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Millionaires' club keeps growing

In this Sept. 24, 2013, file photo, freshly-cut stacks of $100 bills make their way down the line at the Bureau of Engraving and Printing Western Currency Facility in Fort Worth, Texas.  (AP Photo/LM Otero, File)

JEFFERSON CITY • At a time when Missouri’s tax collections are being described as “horrible,” the Legislature is launching next year’s session with newcomers at the helm of the House and Senate budget-writing committees.

Gov. Mike Parson’s appointment on Wednesday of Rep. Scott Fitzpatrick to be the next state treasurer marked the latest change in the makeup of the team that will decide how the state spends more than $28 billion next year on everything from prisons to parks.

Fitzpatrick, R-Cassville, served as chairman of the House Budget Committee, steering the 163-member chamber on appropriations issues for the past two years.

On Friday, Rep. Elijah Haahr, R-Springfield, who is in his first term as speaker of the House, announced that Rep. Cody Smith, R-Jasper, would be Fitzpatrick’s replacement.

Smith has served as vice chairman of the panel since June.

“Having served the past months as the vice chairman and preparing for the session, he is ready to tackle the complexities of the budget process and provide stability on the committee for years to come,” Haahr said.

The Senate also has a new appropriations chief.

Sen. Dan Hegeman, R-Cosby, takes over for Sen. Dan Brown, R-Rolla, who is departing because of term limits.

Hegeman served 11 years as a state representative and was a member of the budget committee during that time. He has served on the Senate Appropriations Committee for two years.

Sen. Mike Cunningham, R-Rogersville, said he didn’t believe there would be any hiccups because of the lack of experience leading the two committees.

“I don’t foresee any problem,” Cunningham said. “Dan Hegeman has been around for a while. He’ll do fine. And the governor is going to do a good job presenting us with a budget plan.”

Haahr also expressed confidence in Smith, who was elected to his second term in November.

“Passing a balanced budget is the most important responsibility of the Missouri General Assembly, and I am confident in Rep. Smith’s ability to ensure every tax dollar spent reflects the priorities of Missourians,” he said.

But the legislative changes come as state revenues are in flux.

State Budget Director Dan Haug announced earlier this month that net general revenue collections for November 2018 decreased 9.1 percent compared with those for November 2017, to $676.5 million this year from $743.8 million last year.

General revenue collections for 2018 fiscal year-to-date decreased 4.9 percent compared with November 2017, to $3.44 billion this year from $3.62 billion last year.

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That set off alarm bells for the director of the Senate appropriations office.

“When comparing the month of November to November of last fiscal year, (general revenue) collections were horrible. The numbers continue to be of concern especially with the continued negative decline in individual income tax collections, which is the largest revenue source in terms of GR collections for the state,” Adam Koenigsfeld wrote in a Dec. 5 memo obtained by the Post-Dispatch.

Koenigsfeld’s sentiment represents a big turnaround from just five months ago, when the state ended the fiscal year with a surplus of $350 million, allowing the state’s new governor to avoid having to make any spending cuts.

In order for the state to hit its targets, tax collections will need to grow by 2.2 percent for the rest of the fiscal year, which ends June 30, he said.

That may be possible. Typically, more than 50 percent of the state’s revenue flows in during the second half of the fiscal year, when people file their tax returns.

But officials also will be dealing with the fallout from federal and state tax cuts.

Beginning Jan. 1, the income tax rate paid by most Missourians will drop to 5.4 percent from 5.9 percent. Supporters of the decrease say the elimination of a number of tax exemptions could reduce the impact of lower tax rates.

The 2019 legislative session begins Jan. 9 and runs through May 17.

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