Revenue for state reaches record

But officials saids it is difficult to draw conclusions about the upcoming fiscal year.

JEFFERSON CITY, Mo. -- Missouri took in a record amount of taxes and revenue during the recently concluded fiscal year, but state officials are remaining cautious in drawing any conclusions about the strength of the state economy.

Figures released Friday showed that Missouri netted more than $6.7 billion during the 2005 fiscal year that ended Thursday -- topping the previous high of nearly $6.4 billion set in the 2003 fiscal year, according to State Treasurer Sarah Steelman.

The 2005 revenue grew 5.8 percent over the previous fiscal year, comfortably exceeding the 3.8 percent growth upon which the budget had been based, said Michael Keathley, Gov. Matt Blunt's Office of Administration commissioner.

The growth was due primarily to stronger-than-expected individual income taxes and corporate income and franchise taxes. State sales taxes, while growing somewhat over the previous year, came in lower than had been projected.

Keathley said that makes it difficult to draw any implications for the state's 2006 fiscal year that began Friday. Income taxes, received largely in spring 2005, reflect money earned in 2004, whereas sales taxes reflect more current economic activity.

"I am concerned about fiscal year '06 because of the sales tax numbers," Keathley said, "and because we do not yet have the effect of these higher fuel costs on corporate profits," which would be reflected in future income tax payments.

The treasurer's office said sales taxes may be lagging because of an increase of Internet purchases, which are not taxed. Part of the decline may also be due to consumers spending more of their discretionary income on tax-free services, rather than taxable products, the treasurer's office said.

General revenue makes up about one-third of the state's roughly $19 billion budget, which also includes federal money and dedicated taxes, such as motor fuel taxes that go to roads. But general revenue often serves as a gauge of the state's fiscal strength, because lawmakers have the most discretion over how to spend the dollars. Public school districts, colleges and prisons all are funded primarily through general revenue.

The state collected nearly $4.9 billion in individual income taxes during the 2005 fiscal year, a growth of 6.3 percent over 2004. Sales taxes totaled almost $2 billion, up 2.9 percent over the previous year. Corporate income and franchise taxes brought in $474 million, up 12.6 percent. General revenue also includes smaller sources, such as alcohol taxes and interest on state deposits.

The net figure of $6.7 billion accounts for deductions due to tax refunds, and the net 5.8 percent growth rate also subtracts a $95 million federal grant that was placed in state general revenue during the 2004 fiscal year.