Federal shutdown forces state furloughs just as Missouri's economic picture is improving | St. Louis Public Radio

Federal shutdown forces state furloughs just as Missouri's economic picture is improving

Oct 2, 2013

This article first appeared in the St. Louis Beacon: Close to 1,000 members of the Missouri National Guard are expected to be furloughed shortly, as a result of the federal government shutdown, state officials announced Wednesday.

The furloughed group represents 70 percent of the 1,400 of the Guard’s "federal technician" staff. Their pay is covered by federal money and affected by the shutdown. The remaining 30 percent are deemed essential and will stay on.

The Missouri Guard announced that its operations, such as drills, also will be limited during the shutdown. The Guard has about 11,500 soldiers and airmen, including those affected by the furloughs.

Missouri Budget Director Linda Luebbering said the Guard is the first wave of what could be furloughs of hundreds of additional state workers whose salaries are covered by federal grants. They would be affected by the shutdown.

The state already has some federal money in the bank that can cover their pay in the short-term, Luebbering said. But an extended federal shutdown would force furloughs, she added.

Aside from the Guard, Missouri employees covered by federal funds are in a number of state agencies and departments, the budget director said.

The state’s economy could be severely hurt, she added, if the Washington standoff broadens into a battle over the federal debt ceiling, which must be raised within a few weeks, or the federal government goes into default.

The uncertainty caused in Missouri by the budget fights in Washington comes as the state has continued to see an improvement in its economy – and the state’s bottom line.

The state government’s general revenue numbers for September, released Wednesday, show that collections had increased 8.3 percent compared to September 2012 — an increase of about $61 million.

For the fiscal year, which began July 1, the state of Missouri is seeing its general revenue increase by 2.7 percent – compared to the same period a year ago. The state’s budget is based on a projected income increase of 3.1 percent, but Luebbering said that the state government can handle a slightly lower increase since there was some savings from the fiscal year that ended June 30.

"We actually had a pretty good month across the board," Luebbering said.

Collections from Missouri income taxes — personal and corporate — were up, as was the state’s sales tax, which generally has been performing below projections for about a year.

The corporate income tax increase of 35 percent in September was a particularly good sign and "definitely means that corporations are more profitable," Luebbering said.

Very little of the state’s general-revenue collections comes from federal money because the state’s federal collections — which runs in the billions of dollars — must be kept in segregated accounts for specific purposes, such as the federal share of the state’s Medicaid spending on health care for the poor and disabled.

Here is Missouri’s general-revenue breakdown for September, as provided by the state’s Office of Administration:

GROSS COLLECTIONS BY TAX TYPE

Individual income tax collections

  • Increased 3.8 percent for the year, from $1.29 billion last year to $1.34 billion this year.
  • Increased 5.4 percent for the month.

Sales and use tax collections

  • Increased 5.1 percent for the year, from $471.0 million last year to $495.1 million this year.
  • Increased 16.5 percent for the month.

Corporate income and corporate franchise tax collections

  • Increased 28.4 percent for the year, from $105.0 million last year to $134.9 million this year.
  • Increased 35.0 percent for the month.

All other collections

  • Decreased 32.5 percent for the year, from $138.0 million last year to $93.2 million this year.
  • Increased 12.7 percent for the month.

Refunds

  • Increased 5.9 percent for the year, from $105.4 million last year to $111.6 million this year.
  • Increased 94.1 percent for the month.