Missouri revenue still down, but lawmakers’ confidence rises
Missouri’s general revenue fund is still short about $300 million of expectations, but both parties in the Capitol are confident that collections will level out by the end of June.
In January, the shortfall was over $500 million, minority party leaders were concerned the budget would be affected and an error by the Missouri Department of Revenue was credited with the blame.
It turns out that the DOR was not at fault, according to the department’s director, Joel Walters.
On Wednesday, Walters told the House Special Committee on Government Oversight that the revenue issue was caused by the federal tax cuts and a miscalculation of the state’s withholding tables. At first, the cause was believed to be an error in the state’s tables that had gone unnoticed for years.
“There was no 15-year error that was in existence ever,” said Rep. Kip Kendrick, D – Columbia, who is a member of the committee that heard Walters’ testimony. “No error in the withholding tables. Really, it was solely related to the federal tax cut.”
Leaders in the state Office of Administration say they are confident revenues will even out before the end of the fiscal year.
“We feel pretty good that we will have collections that can fund the budget as appropriated,” State Budget Director Dan Haug told ABC 17 News. “If we have to take action to balance the budget, we will, but at this point we don’t feel like any of that action is needed.”
“I’m cautiously optimistic that we’ll get there. I definitely don’t think that we’re going to end the fiscal year down 5%,” Kendrick said.
Tax returns will still be affected. Many could receive bills instead of their expected refunds, which could further delay revenue collection.
“It’s unfortunate that surprise tax bills, lower refunds than people have been expecting, will likely balance the budget for this fiscal year,” Kendrick said.
Kendrick said Missouri taxpayers should adjust their withholdings through their employer or accountant to ensure that they are not charged more on their tax return.
“Very rarely does anyone go back and ever make any adjustments to their W-4, to their withholding,” Kendrick said. He said it would be worthwhile, though, “if you have any concern with a refund or a payment that they have to make to the state.”
