May 2020 Estimate:
  • As a reminder, FY22 begins on July 1, 2021 and ends June 30, 2022. The REC revised up its FY22 estimate, as measured against the FY21 estimated revenues, by $31.3 million. Consequently, yesterday’s revised estimate means total estimated revenues are $8,230.8 for FY22, an overall increase of $319.1 million from the FY21 numbers.  
 
[ END OF OCTOBER 13, 2020 REC SUMMARY ]
 
 
MAY 29, 2020 REC SUMMARY
 
The REC (a three member panel comprised of Dave Roederer, Holly Lyons, and David Underwood) met yesterday afternoon (5/29/20) at the request of legislative leadership and Governor Reynolds to reconsider the REC’s March 2020 revenue estimate given the impact of COVID-19 on state revenues. A short summary of the information discussed during the meeting is below, along with the attached spreadsheet distributed before the meeting, which contains more detailed information. In short, yesterday’s report shows that revenues for the existing fiscal year (FY20) are $150 million lower than the March 12, 2020 estimate; resulting in $82.4 million “new dollars” in FY20, as compared to FY19, equating to 1.0% growth over the last fiscal year. Revenues projected for the upcoming fiscal year (FY21) are $360.1 million lower than the March 12, 2020 estimate, equating to a forecasted $64.6 million reduction for FY21 as compared to FY20, or -.08% growth for next year.
 
Important to Note: Yesterday’s REC number is purely an estimate and is used by the legislature to develop the upcoming fiscal year’s budget. Recall, the Governor uses the December 2019 estimate to prepare her budget, which was introduced on January 14, 2020 and found here, but has publicly stated she will be submitting a revised budget based upon this REC meeting. The Legislature is required to use the lower of the December 2019, March 2020, and May 2020 estimates for its upcoming fiscal year (“FY”) 2021 budgeting. As explained in detail below, because the May estimate is $360.1 million lower than the March 2020 estimate for FY21, the legislature is required to use yesterday’s estimate.
 
General Comments From the REC Regarding Factors Impacting State Revenues:
  • The virus exacted a tremendous toll in terms of both loss of life and economic impact in Iowa;
  • A considerable portion of the Iowa economy was shutdown for 2 months – a “self induced coma;” 
  • We went from nearly full employment, to just the opposite, in a matter of weeks and unemployment is now at its all time high since the Great Recession;
  • The 11 year economic expansion is over as a result of the COVID-19 pandemic and the resulting government actions to stem it’s spread;
  • Yesterday’s projections are based upon “no significant return of the virus;”
  • The REC is looking at relatively limited data on the impact of the virus (approx. 8 weeks) given how reporting occurs for certain revenues on a monthly basis, but other revenues on a quarterly basis;
  • In an ordinary year, April is when the State receives the most taxpayer money, but this year it is not because of the delay of income tax and other payments to July 31st. This changes makes it difficult to predict revenues for FY20 until late August;
  • Federal relief of $2.2 billion has flowed into the state in various forms (e.g. unemployment benefits, loans, loan guarantees, grants, and the payment protection program);
  • Another $300 million from the federal government is expected and another $2.6 billion has been paid to Iowans in other forms; 
  • Iowa’s financial reserves are strong and in a better position than most states; 
  • Economic fundamentals were strong going into the pandemic, and while bruised and battered, Iowa’s fundamentals are still strong;
  • Agriculture was being challenged prior to the pandemic, but there have been more obstacles thrown towards agriculture as a result of the pandemic; 
  • Land prices are still strong;
  • China is still going forward with the treaty; USMCA is still working; and the trade agreement with Japan is still in place;
  • Financial institutions, banking, credit, and insurance institutions are all strong;
  • The manufacturing sector has experienced a temporary slow down and reducing some of their plant output to accommodate appropriate distancing;
  • DOM is more optimistic, Director Roederer stated: “Economically, I believe we are on the upswing.”
 
FY20 Revenue Estimate Revised DOWN from March 2020 Estimate:
  • As a reminder, FY20 ends June 30, 2020. The REC DECREASED its March 2020 estimate for FY20 by $150 million. This decrease equates to projected Net Receipts of $7,941.2 billion, which reflects 1% growth in FY20 as compared to FY19. In terms of “new” dollars, as compared to FY19, these numbers reflect a projected increase of $82.4 million in revenues for FY20 as compared to actual FY19 revenues.
 
FY21 Revenue Estimate Revised DOWN From March 2020 Estimate:
  • As a reminder, FY21 begins on July 1, 2020 and ends June 30, 2021. The REC revised DOWN its FY21 estimate, as measured against the FY20 estimated revenues, by $64.6 million. Consequently, yesterday’s revised estimate means total estimated revenues are $7,876.6 for FY21, an overall DECREASE of $360.1 million from the FY21 numbers estimated during the March 2020 meeting. For budgeting, and as mentioned above, the legislature is required to use the lower of the March 2020 and May 2020 estimates, which means the legislature is required to budget off of yesterday’s estimate of $7,876.6 million for its upcoming FY21 appropriations and budgeting process.
 
FY22 Revenues Estimate:
  • The REC also estimated revenues for FY22. Recall, FY22 begins on July 1, 2021 and ends on June 30, 2022 – 762 days from today. The REC maintained the same estimated 4.1% growth for FY22 over the current FY21 estimate, which equates to revenues of $8,199.5 billion, or a $322.9 million dollar increase over yesterday’s revised FY21 estimates. Note, yesterday’s estimate for FY22 is $374.9 million lower than the REC’s March 2020 estimate for FY22. 
 
[ END OF MAY 29, 2020 REC SUMMARY ]
 
 
MARCH 2020 REC SUMMARY
 
The REC met yesterday morning (3/12/20) at the Capitol in Des Moines. A short summary of the information discussed during the meeting is below, along with the attached spreadsheet handed out during the meeting that contains more detailed information. In short, yesterday’s report shows that revenues for the existing fiscal year (FY20) are $231.9 million higher than the prior fiscal year (FY19), equating to 2.0% growth over the last year, and revenues projected for the upcoming fiscal year (FY21) continue to show growth: estimating $146 million in new revenues for FY21 as compared to FY20 estimates, equating to 1.8% growth for next year.
 
Important to Note: Yesterday’s REC number is purely an estimate and is used by the legislature to develop the upcoming fiscal year’s budget. Recall, the Governor uses the December 2019 estimate to prepare her budget, which was introduced on January 14, 2020 and found here. The Legislature, however, is required to use the lower of the December 2019 and March 2020 estimates for its upcoming fiscal year (“FY”) 2021 budgeting. As explained in detail below, because the March 2020 estimate is $12.3 million lower than the December 2019 estimate for FY21, the legislature is required to use yesterday’s estimate. Finally, given the current uncertainty in financial markets across the globe, the REC made clear it reserves the right revise its estimates based upon future economic realities.
 
General Comments From the REC Regarding Factors Impacting State Revenues:
  • Currently, Iowa has a stable and slowly growing economy. Nonetheless, the stock market drops, interest rate swings, and the price of oil, among other considerations relative to COVID-19, cannot be ignored; 
  • At this time, COVID-19 does not warrant an expectation of an impending recession in Iowa;
  • Continued growth is likely to be muted a bit by “shocks” outside of the state’s control; 
  • This was the longest economic expansion in history and a turndown was inevitable. “Keep in mind, with all recessions, we don’t really know we’re in one until 6 or more months after the turndown;” 
  • Iowa is adding about 10,000 non-farm jobs a year; and while it may slow down a bit, the REC commented that “this is good growth;” 
  • According to the USDA, crop prices are a bit higher this year as compared to last year and there is a promise of potential additional federal dollars being injected into the markets. Further, trade agreements with Mexico and Canada (where 50% of Iowa’s exports are sent) are strong and the Japan agreement has been negotiated and signed and we’re starting to have the impact going forward; 
  • While China is starting to buy Iowa soybeans, there is concern as to whether they are able to fulfill their requirements;
  • Restricted travel cannot go on for too long. People must be allowed to travel at some point to do business. If we are going to effectively use resources abroad, “phone calls can only do so much;”
  • None of the leading indicators that the state follows are deviating significantly from the last time the REC met;
  • While there is softening in manufacturing in Iowa, it is still strong;
  • Land value are remaining steady, which is a positive and a factor in projections;
  • For small refineries there are waivers that are permitted and these are hurting renewable fuel operations in Iowa; and
  • While the next recession is closer than it was before, it is hard to predict and there is nothing to indicate a pending recession is coming. 
 
FY20 Revenues Revised Up from December 2019 Estimate:
  • As a reminder, FY20 ends June 30, 2020. The REC increased its December 2019 estimate for FY20 by $76.1 million. This increase equates to projected Net Receipts of $8,090.7 billion, which reflects 3% growth in FY20 as compared to FY19. In terms of “new” dollars, as compared to FY19, these numbers reflect a projected increase of $231.9 million in revenues as compared to actual FY19 revenues.
 
FY20 Revenues Revised Down From December 2021:
  • As a reminder, FY21 begins on July 1, 2020 and ends June 30, 2021. The REC revised down its December 2019 estimate for revenue growth in FY21 over FY20 to 1.8% growth, as compared to 2.9% projected in December. Yesterday’s revised estimate means FY21 revenues are estimated to be $8,236.7 million (a reduction of $12.3 million over the December 2019 estimated FY21 revenues). Ultimately, this revised estimate equates to anticipated growth for FY21, over FY20, of $146 million, or 1.8%. For budgeting, and as mentioned above, the legislature is required to use the lower of the December 2019 and March 2020 estimates, which means, the legislature is required to budget off of yesterday’s estimate of $8,236.7 million for its upcoming appropriations and budgeting process.
 
FY22 Revenues Estimated:
  • For the first time, the REC estimated revenues for FY22. Recall, FY22 begins on July 1, 2021 and ends on June 30, 2022 – 839 days from today. The REC estimated 4.1% growth for FY22 over the current FY21 estimate, which equates to revenues of $8,574.4 million, or a $337.7 million increase over FY21.