State's revenue stagnant to start fiscal year, says director

JEFFERSON CITY, Mo. -- State revenue for July, the first month of the new fiscal year, was basically stagnant, but the state's budget director said Monday that's no cause for concern.

Net general revenue for July was $418.8 million, up just 0.2 percent from July 2003. Overall revenue collections, before paying out refunds, were down 0.2 percent.

But budget director Linda Luebbering said that a major deadline for paying taxes, mainly for individuals, fell in late July last year but in early August this year, so the figures should even out over the next month.

"It's not good, but it's not overly concerning because of this due date issue," she said.

Fiscal year 2005 runs from July 1 to June 30.

Last month, which is also the fiscal year to date, the state collected $274.9 million in individual income taxes, up 2.4 percent from last year.

Individual income taxes comprise about 60 percent of the state's general revenue, with about 30 percent coming from state sales and use taxes. Those tax collections decreased 1.8 percent compared with July 2003, to $142.6 million.

House Budget Committee chairman Carl Bearden, R-St. Charles, also said the news was not a concern.

"I don't think there's any reason to believe it won't continue to be fairly strong," he said.

The legislature passed and Gov. Bob Holden signed a nearly $18.9 billion state budget for the fiscal year that started July 1. That budget was based at the time on an estimate of 4 percent to 4.5 percent general revenue growth, compared with the previous fiscal year. But Bearden said the 2004 fiscal year ended so much stronger than expected that growth of 2.8 percent to 3.1 percent should suffice to meet the current budget.

Missouri's net general revenues grew 7.1 percent during the fiscal year that ended June 30, and the fiscal 2004 budget had assumed 5.1 percent growth.

Next weekend also is a three-day sales tax holiday, during which state sales tax will not be collected on back-to-school items such as clothes or classroom supplies. Local governments can opt out of the tax break. Luebbering estimated Missouri will forgo $2.5 million in sales taxes. Bearden said he doubted that would hurt the overall revenue picture, noting August's collections so far are coming in strong.

The state paid out $39 million in income tax refunds to individuals for July, a 4.5 percent decrease from a year ago.

Corporate tax collections were down about 8.2 percent for the month, at $15.3 million, while other collections were down 12.6 percent.

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On the Net:

Revenue Department: http://www.dor.mo.gov