State tax revenue continues to lag behind collections a year ago, but there is some emerging good news amid all the gloom.
Net general revenue collections remain down about 12% from last year. The state has collected $5.7 billion so far this fiscal year, compared to $6.4 billion last year. Still, State Budget Director Linda Luebbering sees some encouraging numbers in the latest revenue report. Corporate income tax collections, off more than 8% for the year, increased 7.5% for the month, indicating businesses are beginning to come out of the recession. Individual income tax withholdings are up slightly.
Luebbering says that provides a bit of hope that the Nixon Administration won’t have to cut as much from next year’s budget.
“I think we still will (have to cut), but perhaps this revenue picture will allow those cuts to not be quite as big as they otherwise would need to be,” Luebbering says. “But I would still say at this point it is more likely that we’ll have to do additional cuts next fiscal year than not.”
We’re close to the end of this fiscal year, which is June 30th. On the first of July, the state begins a new fiscal year.
Individual income tax collections, off nearly 9% for the year, were down 6.5% in April. Sales and use tax collections, down 6.5% for the year, were down 3% last month.
Senate Appropriations Committee Chairman Rob Mayer (R-Dexter) was pleased that the state repaid the $520 million taken from the Budget Reserve Fund to get through some thin times. Mayer says the reserve fund is important.
“It’s a positive trait that the state of Missouri has and it’s good that that money was repaid before May 15th, which was the required deadline that it be paid back with interest,” Mayer says.
Neither Mayer nor Luebbering is willing quite yet to say the state has turned the corner, but they’re hopeful.