State budget-watchers see some encouraging signs that Missouri’s economy is making the slow turnaround. But some outside analysts say the ability of the state to finance its programs and services is a long, long ways from being back to normal.
The Missouri Budget project says state tax collections, relative to the size of the state economy, are at their lowest point in a quarter-century and that general state tax collections are 12 percent lower than they were a decade ago. The Project says the outlook for the next fiscal year is only “less dire”
Another review comes from former state budget director Jim Moody, now a private consultant, who says it’s been a rough decade. He notes the state went through the last quarter of the Twentieth Century without no years of zero revenue growth. But in the first decade of this century, Missouri has had four “significantly negative” years.
He says two-thirds of the state’s general revenue comes from income taxes…which have been hit hard by unemployment. One component of income taxes is capital gains, which are away off in the recession. Sales tax receipts have dropped 230-million dollars in four years, partly because of the economy, but also because the state is not taxing rapidly increasing internet buying..
Moody says things aren’t going to get better until the state fixes the sales tax collection issue. The Missouri Budget Project says we won’t be back to fiscal 2008 levels for five more years.