State revenue is up more than six percent this year, prompting the governor to release another $10 million in school transportation funding.
Fueled by strong growth in corporate and individual income taxes as well as a slight uptick in sales tax collections, state revenue has grown 6.3%.
State Budget Director Linda Luebbering says the brighter revenue picture made Governor Nixon comfortable enough to release another $10 million to offset the cost of running buses in local school districts.
“Since we’re a little bit ahead, the first place that the governor wanted to provide more money was to schools, and so he’s providing this additional ten million, because of that slightly better than anticipated news,” Luebbering tells the Missourinet.
Individual income tax collections have grown three percent. Totals so far this year have grown from $2.88 billion last year to $2.96 billion this year. Individual income might be on the rise again, but consumers remain cautious about spending. Even though sales tax revenue spiked in January, it is up only 1.4% for the year, totaling $1.05 billion this year compared with $1.04 billion at this time last year. Corporate income and corporate franchise tax collections, way down the past couple of years, have jumped 7.8%, from $245.3 million last year to $264.4 million this year.
Luebbering remains cautious, because tax refunds decreased by more than 46% in January and are down 16% on the year. The state has sent out $427.4 million in tax refunds so far this year, compared with $508.7 million at this time last year. Luebbering says that has kept the governor from releasing more of the money he withheld from schools.
“At this point I would say there’s no expectation that we would be releasing any more (school transportation money), but we’ll watch it every month and see how it goes,” Luebbering says. “But at the moment, we’re very cautious, because there is a little bit of positive news, but because of how shaky the economy and our revenues have been we just have to watch it closely.”
The governor in Missouri has the power to withhold money appropriated by the legislature if state revenue falls short of expectations. Nixon withheld $70 million in school transportation money in the Fiscal Year 2011 budget, fearing state tax collections wouldn’t meet the expectations upon which the legislature built the budget. Lawmakers have become increasingly vocal that tax collection growth has been sufficient for the governor to release the money. Nixon earlier released $7.5 million. Luebbering says it’s too early to tell whether any or all of the $52.5 million in school transportation money still being withheld will be released.