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Government, Politics & Issues

Missouri's dismal budget picture darkens - the numbers are getting worse

This article first appeared in the St. Louis Beacon, March 2, 2010 - Missouri's income in February was down almost 15 percent compared to a year ago -- underscoring why Gov. Jay Nixon announced this week that a major overhaul of state government may be necessary.

According to state Budget Director Linda Luebbering, "the state's general revenue collections for February 2010 decreased by 14.6 percent compared to those for February 2009, from $393.1 million to $335.6 million."

The fiscal year numbers aren't much better -- down 12.7 percent so far for the current fiscal year, which ends June 30, compared to the previous fiscal year 2009. In dollar terms, that means a decline of $610 million.

The numbers are particularly sobering because the last fiscal year (2009) ended up down almost 7 percent compared to the year before (2008), and Luebbering's staff -- along with the Legislature's economic experts -- had predicted that this fiscal year would see a slight improvement of about 1 percent. That's not going to happen.

The continued declines make clear that the bipartisan estimates of 3.5 percent for the 2011 fiscal year, which begins July 1, are way too too rosy. That is why Nixon and Senate President Pro Tem Charlie Shields, R-St. Joseph, may be on the same page. The latter has suggested consolidating some state departments.

The upshot: This fiscal year's income numbers are averaging about 15 percent lower than expected. Add that to the 2009 decline, and the state is seeing its general-revenue income drop by close to 25 percent in just two years -- a decline not seen since the Great Depression, according to some tallies.

The Missouri Budget Project, a nonprofit group that analyzes public spending and advocates certain policies to help low- and middle-income families, is critical of the continued cuts without some action to improve revenues.

“For too long our state has relied solely on cuts to critical state programs – including funding for education, health services and transportation – that benefit Missouri families and our economy,” said Amy Blouin, executive director of the Missouri Budget Project.; “The amount of funding our state brings in continues to decline, but our state budget has been cut to the bone. The only responsible course of action in the face of the state’s continued decline in revenue is a balanced approach that includes measures to grow our state’s budget collections to keep up with the needs of Missouri residents.”

Here's the latest breakdown:

GROSS COLLECTIONS BY TAX TYPE

Individual income tax collections

Decreased 10.9 percent for the year, from $3.71 billion last year to $3.30 billion this year.

Decreased 8.7 percent for the month.

Sales and use tax collections

Decreased 7.2 percent for the year from $1.27 billion last year to $1.18 billion this year.

Decreased 5.0 percent for the month.

Corporate income and corporate franchise tax collections

Decreased 13.1 percent for the year, from $294.7 million last year to $256.0 million this year.

Decreased 7.1 percent for the month.

All other collections

Decreased 5.5 percent for the year, from $276.7 million last year to $261.6 million this year.

Decreased 15.2 percent for the month.

Refunds

Increased 9.3 percent for the year, from $715.0 million last year to $781.3 million this year.

Increased 1.3 percent for the month.

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