Missouri revenue up almost 5 percent

JEFFERSON CITY, Mo. -- Halfway through the state's fiscal year, Missouri's tax revenue is up nearly 5 percent, but the state's budget director said Tuesday that's not good enough to warrant the release of additional funding for public schools.

That's because Missouri's revenue bubble is expected to deflate in the upcoming months as people claim larger tax refunds authorized by a federal tax cutting package enacted last year, said Linda Luebbering, the budget director for Democratic Gov. Bob Holden.

Holden's administration is "being overly pessimistic," said Republican House Budget Committee chairman Carl Bearden.

From July through December, Missouri's net general revenue -- excluding a one-time grant of $95 million in federal budgetary aid -- were up 4.8 percent when compared to the first half of the previous fiscal year, according to a Department of Revenue report released Tuesday.

For the past quarter, net revenue rose 1.7 percent. In December alone it rose 1.2 percent.

Bearden cites the net figures, which are basically on track with the revenue projections used to craft the budget.

But Luebbering contends a better reflection of the state's budgetary status so far is the state's gross revenue collections, which do not include tax refunds.

Several factors made refunds appear lower during the first half of the fiscal year, thus inflating the net figure, she said.

Plus, tax refunds are expected to rise more than normal during January through April, as Missourians claim larger individual income tax refunds made possible by new federal tax breaks for married couples and businesses, Luebbering said.

Gross collections were up just 2.4 percent for the first half of the fiscal year, 1.6 percent for the past quarter and 2.6 percent for December, she said.

Individual income taxes, which comprise about 60 percent of the state's general revenue, were virtually unchanged in December, compared to the previous year, and were up 2.7 percent for the first half of the fiscal year.

Sales taxes, which comprise the next largest pool of state revenues, were up 6.9 percent in December and 3.5 percent so far for the fiscal year.

Corporate income and franchise taxes, which comprise a relatively small portion of the budget, were up 17.5 percent in December but were down 1.6 percent for the first half of the fiscal year.