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‘Highly concerning’: Coronavirus slashes Missouri tax revenues in half in April

‘Highly concerning’: Coronavirus slashes Missouri tax revenues in half in April


JEFFERSON CITY — The economic effects of the coronavirus resulted in a more than 54% drop in state tax revenues in April, delivering a major blow to Missouri’s budget.

At the same time lawmakers are rushing to finish a spending plan for the fiscal year beginning July 1, figures released by Gov. Mike Parson’s budget office show net general revenue collections in April were slashed from $1.59 billion in April 2019 to $725 million this year.

“Certainly the lack of revenue that we’re seeing is highly concerning,” House Budget Committee Chairman Cody Smith told the Post-Dispatch.

The stunning drop was not unexpected as consumers stayed home and employers shed jobs amid the spread of COVID-19.

In April, Parson withheld $47 million in spending from the state budget amid the economic downturn. That cut was in addition to about $180 million in budget restrictions Parson announced earlier.

For the year, tax collections are down by 6.1% heading into the final two months of the fiscal year.

Income tax collections, which are the main source of state funds, were down nearly 64%, primarily because Parson extended the tax filing deadline from the normal April 15 date to July 15.

Smith, a Neosho Republican, said he’s hopeful some of the revenue not collected in April will flow into state coffers in July.

“Moving the tax deadline from one fiscal year to another creates incredible challenges, not only from a revenue perspective but from a budgeting and planning perspective, so we’re watching it very closely,” Smith said.

Corporate income taxes also were down a whopping 66%, the budget office said.

“This is unlike anything I have ever seen,” Parson budget chief Dan Haug told the Associated Press. “I couldn’t even imagine revenues dropping as much as they did. To see the economy turned off like a faucet is incredible.”

The numbers come as House and Senate budget writers were meeting to hammer out differences in next year’s $30 billion spending plan.

A major sticking point is funding for higher education, which the House wants to cut by 10%, forcing universities to layoff workers and, potentially, raise tuition to cover the lack of state assistance.

In the Senate’s version, that cut is being cushioned by federal stimulus funds that may or may not be approved by Congress. With little debate, members of the budget writing committee agreed to stick with the Senate plan even though there is no guarantee of the funding.

Among the changes from the Senate version of the budget was a decision to reduce increased funding for the Missouri A+ scholarship program, which is offered to students who attend community colleges and technical schools.

Sen. Lauren Arthur, D-Kansas City, had sought to use proceeds from the state lottery to boost the $43.5 million program by $800,000.

“Those kind of cuts would be shortsighted,” said Arthur. “The state has made a commitment to those students.”

Smith said the lottery funds are being redirected to school transportation costs for secondary and elementary schools.

Overall, the spending plan is $146 million less than what’s in the current budget.

The plan also nixes 2% raises for the state’s low-paid state workers in the fiscal year that begins July 1.

Lawmakers also are cutting unfilled jobs from the budget.

{div class=”lee-article-text”}At the Missouri Department of Transportation, for example, budget writers found 30-plus employee openings that could be pared from the budget to save about $1.3 million.

{/div}That brought complaints from Democrats.

“In recent years, we’ve been in a tight labor market,” said Rep. Kip Kendrick, D-Columbia, who said the state should not be cutting job openings at a time when unemployment has soared due to the effects of the pandemic.

Lawmakers also balked at a plan to reduce funding for Amtrak’s River Runner train that operates twice-daily passenger service between St. Louis and Kansas City. Republicans said it would result in only one train per day.

Rep. Peter Merideth, D-St. Louis said that will hurt ridership.

“It’s a big part of tourism,” Merideth said.

The Senate version steers $20 million in federal emergency aid money to help meat processing facilities that have become coronavirus hot spots.

The proposal also sets aside $30 million in federal funding for grants for small businesses.

The General Assembly is working toward a Friday deadline to get the budget to Parson, who had sought an estimated $700 million more in spending than lawmakers are expected to give him when he outlined his proposal in January.

The legislation is House Bill 2001-2018.

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