Missouri government's revenue collections outpace early projections
This article first appeared in the St. Louis Beacon: Growth may be slowing, but the Missouri’s revenue stream continues to flow heavier than expected.
The latest numbers released today by state Budget Director Linda Luebbering, show that Missouri’s general-revenue collections for the current fiscal year are running at a pace that’s up 8.3 percent overall, compared to a year ago.
That means the state has collected $5.48 billion in general revenue, compared to $5.06 billion at the same point last year. In other words, Missouri has collected $420 million more in FY2013, compared to the same point in FY2012.
The increase, covering nine months of the FY2013 fiscal year, is well above the latest projections of a 4.8 percent increase for the year ending June 30. (Initial estimates, put together a year ago, had predicted an FY2013 revenue increase of only 3.9 percent.)
But here’s the slight downside. Net general revenue collections for March increased 4.6 percent (almost $24 million), compared to March 2012. That’s a lower monthly increase than Missouri officials have seen in recent months – which could indicate that the state’s economy is slowing down.
Luebbering disagrees, saying the lower March increase actually documents the state's improved economy. "We were always predicting from the beginning that we would start to slow down in the second half of the year ... mainly because we're comparing to better months last fiscal year," the budget director said.
The early months of this fiscal year also benefited from one-time payments of millions from A) settlement of the mortgage-lawsuit settlement and B) added federal money for the Medicaid program, also as part of a settlement.
Income tax up, sales tax stagnant
Overall, Luebbering said she is most heartened by the continued increase in the state's income-tax collections, which signals that more people have jobs and are earning more money. The increase is up 5.3 percent for the fiscal year, so far, and 3.9 percent for March. (Luebbering did take note of the lower March number and says that will be watched.)
State officials continue to be concerned about the lagging sales-tax numbers, which are up only 1.2 percent for March -- and 0.8 percent for the fiscal year.
The slow sales-tax growth could be a factor in the Nixon administration's wary monitoring of SB26, which has passed the Senate, which calls for cutting the state's income tax and increasing the sales tax. The upshot would be an estimated annual loss of $660 million in state income, Luebbering said.
(Nixon's other objection, noted by Luebbering, is his belief that SB26 would shift the tax burden to low-income and elderly residents and primarily benefit the wealthy.)
For cash-flow purposes, Luebbering also reported that Missouri’s general revenue fund borrowed $175 million from the budget reserve fund during March -- bringing the total borrowed to $375 million for the current fiscal year. The money has to be repaid to the reserve fund by the constitutional deadline of May 15.
Luebbering said that during the last 11 years, the state has had to borrow temporarily from the reserve fund every March, save one. The reason? Taxpayers owed a state refund generally file earlier than those who must pay money to the state.
The result is that the state is paying out the refunds before it gets most of the tax payments.
Here’s the March breakdown
GROSS COLLECTIONS BY TAX TYPE
Individual income tax collections
- Increased 5.3 percent for the year, from $4.00 billion last year to $4.21 billion this year.
- Increased 3.9 percent for the month.
Sales and use tax collections
- Increased 0.8 percent for the year, from $1.40 billion last year to $1.41 billion this year.
- Increased 1.2 percent for the month.
Corporate income and corporate franchise tax collections
- Increased 4.3 percent for the year, from $302.9 million last year to $315.8 million this year.
- Increased 9.8 percent for the month.
All other collections
- Increased 25.7 percent for the year, from $269.3 million last year to $338.6 million this year.
- Decreased 6.8 percent for the month.
- Decreased 12.4 percent for the year, from $912.0 million last year to $798.9 million this year.
- Decreased 0.7 percent for the month.