Republican Gov. Mike Parson and Republican legislative leaders on Tuesday projected a growth in general revenue – individual income, corporate, sales and use taxes – of about 2.1% or $200 million for fiscal year 2023 that begins July 1, 2022.
In addition to the expected $11.4 billion in general revenue, the state also will be receiving $6.5 billion in federal funds for Missouri’s highways and $484 million for bridge replacement and repairs from the Infrastructure Investment and Jobs Act.
“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 announcing the projection. “We look forward to working with the General Assembly this session to create a balanced budget for the people of Missouri.”
Last week, Parson announced he will recommend a 5.5% cost of living adjustment and a $15 per hour base pay for all state employees. The proposal will cost $91 million, including $52 million in general revenue.
The revenue projection came the day before the announcement of Missouri’s November unemployment rate decreasing by two-tenths of a percentage point to 3.5% from October’s rate of 3.7%. About 3.1 million Missourians are currently employed. The last time Missouri’s unemployment was 3.5% was December 2019. Missouri lost 305,100 jobs in April 2020 and its unemployment rate was 9.7%.
The Treasurer’s November fund statement showed the General Revenue balance was $2.5 billion.
“As we emerge from one of the most trying economic times in a generation, forecasting revenue growth is particularly important this year,” state Rep. Cody Smith, R-Carthage and the House Budget Chairman, said in a statement. “Therefore, I’m pleased to put forward a conservative revenue estimate to which the House, Senate, and Governor have agreed.”
The net general revenue collection in fiscal year 2021 was $11.2 billion. All gross collections at the end of fiscal year 2021 (June 30, 2021) showed an increase over 2020, according to the Missouri Office of Administration:
- individual income tax collections increased 28.3%, from $6.95 billion to $8.92 billion;
- sales and use tax collections increased 6.7%, from $2.28 billion to $2.43 billion;
- corporate income and corporate franchise tax collections Increased 72.1%, from $463.1 million to $797.1 million;
- all other collections increased 13.1%, from $524.8 million to $593.5 million.
The fiscal year 2021 general revenue collections reflect two tax filings during the year as the April 15, 2020, deadline was moved to July 15, 2020. The fiscal year 2022 revised estimate reflects one tax filing. The revised revenue estimate for 2022 is $11.2 billion.
“I am pleased we were able to arrive at a consensus revenue estimate for FY23,” state Sen. Dan Hegeman, R-Cosby and Senate Appropriations Chairman, said in a statement. “The House, Senate, and Governor stand ready to work together to address the needs of Missourians through a balanced budget this upcoming legislative session.”
State Rep. Crystal Quade, D-Springfield and House minority leader, noted on social media Parson’s failure to mention federal Medicaid funds coming into the state. The legislature didn’t include voter-approved Medicaid in its 2022 budget. The state didn’t enroll eligible recipients until the Missouri Supreme Court upheld a circuit court ruling on the constitutionality of the expansion.
“The ‘large amounts of Missourian’s federal tax dollars returning to our state’ are the (dollars) we get from expanding Medicaid,” Quade posted on Twitter. “… the (dollars) that the GOP put at risk with their shenanigans, or the (dollars) we’re seeing invested in Missouri by Biden’s bipartisan infrastructure deal?”
