Well, in Missouri predicting state revenue requires luck, dice and Ouija boards. The main sources of revenue – individual income tax and sales tax – jump about due to circumstances the state can’t control nor accurately predict.
That reality hit like a brick to the head in April 2018.
Per today’s press release from the Office of Administration, STATE RELEASES APRIL 2018 GENERAL REVENUE REPORT [ https://oa.mo.gov/commissioners-office/news/state-releases-april-2018-general-revenue-report ], this April individual income tax collections dropped 4.9% for the month. Sales tax revenue climbed by 1.9% for the month but the overall Year To Date General Revenue total – representing 10 months of Fiscal Year 2018 – increased just 2.1% compared to FY17.
While 2.1% sounds decent (tracking with inflation), that level of increase does not give Missouri the money it counted on to fully fund state activities!
With only two revenue months left in the fiscal year, it is highly unlikely that trends will change.
This points towards two problems:
1) the state may have to further cut payments to departments and programs in coming weeks, and,
2) the outlook for the next Fiscal Year (7/1/18 – 6/30/19) ought to be downgraded, meaning additional millions upon millions of dollars from the budget now being considered should be slashed.
A quick stop for context: In April 2016 net General Revenue was up 2.7%, while in April 2017 GR ran 3.1% ahead of 4/16. [ https://oa.mo.gov/commissioners-office/news/state-releases-april-2016-general-revenue-report https://oa.mo.gov/commissioners-office/news/state-releases-april-2017-general-revenue-report ] So, despite predictions of a better year, 2018 performance actually tracks below the mediocre levels of 2016 an 2017.
Oh yes, remember that major, new individual and corporate tax cuts are now being considered by the legislature. And, major parts of past tax cuts are will take effect next year. (Those previous tax cuts caused a big spike in refunds this year.)
April 2018 General Revenue Report
April Result Fiscal Year To Date
Individual Income Tax – 4.9% +4.7% $6.41 billion
Sales Tax +1.9% +2.0% $1.79 billion
Corporate Taxes -3.7% +9.8% $356.4 million
All Other – 5.9% +1.1% $395.2 million
Refunds +20.5% +20.2% $1.15 billion
Submitted by Glenn Koenen, WCD Member