Gov. Mike Parson has announced his administration’s expectation of the tax revenues for next year’s state budget — more than $418 million less than this year.
Parson will release a detailed budget proposal for the 2022 fiscal year during his State of the State address in January, but his administration Thursday released a consensus revenue estimate for 2022.
That annual revenue estimate is “one of the basic assumptions used by the governor and legislative leaders to build and balance Missouri’s budget” and is established by state budget experts and outside consultants, according to a news release from Parson’s office.
House Budget Committee Chairman Rep. Cody Smith, R-Carthage, told higher education leaders Wednesday he expects the 2022 fiscal year would be a challenging one, because that’s when the economic effects of the COVID-19 pandemic will appear in tax receipts — reflecting businesses closing, unemployment and decreased tax liabilities.
A further complication is this year’s budget, the 2021 fiscal year, includes tax revenues from the 2019 calendar that were pushed back from their normal filing deadline in the spring into the summer because of the pandemic.
Parson said Thursday: “The revised estimate (of net general revenue collections) for the current fiscal year is $10.2 billion. This estimate is artificially high due to the income tax filing date being moved from April 15 in FY20 to July 15 in FY21, resulting in two income tax filing dates in FY21. The FY22 estimate reflects a return to a single filing date in the fiscal year.”
That consensus revenue estimate for FY22 assumes a decrease in general revenue collections of 4.1 percent, or $418.8 million, from the current budget.
That means net general revenue collections in FY22 are expected to be $9.78 billion.
Senate Appropriations Committee Chairman Dan Hegeman, R-Cosby, said: “I am pleased we were able to arrive at a consensus revenue estimate for FY22. The House, Senate and governor stand ready to work together to address the needs of Missourians as we recover from the COVID-19 pandemic.”
Smith said: “We are in the midst of the most trying economic times in a generation. Forecasting revenue growth is particularly challenging this year. Therefore, I’m pleased to put forward a conservative revenue estimate to which the House, Senate and governor have agreed.”
Parson thanked both committee chairmen for their work and said: “COVID-19 has had an overwhelming impact on our economy, but we are already making a strong recovery and remain optimistic for the coming year. We look forward to working with the General Assembly this session to create a balanced and responsible budget for the people of Missouri.”
Parson restricted $448 million from the current year’s budget in July, though $40 million of general revenue funding was restored in October, when nearly $95 million in federal aid was also put toward state budget needs.