JEFFERSON CITY — With one-third of the state’s fiscal year in the books, Missouri tax collections are significantly ahead of projections.
According to a monthly tracking report released Wednesday, net general revenue collections through October increased 7.3 percent, growing from $2.77 billion to $2.97 billion.
That increase could provide a cushion if the economy weakens and help Gov. Mike Parson avoid having to make any midyear spending reductions. The state budget was built on a 2 percent rate of growth.
Parson, a Republican who is seeking a full, four-year term in 2020, said the increase is a reflection of the state’s “strong fiscal health, growing economy and ability to live within our means.”
“We put a major focus on investing in workforce development and infrastructure this year, and the results have been historic,” Parson said. “With next year just around the corner, we will continue to invest in these areas, move our economy forward and make sure we are financially prepared for the unexpected.”
The governor, who took over in June 2018 after the departure of scandal-plagued Gov. Eric Greitens, is likely to face Democrat Nicole Galloway a year from now. She is the current state auditor.
The state’s budget plan, which went into effect July 1, included money to give state employees a 3 percent raise. Department of Corrections employees, among the lowest paid in the nation, will receive additional salary increases in an effort to attract and retain guards.
Public schools also are receiving $61.4 million more than this fiscal year, bringing total K-12 spending to $3.54 billion. Public colleges and universities will receive small increases to core funding.
The spending blueprint also includes $10 million in lottery funds that will go to the “Fast Track” scholarship program for students 25 or older.
The added revenues flowing into the state’s general checkbook came despite two Republican-led tax cuts in recent years.
Last year, Parson signed legislation reducing Missouri’s top individual income tax rate from 5.8 percent to 5.4 percent. The rate will continue to drop incrementally to 5.1 percent if the state meets revenue targets.
Before leaving office, Greitens approved a cut in the corporate tax rate, dropping it from 6.25 percent to 4 percent.
For a month-to-month comparison, revenues for October grew by 10.2 percent compared to October 2018.
The individual income tax, which is the biggest source of revenue for the state, increased 3.3 percent for the year.
Sales and use tax collections jumped 5.2 percent, while corporate taxes increased 28.6 percent.