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Missouri government's income continues to lag behind projections used to craft budget

stacks of money

Missouri state government’s income was almost flat in December, compared to a year ago, a possible sign that Gov.-elect Eric Greitens may face tougher financial decisions than he had expected.

The state’s latest revenue numbers, released Wednesday, show that Missouri’s income growth for the current fiscal year is less than half the increase needed to fully fund the state government’s current budget.

The General Assembly had assumed growth of about 5 percent when it crafted the budget for the fiscal year that began last July 1. December’s numbers mark the halfway point, and show an increase so far of about 2.2 percent for the fiscal year’s first six months.

December’s tally for the month  illustrates the problem.  Growth for the month was only 0.3 percent – or $2.4 million – compared to December 2015.

Under the Missouri constitution, the state’s budget must be balanced by the end of the fiscal year on June 30. The governor has broad powers to cut or restrict spending in order to comply.

Acting State Budget Director Dan Haug said in an interview a month ago that the chief reason for lower-than-expected income numbers is a sharp decline in corporate tax collections.

The state’s revenue from business taxes are down by more than 35 percent in less than two years. Haug points to a change in Missouri's tax laws that deal with how multi-state corporations divide profits among the states where they do business.

Outgoing Gov. Jay Nixon acted in early December to withhold $51 million in budgeted state spending. “Withholds’’ can be restored if the state’s income picture improves.

In any case, Greitens is expected to have to withhold about $150 million in additional spending soon after taking office next Monday.

Here's the revenue breakdown for December, as reported by the state's Budget Office:

Individual income tax collections

  • Increased 3.5 percent for the year, from $3.05 billion last year to $3.15 billion this year.
  • Increased 0.6 percent for the month.

Sales and use tax collections

  • Increased 1.2 percent for the year, from $1.04 billion last year to $1.05 billion this year.
  • Decreased 11.8 percent for the month.

Corporate income and corporate franchise tax collections

  • Decreased 26.5 percent for the year, from $244.9 million last year to $179.9 million this year.
  • Decreased 24.4 percent for the month.

All other collections

  • Increased 16.7 percent for the year, from $183.7 million last year to $214.4 million this year.
  • Increased 35.1 percent for the month.


  • Decreased 1.4 percent for the year, from $343.9 million last year to $339.1 million this year.
  • Decreased 35.6 percent for the month.

Haug reported that the state borrowed $50 million from its Budget Reserve Fund for cash flow purposes.  The money must be repaid to the fund by the constitutional deadline of May 15.

Jo Mannies has been covering Missouri politics and government for almost four decades, much of that time as a reporter and columnist at the St. Louis Post-Dispatch. She was the first woman to cover St. Louis City Hall, was the newspaper’s second woman sportswriter in its history, and spent four years in the Post-Dispatch Washington Bureau. She joined the St. Louis Beacon in 2009. She has won several local, regional and national awards, and has covered every president since Jimmy Carter. She scared fellow first-graders in the late 1950s when she showed them how close Alaska was to Russia and met Richard M. Nixon when she was in high school. She graduated from Valparaiso University in northwest Indiana, and was the daughter of a high school basketball coach. She is married and has two grown children, both lawyers. She’s a history and movie buff, cultivates a massive flower garden, and bakes banana bread regularly for her colleagues.

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