Decline in revenue numbers called ‘concerning,’ budget director says time still needed for a more accurate forecast

  

JEFFERSON CITY, Mo. – The latest revenue numbers for the state have been released, and some are calling them “concerning.”

State Budget Director Dan Haug announced this week that fiscal year-to-date net general revenue collections decreased 6.8 percent compared to 2018, from $1.37 billion last year to $1.27 billion this year.

That decrease is of some concern to budget hawks, as the net general revenue collections for August 2018 decreased 7.8 percent compared to those for August 2017, from $792.3 million last year to $730.5 million this year. 

Here’s the breakdown of gross collections by tax type:

Individual income tax collections

  • Decreased 5.0 percent for the year, from $980.2 million last year to $931.7 million this year.
  • Decreased 1.7 percent for the month.

Sales and use tax collections

  • Increased 3.8 percent for the year, from $374.4 million last year to $388.7 million this year.
  • Decreased 0.2 percent for the month.

Corporate income and corporate franchise tax collections

  • Decreased 5.4 percent for the year, from $28.3 million last year to $26.8 million this year.
  • Increased 4.5 percent for the month.

All other collections

  • Decreased 20.8 percent for the year, from $73.5 million last year to $58.2 million this year.
  • Decreased 28.7 percent for the month.

Refunds

  • Increased 46.0 percent for the year, from $89.9 million last year to $131.3 million this year.
  • Increased 108.1 percent for the month.

“We certainly are concerned that revenues are down, but until you see what happens with September revenues (because September includes the quarterly payments from both the corporate income tax and the individual income tax) it’s really hard to get a trend, there’s no real significant due dates in July or August to sort of set a trend,” Haug said.

He said they’ve been monitoring the revenues closely and working with the Department of Revenue to evaluate what is happening in the tax data, but noted that with the new tax changes, thanks to the federal tax cuts and the results of SB 509, have resulted in changes, making it difficult to figure out what exactly is moving the numbers.

“We’re not going most likely make any budget actions until we see what the September data is and we get a quarter of the year in,” he added. “It’s certainly not a time to panic, but it is something we need to monitor and see if it’s going to be a trend going forward. If it is, then we may have to take some actions in the future.”

Haug also noted that one thing that helps the state is a strong finish in the last fiscal year. He said that because of that, the state can decline 0.5 percent from the total collections in FY 2018 to meet what is needed to fund the budget.

“We can decline half a percent and still hit our estimate,” he said. “Even though we’re down 6.8 percent right now, the hole is not as big as it would appear, because what we are actually trying to hit is not as big as it has been in previous years as far as the growth rate. That gives us a cushion and a little more time to try and figure out what’s going on.”

Benjamin Peters is a reporter for the Missouri Times and Missouri Times Magazine, and also produces the #MoLeg Podcast. He joined the Missouri Times in 2016 after working as a sports editor and TV news producer in mid-Missouri. Benjamin is a graduate of Missouri State University in Springfield. To contact Benjamin, email benjamin@themissouritimes.com or follow him on Twitter @BenjaminDPeters.