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Government, Politics & Issues

More income taxes from workers prompt Nixon to allow more state spending

This article first appeared in the St. Louis Beacon, Aug. 3, 2011 - Encouraged by July's 9.1 percent increase in individual income-tax collections, Missouri Gov. Jay Nixon announced this morning that he's releasing $1.2 million for services for the elderly, victims of domestic abuse and children's crisis care.

According to the governor's office: "This funding includes $471,000 for Missouri's 10 Area Agencies on Aging, $356,000 for grants to over 70 domestic violence shelters and $400,000 for crisis care services for children up to age 17 who are at risk of abuse or neglect."

The money was part of $57 million that Nixon had withheld from the current-year budget, out of concern that the General Assembly budgeted too much for the fiscal year that began July 1.

"These are critical programs, and the last ones that he put on the list,'' said state budget director Linda Luebbering. So when the July tax numbers came in, Nixon saw enough good news to restore the money, she added.

Overall, the state's overall tax collections in July were just barely above those of a year ago, with an increase of 0.6 percent -- up to to $452.2 million this year from $449.3 million last year.

But there was a big boost in individual income-tax collections, which were up 9.13 percent in July, compared to July 2010. That means, said Luebbering, that either more people have gotten jobs or those with them are working more hours.

It will likely take a few more months to determine if the hike is permanent, she added.

Otherwise, state tax collections were down in all other categories, including sales taxes. "Just as we're seeing nationally, consumers are just not spending,'' Luebbering said.

Here's the July 2011 breakdown:

GROSS COLLECTIONS BY TAX TYPE

Individual income tax collections

Increased 9.13 percent from $323.9 million last year to $353.4 million this year.

Sales and use tax collections

Decreased 0.9 percent from $127.8 million last year to $126.7 million this year.

Corporate income and corporate franchise tax collections

Decreased 41.5 percent from $26.3 million last year to $15.4 million this year.

All other collections

Decreased 34.6 percent from $35.0 million last year to $22.9 million this year.

Refunds

Increased 4.0 percent from $63.7 million last year to $66.2 million this year.

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