State projecting revenue to reach record high next year

JEFFERSON CITY, Mo. -- Gov. Mike Parson and state legislative leaders have agreed on a financial framework for the upcoming budget that assumes state revenue will grow to a record amount.

The agreement released Tuesday bumps up the projected revenue for the current fiscal year while also projecting net general revenue will reach a record $11.4 billion in the 2023 fiscal year -- a growth rate of 2.1%.

Missouri's budget year runs from July 1 to June 30, meaning the state already is about halfway through its 2022 budget.

Parson is to present a new spending plan to lawmakers when they convene their annual session in January. He already has said he will recommend pay raises for state workers. In addition to deciding how to spend normal state and federal revenue, officials also must determine what to do with nearly $2.7 billion of pandemic relief funds from the American Rescue Plan Act signed by President Joe Biden.

"With general revenue expected to increase and large amounts of Missourian's federal tax dollars returning to our state, we have a great opportunity and responsibility to make smart, meaningful investments that serve Missourians now and into the future," Parson said in a statement.

House Budget Committee Chairman Cody Smith described the agreed upon figures as "a conservative revenue estimate."

A year ago, the Republican governor and legislative leaders had projected the state to receive about $9.8 billion of net general revenue for the 2022 budget year. Tuesday's revision boosts that to nearly $11.2 billion. That technically would be down 0.5% from the 2021 budget year, but the figures for last year were inflated because the 2020 income tax deadline was delayed from April 15 to July 15 as the coronavirus spread across the U.S.

If a portion of Missouri's 2020 tax revenue had not been delayed into the 2021 budget year, the revised 2022 revenue projection would amount to about 7% growth, said Parson's state budget director, Dan Haug.

"The Missouri economy has been performing really well last year and so far this year, and we expect it to continue," Haug said.