While Missouri's revenue picture is doing better than expected, the 128 percent increase in general revenues reported for May is simply an aberration due to an additional income tax due date this year, the state's budget director said.
The state's May 2021 General Revenue Report indicates general revenue collections for May 2021 came in at $1.22 billion, an increase of 128.3 percent from last May's $533.5 million. General revenue collections for the fiscal year to date also increased from $8.06 billion last year to $10.02 billion this year, an increase of 24.3 percent.
The report compares the current fiscal year, which had two income tax due dates on July 15 and May 15, to last fiscal year, which had zero income tax due dates, as well as the COVID-19 pandemic affecting revenue.
The Missouri Department of Revenue provided a 90-day extension to the income tax due date in March 2020, and then provided another extension in March 2021 in response to the pandemic.
Dan Haug, budget director at the Office of Administration, said changing the income tax due date from April 15 to July 15 last year skewed revenue collections because more money was collected in the current fiscal year than last fiscal year. The issue was compounded in May especially, Haug said, because the income tax due date was moved from April 15 to May 17 this year.
"These numbers are very skewed," Haug said. "It's just a tough time to be using this to sort of make comparisons to revenues because last year was artificially low and this year is artificially high, so you get these massive changes in the growth rate."
Despite the inflated collections, Haug said the state revenue is doing better than expected when he was reviewing it in December and January for the governor's proposed budget. Haug said the state is slated to beat the revenue forecast of $10.2 billion for fiscal year 2021, which ends June 30. He said the state should also be in a good place to reach the fiscal year 2022 budget forecast passed by the Missouri General Assembly.
Gov. Mike Parson posted a link June 5 to the May 2021 General Revenue Report on Facebook.
"Thanks to our balanced approach to COVID-19, Missouri is in a much better position than what was originally projected," Parson wrote in the post.
Haug said revenue for June should be positive as the state has fewer people receiving unemployment than it did last June, but the monthly revenue report for July is expected to show a negative change in collections.
"When you look at the July revenue report, it's going to look extremely bad because you're going to be comparing a relatively normal July to a July when we had an income tax due date," Haug said.
Haug said revenue report comparisons will likely look unusual through the next fiscal year. With an additional income tax due date in fiscal year 2021, comparisons to fiscal year 2022, with just one income tax due date, will likely show declines in revenue. Haug said in actuality the state is expecting a positive year for revenue next fiscal year.