This is not a joke: at the close of business on June 25th – with five days left in the Fiscal Year – Missouri General Revenue was a net $654,435,999.60 below the revenue amount for the same date in 2019. The largest single source of revenue, Individual Income Tax, was down $695 million – a 9.17% decline. [ Department of Revenue General Revenue Report, Close of Business : June 25, 2020 ]
Factor in that Missouri anticipated – and spent – for most of the Fiscal Year assuming increased General Revenue and the “gap” between budgeted and received money is greater than $1,000,000,000.00!
Yes, his eminence the accidental governor slashed better than $400 million from state spending in recent weeks, including new, steep cuts to higher education and elementary and secondary education. A nice start but not enough to get to the balanced budget he must enforce by the end of Fiscal Year 2020, next Tuesday, June 30th.
Fiscal Year 2021 beginning Wednesday will be worse.
Oh, it goes without saying that state employees won’t get the 2% raise most were promised, nor will Missouri honor other planned program enhancements and improvements. The state may get a light uptick in revenue before mid-July as 2019 Income Tax bills finally come due, but, well, prospects for a surge in new money look dim as the pandemic keeps pounding America.
And, I wonder how many unpaid FY20 bills are still in drawers around Jefferson City?
For example, last week the Department of Social Services issued their Monthly Management Report for May – except that the summary page for MO HealthNet/Medicaid (Chart 23) was a repeat of the April report…even says so at the top of the page. [ https://dss.mo.gov/re/pdf/fsd_mhdmr/0520-family-support-mohealthnet-report.pdf p. 118] Since the number of Missourians qualifying for Medicaid increased in May, well, we can expect the program cost for May went up too – above the $771 million spent in April.
Yes, much of that is Washington money. Alas, Missouri has to pay all of the bill, not just the federal portion.
Could it be that Missouri is sitting on hundreds of millions of dollars of bona fide medical bills for hundreds of thousands of citizens, as well as other legitimately owed expenses, because the state lacks the money to pay them?
Remember, a big part of Missouri’s money woes are self-inflicted…
Missouri’s beer tax at 6¢ a gallon is the nation’s second lowest: going to 18¢ a gallon would bring us up to a ‘regional average’ and increase revenue [ https://www.taxadmin.org/assets/docs/Research/Rates/beer.pdfhttps://www.taxadmin.org/assets/docs/Research/Rates/beer.pdf ];
The tobacco tax in Missouri is lowest in the nation, even lower than North Carolina[ https://www.tobaccofreekids.org/assets/factsheets/0097.pdf ];
Thanks to the Wayfair Decision, Missouri could be collecting $150 million a year in sales tax from internet sales; and,
Missouri has dramatically cut corporate and individual income tax rates in recent years, giving away millions it could really use.
Stay tuned.
Glenn