Missouri General Revenue Collections Decrease
JEFFERSON CITY - Revenue figures for the 2014 fiscal year released Wednesday morning showed 2014 net general revenue collections decreased by one percent compared to 2013, from $8.08 billion last year to $8.00 billion this year. The 2014 fiscal year ended Monday.
Missouri Budget Director Linda Luebbering said state general revenue collections typically grows around 3.5 percent each year. She said it is very unusual for revenue to decline by 1 percent.
Luebbering said there are a couple of reason for the decrease, but the main reason stems from federal tax changes.
"Capitol gains have been down so the revenue that states receive from income taxes include taxes on Capitol gains," Luebbering said, "Capitol gains for our current tax year were lower than last tax year because people were claiming those gains early in order to avoid an increase in federal taxes."
Luebbering said another reason is the bad 2013-2014 winter. The harsh weather slowed the economy in Missouri, causing a decline in revenue.
On June 11, Governor Nixon vetoed legislation passed by the Missouri General Assembly concerning special tax breaks and exemptions.
Nixon's office issued estimates Columbia would lose $5.7 million in sales tax revenue and Boone County would lose $4.6 million annually if the legislature overrides his veto.
Luebbering said if the tax breaks go into effect, they would reduce general revenue collections by $217 million for the state in the upcoming year.
"This is very significant from the standpoint that you have to reduce services and programs in order to make up for that loss," Luebbering said. "The biggest single beneficiary of state general revenue is K-12 education."
Sen. Kurt Schaefer, R- Columbia, served as the Senate Appropriations Committee Chair during the legislative session. Schaefer said he does not agree with Nixon's administrative calculations and thinks Nixon is attempting to make a short-term fix for the state's economy.
"This is the first year in a long time that the Governor and the legislature could not come to an agreement," Schaefer said shortly after the veto. "The reason our economy is in the situation it is in is because the Governor has no economic development plan."
Nixon already froze spending for 2015 budget year because of the worse-than-expected 2014 state tax revenues.
Despite the 2014 revenue decrease, there has been some growth in the last month. Individual components such as sales tax collections and income tax collections showed an increase in June.
"We should start to see some positive momentum going into this fiscal year," Luebbering said. "If the tax breaks are passed despite the governor's veto, that's gonna bring us back down."
Net general revenue collections for June 2014 decreased by 12.3 percent compared to those for June 2013, from $781.5 million to $685.7 million.
Here are the gross collections by tax type from the Missouri Office of Administration, comparing full year to June:
Individual income tax collections
Decreased 0.2 percent, from $6.37 billion last year to $6.35 billion this year.
Increased 4.5 percent for June 2014, compared to June 2013.
Sales and use tax collections
Increased 3.8 percent, from $1.90 billion last year to $1.97 billion this year.
Increased 23.9 percent for June 2014, compared to June 2013.
Corporate income and corporate franchise tax collections
Increased 2.9 percent, from $525.7 million last year to $540.7 million this year.
Decreased 7.6 percent for June 2014, compared to June 2013.
All other collections
Decreased 10.9 percent, from $470.9 million last year to $419.3 million this year.
Increased 13.8 percent for June 2014, compared to June 2013.
Increased 8.4 percent, from $1.18 billion last year to $1.28 billion this year.
Increased 288.8 percent for June 2014, compared to June 2013.