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State tax revenue rises in August
JEFFERSON CITY, Mo. -- State tax revenue grew last month, but not enough to ease the pressures on a struggling state budget, the state budget director said Friday.
The monthly state Revenue Department report shows Missouri's general revenue grew 4.4 percent in August when compared to the same month one year ago. Since the state fiscal year started in July, net revenue collections are up 6.1 percent.
Last year, a delay in issuing individual income tax refunds meant that some of the checks did not get mailed until July and August. This year, almost all of the refund checks were sent out in June, so there was less of an impact on the state's bank accounts in July and August.
When accounting for that difference, state revenue grew by just 2.1 percent compared to August 2002.
State budget director Linda Luebbering said the increase in August was encouraging but still short of what the state needs to fund the budget that began July 1.
"It's going in a positive direction and I'm happy that we're seeing growth," Luebbering said. "It's not up to our old standards, but it is certainly preferable to what we've seen the last two years."
Luebbering said the state's budget needs 5 percent revenue growth to be fully funded and to reverse more than $250 million in spending withholdings already announced by Democratic Gov. Bob Holden. If current trends continue, Luebbering said there is hope that no additional cuts will have to be made.
The spending cuts made by Holden were necessary because the budget began with an imbalance of $139 million, and programs such as the Medicaid health care plan for the poor and disabled are expected to need a midyear infusion of money to cover mandatory expenses, Luebbering said.
August historically is one of the lighter months for tax collections. The biggest months are in the spring, when individual income taxes are due.
Individual income taxes, which account for around 60 percent of the state's annual revenue, grew by 7.1 percent in August compared to last year. But sales and use taxes decreased 5.6 percent. The state reported a 33 percent decline in corporate taxes in August, a 35 percent decline in estate taxes and a nearly 77 percent decline in the interest it earned on deposits.