State revenue 4.9 percent higher than last year

JEFFERSON CITY, Mo. -- State revenue continue to climb higher than expected for the year but dipped slightly last month compared with a year ago, the state Office of Administration reported Thursday.

With just one month remaining in the fiscal year ending June 30, state coffers grew 4.9 percent to $6.93 billion this year. But revenue in May dropped 1.5 percent compared to last May. State officials' revenue projection, updated in January, counts on revenue to grow by about 4 percent.

Although last month's revenue was actually higher than a year ago, tax refunds totaled $109 million -- almost 25 percent higher than in May 2006. Gov. Matt Blunt's budget director, Larry Schepker, said that the dip for last month comes largely because of higher than normal growth in May 2006. A year ago, state revenue grew by more than 20 percent compared to May 2005.

That growth, Schepker said, was fueled by a higher stock market and wasn't anticipated.

In a written statement, Administration commissioner Mike Keathley said yearly revenue would likely keep pace with the 4 percent projection.

"Over the next several months, our revenue may begin to reflect the slowdown in certain sectors of the national economy, plus the effects of higher energy costs," he said. "However, we currently expect a return to moderate growth before the end of the calendar year."

Individual income taxes, the bulk of state revenue, were 2.2 percent higher for the month and climbed 6.3 percent for the year to $5.2 billion.

Corporate income and franchise taxes are 2.6 percent higher for the year and increased less than a percent to $26 million for the month.

Sales and use taxes also dropped 2.7 percent compared with last May.