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So where does Missouri gets its money?

Sunday, April 28, 2002

JEFFERSON CITY, Mo. -- When a great-aunt leaves a hefty estate, Missouri can grab a chunk. When a fisherman buys a new boat motor, the state collects a fee. Lost your birth certificate? Write a check to the state to get a replacement.

These amounts large and small pour into a pot the state of Missouri calls general revenues -- "G.R." to bureaucrats, lawmakers and economists.

Altogether, more than 100 kinds of payments go into general revenues, everything from individual and corporate income taxes to fees for inspections of caves and mines.

Every month the Missouri Department of Revenue reports on the status of general revenues.

In the go-go economy of the mid-to-late 1990s, the agency often reported revenue growth in double digits. But in a slumping economy, the dollar amounts and percentage changes in some categories now are bracketed by parentheses, indicating that they have fallen behind previous levels.

Income, sales taxes

The current statehouse hand-wringing about sharply declining revenues is really about a few categories that yield the most money -- income taxes and sales taxes. For example, economists say stock market declines pulled down capital gains, reducing investors' income and therefore personal income tax liabilities, so much that the state is on the hook for large refunds.

So important are these major revenue categories that Gov. Bob Holden says their sharp declines will put overall state income below that of the previous year -- by some 4.4 percent -- for the first time since Gerald Ford occupied the White House.

General revenues grew from $1.13 billion in 1976 to $7.53 billion in the 2001 budget year. They grew no matter who was making budget vetoes as governor; during that span, Democrats and Republicans each had 13 years in the chief executive's chair.

Also growing were demands for the money to match expanding federal programs such as Medicaid.

General revenues are spent in literally thousands of ways; Holden's proposed spending plan for the fiscal year starting July 1 is nearly an inch thick, with oodles of general revenues earmarked for purposes from satellite transmission of college classes to enhanced security for state office buildings.

In transaction after transaction, Missourians contribute to general revenues in ways they may not even realize.

Ice cream fees

Manufacturers of ice cream, for example, pay an annual fee for a state inspection, and it adds up: $21,180 statewide in the last budget year. The costs are passed along with every banana split.

Chris Hackman of Central Dairy in Jefferson City, which promotes its "Fresh as a Missouri Morning" milk and ice cream, just shrugs about paying the annual inspection fee, which he said hasn't risen in years.

"I guess it helps with the salaries and expenses of the inspectors, and if it's in the interest of reassuring public safety, that's fine," Hackman said.

Buy a photocopy from a state agency, pay a fee. A company manufacturing or wholesaling narcotic drugs to pharmacies pays a special fee. So do manufacturers of soda pop and operators of hotels, motels and resorts. The use tax is imposed at the same rate as the state sales tax for purchases from out-of-state catalog companies such as Eddie Bauer or L.L. Bean.

"Some of these fees are unique and have been around for a long, long time. I don't even look at all of them all the time, and I know it's not something the taxpayer ever sees, such as state vendor refunds," said Carol Fischer, director of the Department of Revenue.

"Typically these are paid at the wholesale level and passed along to the consumer," she added. "The consumer pays -- one way or another."


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