Missouri bringing in slightly less money than expected, but cuts before June 30 unlikely
Public schools and other institutions in Missouri that receive state money likely won’t see any last-minute cuts before the fiscal year ends June 30, budget chief Dan Haug said Friday.
That’s even with the state’s income collections running slightly behind estimates used to craft the current budget.
“While these numbers aren’t necessarily where we’d like them to be, I don’t see any reason to panic at this point,” Haug told St. Louis Public Radio.
Missouri’s Constitution requires that the state budget be balanced when the fiscal year ends, but the state’s latest income numbers indicate a growth of 2.7 percent; the budget was based on an estimated 3 percent increase.
Still, Haug said, Gov. Eric Greitens’ earlier cuts should be enough to keep the current budget balanced. He said his staff will be closely monitoring this month’s final income numbers.
Good times, bad times
Overall, income was down 2 percent compared to May 2016, a drop fueled largely by a 3.6 percent decline in Missouri’s personal income tax collections, which is the biggest source of the state’s income.
Corporate tax income was the bright spot: up 90 percent at about $27 million in May 2017 from $14 million in May 2016. That’s the most significant increase in a year.
Missouri has been experiencing huge drops in corporate taxes because of a business tax break approved in 2015 that has cost the state far more than expected — at least $150 million this year.
Haug said May’s increase in corporate income tax collections could signal that the tax break’s impact has “bottomed out,” though he noted that it may take a couple months to verify whether that’s the case.
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