Don't get snowed by Missouri's sharp increase in state income, budget chief says
This article first appeared in the St. Louis Beacon, March 2, 2012 - Missouri state Budget Director Linda Luebbering warns against getting snowed by the latest state revenue numbers, which show a 15 increase in this February’s growth, compared to February 2011.
Net general revenue collections for February 2012 totaled $398.2 million, compared to February 2011’s $345.8 million.
While February 2012 does indicate that “obviously things are starting to turn around,’’ Luebbering tied some of the sharp increase to a huge blizzard in February 2011 that slowed down the state for at least a week.
(Still, February 2011 wasn’t a total bust – it had a 5 percent boost compared to a year earlier in 2010.)
Luebbering said she is more heartened that the running tallies for the 2012 fiscal year, which ends June 30, also are showing improvement. So far, the fiscal year-to-date net general revenue collections are up 2.4 percent over the last fiscal year -- from $4.44 billion last year to $4.55 billion this year.
That’s an improvement from the last few months and “definitely a sign that we’re starting to see some positive movement,’’ Luebbering said in an interview today.
Individual income-tax collections, for example, are up 3.5 percent for the year, compared to a year ago, while sales tax collections have increased 4.4 percent so far this fiscal year.
Even so, the budget director added, “we’re still shy of where we need to be.”
Luebbering noted that the FY 2012 budget had been based on estimated growth of 2.7 percent, which means that the remaining four months of this fiscal year need to see increases of at least 3 percent to make the target and avoid any last-minute cuts. The state constitution requires a balanced budget.
Corporation tax collections continue to be down, which Luebbering tied to federal tax breaks that result in reduced state taxes.
Luebbering noted that the state has borrowed $150 million from the budget reserve fund “for cash flow purposes, bringing the total borrowed for the year to $225 million.”
The money must be repaid to the fund by May 15.
The economic outlook for 2012 has improved enough that, earlier this week, Gov. Jay Nixon announced that he was releasing $3 million in withheld money for public-school transportation in grades K-12 and $2 million for higher education.
That money, said Luebbering, came from higher-than-expected state income from the lottery. All Missouri lottery proceeds are to go to education.
Nixon is still holding on to $5 million withheld for public-school transportation. The rest of the fiscal year’s performance, including lottery proceeds, will determine whether schools do get that money.
Here’s the latest breakdown of the state’s revenue numbers:
|Change||last year||this year|
|Individual income tax collections||+3.5%||$3.4 B||$3.52 B||+9.8%|
|Sales & use tax collections||+4.4%||$1.20 B||$1.25 B||+18.7%|
|Corporate income &|
franchise tax collections
|-11.9%||$276.9 M||$244.0 M||-34.4%|
|All other collections||-22.2%||$269.8 M||$210.0 M||-13.1%|
|Refunds||-3.9%||$704.2 M||$676.4 M||+3.8%|