What’s Good (But Not Good Enough)?

Missouri’s General Revenue!

Now 11 months into Fiscal Year 2018, state General Revenue is up 2.1% over the same time in FY17.  By the end of May Missouri had collected $8.53 billion this year, compared to $8.35 billion last year.

The good news…

  1. Revenue is up!
  2. The revenue increase is large enough to support the next stage of tax cuts enshrined in the 2014 tax debacle bill.
  3. The state should be able to get through the current fiscal year without any new cuts to departments or programs.

The bad news…

  1. Revenue isn’t up as expected, predicted or needed!
  2. The revenue increase is large enough to support the next stage of tax cuts enshrined in the 2014 tax debacle bill.
  3. To live within means, Governor Parson will have to withhold money from departments and programs in FY19, starting July 1st.

Ominous long term trends continue to show themselves in the May 2018 General Revenue Report.

While May money from Individual Income Tax collections is up 17.2%, the yield from Corporate taxes dropped 10.9% for the month.

Let’s make this simple:

YEAR TO DATE

Individual Income Tax                 $7,090,000,000                 $1.00

Sales & Use Taxes                       $2,000,000,000                   28¢

All Other Taxes                           $   432,400,000                   6¢

Corporate Taxes                          $   380,240,000                   5¢

In other words, for every $1.28 we mere individuals throw into the pile, corporate Missouri shucks over a nickel.

Don’t worry, the Missouri legislature is further lowering that dreadful tax burden on Missouri corporations and businesses.

Remember, as I’ve noted, Missouri spends better than $750 million a month on Medicaid/MO HealthNet.  After the variable federal match on that program’s components the average General Revenue cost is around $300 million a month.   That cost is rising at about 5% a year, twice the rate of inflation.   (Inflation this year is running at about 2.4% [https://www.officialdata.org/current-inflation-rate ].)   So, Missouri is actually losing ground even though revenue is up enough to trigger tax cuts.

Yeah, but you get used to that sort of logic if you spend time in Jefferson City.

May tax report:  https://oa.mo.gov/commissioners-office/news/state-releases-may-2018-general-revenue-report

Submitted by Glenn Koenen, WCD Member