Missouri ends year with bleak budget news
This article first appeared in the St. Louis Beacon, Jan. 5, 2012 - Missouri Budget Director Linda Luebbering says the state's financial picture has taken a turn for the worse, making it possible that Gov. Jay Nixon may have to make mid-year trims to balance the current budget.
"I'm more concerned about the next six months than the next 18 months," Luebbering said in an interview Thursday. The budget director explained that most financial experts say the nation's economic picture will improve over the next year.
But the short term poses some serious challenges.
The state's December income numbers -- the mid-point in the fiscal year that began July 1 -- were particularly grim.
The state's revenue collections were down 2.1 percent compared to December 2010. Net general revenue collections for the month declined $14.3 million, from $667.1 million in December 2010 to $652.8 million last month.
What's concerning, said Luebbering, is that December 2010 was down 13 percent from December 2009. Which means that December 2011 is the state's worst showing for the month in at least two years.
It also was the third month out of the last four that saw state revenue declines in 2011 compared to 2010. The upshot is that the current fiscal year collections are now running only 1.2 percent above the previous year.
Overall, the fiscal year-to-date general revenue collections have increased 1.2 percent compared to the previous fiscal year, from $3.45 billion last year to $3.49 billion this year. The increase? About $40 million.
The state's current budget (FY 2012) was crafted based on a modest estimated increase in revenue of just under 2 percent, compared to the previous fiscal year.
To meet that estimate, Luebbering said, the state's revenue collections would need to grow by 4 percent over the next six months. That's unlikely, she said.
As a consequence, Nixon may need to trim the current budget in the next few months to ensure that the state's budget is balanced June 30, as required by the state constitution.
The situation is particularly troubling since state officials and the General Assembly already are focused on a potential shortfall of $500 million in the coming fiscal year's budget, compared to this year, because of the end of federal stimulus aid.
Legislators and the governor's office already are analyzing what cuts might need to be made. Any trims made in the current fiscal year would be in addition to those reductions.
Last month's low revenue number was propelled by an unexpected decline in state sales tax receipts, which Luebbering said had been unexpected because of the usually heavy holiday spending.
Instead, she continued, retailers were forced to offer "deep discounts," which resulted in lower prices for customers -- and less in sales tax for the state.
Missouri's revenue collections were down across the board in December, with the exception of a tiny increase in revenue from the income tax. That at least means people are working.
But they are not spending.
Breakdown in Revenue Collections for December 2011
Individual income tax collection
- Increased 2.2 percent for the year, from $2.44 billion last year to $2.49 billion this year.
- Increased 0.1 percent for the month.
Sales and use tax collections
- Increased 2.2 percent for the year from $898.3 million last year to $918.2 million this year.
- Decreased 4.0 percent for the month.
Corporate income and corporate franchise tax collection
- Decreased 10.6 percent for the year, from $244.6 million last year to $218.5 million this year.
- Decreased 10.5 percent for the month.
All other collections
- Decreased 22.9 percent for the year, from $219.1 million last year to $168.8 million this year.
- Decreased 27.9 percent for the month.
- Decreased 12.3 percent for the year, from $351.0 million last year to $307.9 million this year.
- Decreased 30.2 percent for the month.