Missouri revenue collections will record another $1 billion surplus this year and a growing economy will produce record receipts in the coming year, data released Tuesday by Gov. Mike Parson’s office shows.
Parson and legislative budget leaders released estimates for revenue in the year that begins July 1, 2022, showing revenues are expected to total $11.4 billion. That strong growth and the arrival of federal COVID-19 recovery funds puts the state in its strongest financial position in history.
“With general revenue expected to increase and large amounts of Missourian’s (sic) federal tax dollars returning to our state, we have a great opportunity and responsibility to make smart, meaningful investments that serve Missourians now and into the future,” Parson said in a news release.
At the end of November, the general revenue balance in the state treasury stood at $2.5 billion, or eight times larger than the average balance on Nov. 30 from 2013 through 2019. The balance should continue to grow because current spending is based on an estimate made a year ago that has proven to be far lower than actual receipts.
The consensus revenue estimate, used by Parson and the General Assembly to guide budget decisions, anticipates revenues will decline 0.5% in the current fiscal year and grow by 2.1% in the coming year.
Tax surpluses and extra federal funding mean there could be $8 billion or more in virtually unrestricted money available for Parson’s budget proposal, which will be presented in January.
The surplus from fiscal 2021 was just over $1 billion, and the current year’s budget is based on revenue estimates that were $1.3 billion below current expectations.
Lawmakers have heard testimony about a long wish list of building projects. Colleges and universities last month asked for $435 million for labs, classrooms and athletic facilities. In April, lawmakers heard from local governments and other agencies, requests that included $88 million for a new training academy for the Missouri State Highway Patrol.
When the current year’s budget was written, revenue for fiscal 2021 was expected to total $10.2 billion and then decline to $9.8 billion in the current year. Instead, revenue for fiscal 2021 totaled $11.2 billion and the new estimate is for revenue in the current year to top $11.1 billion.
Those aren’t the only funds available. The state is holding $1.34 billion from the American Rescue Plan Act, passed in March, with another $1.34 billion on the way.
That same law cut Missouri’s payments for Medicaid if it expanded eligibility. That took place Oct. 1, when the state implemented a voter-passed initiative after a court battle. As a result, the state can expect up to $1.2 billion in extra federal support for the program over two years, reducing demands on general revenue.
There are other large amounts on hand. In November, for example, the state transferred $500 million to a new Medicaid Stabilization Fund. That is enough money to pay the estimated state cost for Medicaid expansion for more than four years.
The money came from another cut in the state’s contribution to Medicaid, related to the extra expense of managing the COVID-19 pandemic.
There’s still $209 million in a fund used to bank those extra federal dollars and another $181 million in a budget stabilization fund that can be tapped at any time.
In the news release, House Budget Committee Chairman Cody Smith, R-Carthage, and Senate Appropriations Committee Chairman Dan Hegeman, R-Cosby, said they agreed with the estimate for record revenue.
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