This article first appeared in the St. Louis Beacon, April 4, 2012 - Missouri state budget director Linda Luebbering, who gets paid to check the fine print, has some concerns about March’s generally decent state income numbers.
March’s revenue collections, from taxes and other sources, were up about 3 percent compared to March 2011. While a fraction of February 2012’s 15 percent jump over February 2011, the overall March number does send a signal that the state’s economy appears to be gradually improving.
But Luebbering notes that the year-to-date increase for this fiscal year (FY2012) of 2.5 percent remains slightly behind the projected 2.7 percent increase used last year to put together the budget.
And she’s also a little concerned that the March sales tax collections were down slightly, by half a percentage point, compared to a year ago. That’s particularly noteworthy since March 2012 saw much better weather than March 2011. In theory, better weather should make the public more inclined to shop.
On the upside, Luebbering notes that individual income tax collections continued to increase slightly in March – a sign of new jobs or higher pay.
But on the downside, corporate tax collections have continued to decline and are now down 8.5 percent compared to a year ago.
Luebbering said she still believes the corporate tax drop is related to federal tax changes, and not an early indication of the General Assembly’s decision to phase out the state’s corporate franchise tax.
In any case, March’s numbers weren’t good enough to prevent the state from having to borrow $100 million from the state’s “budget reserve fund.’’ Such borrowing isn’t unusual, Luebbering said. All told, the state has borrowed $325 million from the fund, which must be repaid by May 15.
Here’s the breakdown of March’s state revenue numbers:
GROSS COLLECTIONS BY TAX TYPE
Individual income tax collections
Increased 3.1 percent for the year, from $3.88 billion last year to $4.00 billion this year.
Increased 0.5 percent for the month.
Sales and use tax collections
Increased 3.9 percent for the year from $1.35 billion last year to $1.40 billion this year.
Decreased 0.4 percent for the month.
Corporate income and corporate franchise tax collections
Decreased 8.5 percent for the year, from $331.1 million last year to $302.9 million this year.
Increased 8.5 percent for the month.
All other collections
Decreased 20.2 percent for the year, from $337.5 million last year to $269.3 million this year.
Decreased 12.4 percent for the month.
Refunds
Decreased 4.7 percent for the year, from $956.7 million last year to $912.0 million this year.
Decreased 6.7 percent for the month.
