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Mo. budget surplus could reach $320 million
JEFFERSON CITY, Mo. -- Missouri could be sitting on a $320 million budget surplus, thanks to higher-than-expected tax revenues and lower-than-expected spending during the recently concluded fiscal year.
Lawmakers had intended to leave about $200 million unspent when passing the state's $21.5 billion operating budget for the 2008 fiscal year, which started July 1.
Gov. Matt Blunt's budget office raised that estimate to $320 million Monday, based on the amount of money actually carried over from the old fiscal year to the new one.
Unless lawmakers take additional action, that money will remain unspent.
But politicians already are proposing ways to use part of that surplus.
Blunt, who vetoed a wide-ranging tax break package last week, has said he would call a special session if legislative leaders can agree on a slimmed-down economic development bill authorizing around $50 million to $70 million in new tax incentives.
Some of that extra money also could be spent on Missouri's revamped Medicaid program, which has been renamed MO HealthNet. The bill Blunt signed into law authorizes dental and optical coverage for adult Medicaid recipients and creates a new women's health initiative, but the budget lawmakers passed included no money for those services.
For the recently concluded 2007 fiscal year, Missouri's net general revenues totaled more than $7.7 billion, a growth rate of 5.2 percent over the previous year.
That amounted to $89 million more than had been projected under an assumed 4 percent growth rate.
The additional revenue accounts for a large portion of the higher surplus.
The other portion comes from savings. State agencies typically do not spend every dollar appropriated to them, but this year they left unspent even more money than had been assumed. Blunt's deputy commissioner for administration, Rich AuBuchon, attributed that to increased efficiency in government.
Individual income tax collections rose by 7 percent during the 2007 fiscal year, compared with the previous year, while corporate income and franchise taxes rose by 4.1 percent, according to figures from the state treasurer's office and Blunt's budget office. State sales and use taxes increased 2.5 percent, compared with the previous year.
The treasurer's office said growth in the U.S. economy should be able to sustain a reasonable level of state revenue growth in the new fiscal year. The governor's budget office said revenue growth could be slow in the next several months, because of a recently sluggish economy, but projected that moderate revenue growth should return by the end of the calendar year.
The budget passed by lawmakers assumed a 3.8 percent revenue growth rate for the 2008 fiscal year. But because the state is starting with more money than anticipated, it could fall short of that projected growth rate and still balance its books, assuming expenses do not surge.
June appeared to be a particularly good tax month for the state, with net general revenues up nearly 8.2 percent, compared with June 2006. Individual income tax collections were up 14.2 percent last month, compared with June 2006, and corporate income and franchise taxes rose by 12.7 percent. Sales and use tax collections were up 3.2 percent in June, compared with the same month in 2006.