Suppose you learn at the end of the year that you not only didn’t get that little raise you were expecting but your pay was cut a little bit. However, suppose that little increase you expected was somewhere in the neighborhood of $350-500 million. And that little cut was about $80 million.
That’s the state the state of Missouri is in. The final numbers show state income dropped by a full percentage point in the last fiscal year instead of increasing by four to six percent–the legislature and the Governor couldn’t agree on which figure was right. And it turns out neither was, leading to budget vetoes and withholding actions by Governor Nixon.
State Budget Director Linda Luebbering has put most of the blame on reduced capital gains taxes. But they’re not the only culprits. She says spring sales tax revenue and income tax collections showed some impact of the bad winter. And she says the state is feeling some impact from prior tax cuts. A new corporate tax cut has kicked in.
Luebbering says there are indicators the worst is over. Increased withholding taxes mean more people are working and making more money…and a slight uptick in sales tax collections indicates Missourians are loosening the purse strings.