Missouri revenue way up for year

JEFFERSON CITY, Mo. -- The state's revenue picture is looking good these days. Year-end figures released Thursday show the state's net revenue is up 9.2 percent compared with last year.

That's far higher than the already upwardly revised expectation of a 4.9 percent growth rate.

"Small business owners and entrepreneurs are building on the significant improvements we have made to create jobs, revive the state's economy and move Missouri forward," Gov. Matt Blunt said in a written statement.

The state's net general revenue was $7.33 billion for fiscal year 2006, which ended June 30, the Office of Administration said. That's $620 million higher than a year ago and $292 million more than the revised forecast anticipated, giving the state a cushion as the new fiscal year unfolds.

"This gives us some room to work with in case economic conditions taper off," Office of Administration commissioner Mike Keathley said. "We see no indication of that on a state basis. All indications on a state basis are an improving economy in Missouri, but there's always national factors."

Keathley said energy prices and higher interest rates are concerns.

Democrats, however, said the solid numbers show the state should be spending more on critical needs -- and could do so without raising taxes.

"The reason we have additional money that is above and beyond what is called for in the budget is because we refuse to spend the money on health care and education," said Rep. Margaret Donnelly, a St. Louis Democrat who serves on the House Budget Committee. "These figures speak for themselves as to where our priorities lie."

Keathley said the state hasn't seen this type of revenue growth without major changes in tax law in more than 20 years. But he said the stellar year doesn't mean Missouri can return to its old spending habits and that Medicaid growth still would outpace increased revenue if lawmakers hadn't reined in the system last year.

"This does not give any credence to any contention that those changes were not necessary," he said.

State net revenue collections for June also increased by 9 percent compared with June 2005.

For the fiscal year, sales tax collections were up just 1.8 percent, at $1.99 billion from $1.96 billion. But individual income tax collections rose more than 10 percent, to $5.35 billion from $4.86 billion, and corporate tax collections were up 28 percent.

Individual income taxes make up about 63 percent of state revenue collections, while sales taxes account for about one-fourth of the money.

For the month of June, sales tax collections fell by about 3 percent, but income tax receipts rose 7.3 percent. Corporate tax collections rose 17 percent last month.

Budget writers expected revenue growth of a more modest 4.5 percent for the current fiscal year, which began Saturday. But that estimate was made when the state thought it would see only a 4.9 percent growth rate for the just-ended fiscal year. Revenue growth estimates are typically revised shortly before lawmakers begin work on the next year's budget in January.

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