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flag Iowa faces a $375 million revenue shortfall in 2026 due to tax cuts, job losses, and weak exports, sparking debate over fiscal stability.

flag Iowa’s state revenue is projected to drop 9% in fiscal year 2026, falling to $8.1 billion, due to tax cuts, rising unemployment, weaker soybean exports, and economic uncertainty. flag The Revenue Estimating Conference cited a $375 million revision from earlier forecasts, with Democrats warning of a growing fiscal crisis and a “billion-dollar hole” in the budget, while Republicans defend the state’s strong reserves—over $6 billion—and argue tax cuts are boosting economic growth. flag Governor Kim Reynolds and GOP leaders say the state remains financially stable and plan to use the Taxpayer Relief Fund to offset the shortfall, with property tax reform a top priority ahead of the 2026 legislative session.

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