Missouri's revenue collection shows slower growth, compared to year ago
Amid the continued battle over the fate of a vetoed tax-cut bill, Missouri state government’s latest income numbers show continued growth – but below the projected amount needed to match this fiscal year’s budget.
The state budget office also is continuing to discourage talk about any “surplus.”
The latest monthly report, issued today, shows that net general revenue collections for August were up 2.2 percent compared to August 2012. In real money, that means an increase of $14.6 million.
“August was OK,’’ said state budget director Linda Luebbering, adding that “2.2 percent growth is not terrific.”
That’s because the budget for this fiscal year, which began July 1, is based on projected growth of 3.1 percent.
For the first two months, the state general revenue collections are actually down slightly from a year ago (a 0.8 percent drop), from $1.16 billion last year to $1.15 billion this year.
But Luebbering emphasized that the year-to-date decline is misleading, and tied to the state’s July 2012 one-time receipt of $39 million from the mortgage lawsuit settlement with some of the nation’s major banks.
What’s news is that the state’s slight income increase is driven by higher income tax collections, which were up 4.6 percent for August compared to August 2012.
Meanwhile, the state’s sales tax collections continue their roller-coaster ride. In August, the state’s sales-tax collections were down 1.8 percent from August 2012, a sign that Missourians aren’t spending much money, the budget director said.
The contrast is important because the tax-cut bill that is the marquee issue of next week's legislative session – HB253 – would cut income taxes and, at least for now, increase some state sales taxes. The state’s budget division, while officially not taking sides, has made clear repeatedly that income taxes are the major chunk of Missouri’s general-revenue collections that pay for most services.
Improved income tax collections were the chief reason Missouri ended its FY2013 fiscal year on June 30 with a balance of about $440 million above what had been budgeted. But Luebbering has not called it a “surplus.”
Of that money, most of it was used to bolster the state’s depleted cash-reserves account used for cash flow purposes.
Overall, the state has an amount equal to about 5 percent of its budget in the cash reserves, Luebbering said. That’s about half the percentage that the state traditionally tries to maintain in the fund, which dwindled dramatically during the three years after the economic downturn hit in late 2008.
Separately, almost $50 million of the leftover FY2013 money was transferred into the state’s Rainy Day Fund, as required by law. That fund has about $550 million.
But the August report showed that Luebbering’s office has borrowed $150 million from the Rainy Day Fund to shore up the aforementioned cash-reserve fund. The $150 million has to be transferred back into the Rainy Day Fund by May 15, 2014.
Here’s the state of Missouri’s general-revenue breakdown for August:
GROSS COLLECTIONS BY TAX TYPE
Individual income tax collections
- Increased 2.6 percent for the year, from $764.4 million last year to $784.4 million this year.
- Increased 4.6 percent for the month.
Sales and use tax collections
- Increased 0.7 percent for the year, from $339.4 million last year to $341.8 million this year.
- Decreased 1.8 percent for the month.
Corporate income and corporate franchise tax collections
- Increased 10.3 percent for the year, from $27.9 million last year to $30.8 million this year.
- Increased 10.2 percent for the month.
All other collections
- Decreased 43.3 percent for the year, from $111.4 million last year to $63.2 million this year.
- Decreased 13.7 percent for the month.
- Decreased 15.5 percent for the year, from $84.8 million last year to $71.6 million this year.
- Decreased 16.3 percent for the month.