Mo. tax revenue 2.7 percent higher than last year
Missouri tax revenue is higher than last year, but a dip in individual income tax collections last month has prompted some concern.
Eleven months through the current budget year, revenue has increased from last year by 2.7 percent to $6.5 billion. However, the state Office of Administration reported Thursday that individual income tax collections were down 1.4 percent from May 2011 to May 2010.
Budget Director Linda Luebbering says the decline in individual income tax collections is causing concern. She says it is inconsistent with what officials thought is an improving economy.
“Relative to last May, there was less income tax being withheld from people’s paychecks…either they were working fewer hours, or possibly, not as many summer jobs have been filled compared to last May, we don’t know exactly why,” Luebbering said.
Revenue from individual income taxes for the entire year is 2.5 percent greater than last year.
For the entire budget year, corporate tax revenue has increased 10 percent and revenue from sales and use taxes is slightly higher.
Meanwhile, Luebbering says portions of next year’s state budget will be withheld, in part to cover storm damage costs from the Joplin tornado and flooding in southern Missouri.
“We’re setting aside $50 million for disaster recovery to cover the Joplin tornado, plus the flooding situations, that’s one reason…the phase-out of the corporate franchise tax was approved, and so we lose some revenue, due to the phase-out of that tax,” Lubbering said.
Luebbering also cited the failure by lawmakers to pass a tax amnesty bill as another reason for withholding spending. She says the exact amount to be withheld is still being determined, but it could be around $90 million.