Missouri
Missouri tax revenues declining in first months of fiscal year, raising concerns • Missouri Independent
Missouri’s general revenue has lagged behind inflation for two years in a row. And with that gap widening, the next few months could determine whether state revenue will see a year-over-year decline for the first time in more than a decade.
“September is a good sort of bellwether one for us, because that’s where we get quarterly payments from both individuals and corporations,” Dan Haug, Gov. Mike Parson’s budget director, said in an interview with The Independent last week. “There’s not a lot of significant due dates in July and August, so we try not to even really look at what trends are until we get through the end of September.”
Through Friday, general revenue receipts are down more than 3% compared to the same period in fiscal 2024.
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Revenue grew 2.74% in fiscal 2023, while inflation was calculated at 3% by the federal Bureau of Labor Statistics. In fiscal 2024, which ended June 30, revenue grew 1.47%, while inflation was again pegged at 3%.
Missouri isn’t the only state suffering from sluggish revenue growth, according to a recent report from Pew Charitable Trusts. During the COVID-19 pandemic, many states — including Missouri — enjoyed a surge of revenue that drove new spending and tax cuts.
Missouri enjoyed double-digit revenue growth for two years, a trend that ended in early 2023. Nationally since the start of fiscal 2023, the report states, state government revenues have fallen below inflation rates and below the growth trend seen before the pandemic. That is the first time in 40 years that has happened outside of an economic recession.
“There’s less fiscal flexibility, but it’s unclear whether states will be really under strain or not, but it’s going to be more difficult than before,” said Alexandre Fall, a senior associate with Pew who was the main author of the report.
As they wrote this year’s budget in the spring, the Republican-led legislature tried to limit ongoing general revenue spending to the anticipated revenue of $13.2 billion. But even after Gov. Mike Parson vetoed $1 billion, the budget anticipates spending $15.1 billion in general revenue, dipping into surpluses accumulated during the surge in 2021 and 2022.
House Budget Committee Vice Chairman Dirk Deaton, a Republican from Noel, said lawmakers must continue to limit ongoing spending to new revenue.
“If revenue is lower in the future we will have to look carefully at core spending items to make sure the state budget is on a sustainable path and Missouri is well positioned to balance the budget year after year,” Deaton said.
State revenue was down in the early part of fiscal 2024 but ended up with modest growth, Deaton noted.
State Rep. Peter Merideth of St. Louis, the ranking Democrat on the Budget Committee, said future legislatures should commit to meeting state needs instead of hanging on to surpluses. Merideth is not returning to the House due to term limits.
Any spending cuts tied to the flow of revenue, rather than to the state’s total available resources, will fall heavily on education programs, Merideth predicted.
“We will cut education further,” he said. “Maybe it’s on the transportation line, or maybe it’s somewhere else, and we will cut higher education because those are about the only two slightly discretionary places that the legislature has to cut with large sums of money.”
Sitting on a surplus
On June 30, the general revenue fund held $4.8 billion, down $960 million from the balance a year earlier. That is still the third-highest year-end balance in state history.
Some of that money is committed to multi-year building projects, such as a $300 million mental health hospital in Kansas City, but most of it is unencumbered.
Other surplus money was stashed elsewhere. The state is holding $2.4 billion transferred from general revenue for major projects including rebuilding Interstate 70 and expanding the state Capitol Building.
Another $1.8 billion was held in accounts that can be spent like general revenue.
The question for lawmakers and state officials is how to spend from surplus funds without exhausting them, said Liz Farmer, a fiscal policy writer at Pew.
“States are spending down balance dollars at a rapid rate,” Farmer said.
The budget presented by Parson in January anticipated an unencumbered general revenue balance of $1.9 billion on June 30, 2025.
Along with major projects, in the past two years lawmakers have used the surplus to fund smaller items in their districts. Parson has vetoed many of those items as he cut $550 million from the budget in 2023 and $1 billion approved this year.
Future lawmakers need to resist the urge to earmark funds for their district, Merideth said. Stagnant or declining state revenue should mean extra funds are reserved for filling shortfalls in important programs.
“We have a surplus to work with in the short term but we haven’t hit an economic crash, which at some point will happen in the future,” Merideth said. “That’s when we’re going to be in real trouble.”
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During the recession that began in 2008, revenues fell from about $8 billion annual to $6.7 billion a few years later. Haug, who has worked for both the legislature and the executive branch, said the state is in good shape in case of a recession.
“We’ve got a very healthy fund balance to help us get through a minor downturn, if there is one, although I’m not sure that there even will be one,” Haug said. “We’re in a lot better spot to weather this kind of stuff than we’ve been probably in any of the time I’ve been here.”
There are structural changes in the cost of state government that are permanent, thanks to the surge of revenue.
The pay of every state worker hired before the beginning of 2022 has increased at least 20.7% under pay raise plans proposed by Parson. Some workers have received much larger percentage boosts, from a longevity pay plan approved this year, increases in night pay for workers in prisons, mental health hospitals and other custodial institutions and approval of a minimum salary of $15 an hour for all state jobs.
With state agency staff vacancy rates averaging more than 10%, the cost of running the state will go up as workers are added.
“Increased state employee pay and salaries, as well as permanent tax cuts, were two very popular policy choices that were made across states and were made in Missouri,” Fall said. “But now that we’re seeing all this excess revenue kind of pull back, and states are seeing decreased flexibility, it’s unclear what comes next.”
Missouri has passed two large permanent tax cuts, with income tax rate cuts enacted in a special session in 2022, and a bill exempting Social Security benefits from state income tax in 2023.
Together, that legislation will reduce state revenue by $1 billion or more annually. The next step in the phased-in tax cut passed in 2022 will take effect on Jan. 1, cutting the top income tax rate to 4.7%.
Those cuts will generate economic activity that will sustain revenues, Deaton said.
“Missouri has made very clear through our tax policy we are more interested in growing the bank accounts of the people as opposed to growing the amount of monies coming to Jefferson City,” he said.
With a new governor coming into office in January and new legislative leadership, tapping the surplus could be a temptation.
“Whoever is sitting in that governor’s mansion and whoever is sitting in the budget committee chair will make a significant difference and it’s hard to predict,” Merideth said.
Revenue picture
In the last full fiscal year before the pandemic, the Missouri general revenue fund took in $9.6 billion. In the fiscal year that ended June 30, the total was $13.4 billion, 1.47% more than in the previous year.
Two of the main sources of state revenue — personal and corporate income taxes — saw a decline in collections in fiscal 2024. So far this year, the decline in revenue received so far has extended to sales tax collections.
The surge in revenue coincided with the highest inflation rates in 40 years and sales tax growth led the way, thanks to consumers spending federal pandemic relief aid along with higher wages and prices.
There is no evidence in the Missouri economy that would show the current decline in sales tax collections is anything but temporary, Haug said.
“People may be pulling back a little bit temporarily to pay off debt and things like that, but eventually the fundamentals are what’s going to drive it,” Haug said.
Missouri added 62,400 jobs from July 2023 to July 2024 and personal income grew at an annual rate of 6.7% in the first quarter of the year. State GDP is up 1.6% on an annual basis and inflation, while slowing, continues, with prices nationally about 2.5% higher than a year ago.
“Long term, that’s what’s going to drive our revenues, and I think that’s still what’s going to drive our revenues,” Haug said.
With the end of pandemic restrictions, consumers are spending more on non-taxed services and travel, Farmer said, as well as substituting cheaper goods when they make purchases.
Missouri estimates its revenue each December for the remainder of the fiscal year and the coming year. A longer horizon for budget outlooks would make the state better prepared for possible trouble, she said.
“That is one of our key benchmarks for state fiscal health, and something that could be really helpful for assessing what these impacts on personal income tax and those cuts look like for the state down the line for revenue,” she said.
A longer-term outlook may be helpful, Deaton said, but experience shows that the short-term estimates aren’t particularly accurate.
“There have been times they were very close and other years when estimates missed badly,” Deaton said. “The further you extend out, the greater the margin of error.”
Missouri
Nonprofit drops $150K into PAC supporting lame-duck Missouri governor • Missouri Independent
The not-for-profit group originally set up to pay for Gov. Mike Parson’s 2021 inauguration gave $150,000 this week to the political action committee that helped get him elected.
Parson is leaving office due to term limits and has said repeatedly that he does not intend to be a candidate for public office again.
The PAC, Uniting Missouri, received the donation on Monday from Moving Missouri Forward Inc., which also paid the expenses to write and publish a biography of Parson called “No Turnin’ Back” that the governor has promoted extensively since its publication in February.
The origin of the $150,000 is unclear, since Moving Missouri Forward is not required to disclose its donors. But none of the money donated Monday was generated by sales of the Parson book, attorney Marc Ellinger said in an interview with The Independent. A different not-for-profit called Moving Missouri Forward Foundation receives all proceeds from book sales, he said, and is headed by First Lady Teresa Parson as president and Claudia Kehoe, wife Gov.-elect Mike Kehoe, as vice president.
“It paid for the book and contributed the entire cost of it and everything to the foundation as a charitable contribution, so that the foundation would have an ability to raise money through the book,” Ellinger said.
Ellinger is the registered agent for both Moving Missouri Forward Inc. and Moving Missouri Forward Foundation.
Uniting Missouri PAC had about $93,000 on hand at the end of October. Reports filed with the Missouri Ethics Commission show it raised about $1.3 million since the start of 2023 and spent about $775,000 this year helping two officeholders Parson appointed, Kehoe and Attorney General Andrew Bailey, win hotly contested Republican primaries.
Uniting Missouri has also spent about $120,000 for Parson’s trips to watch the Kansas City Chiefs win the two most recent Super Bowls.
Tom Burcham — a former Republican state lawmaker from Farmington with close ties to Parson’s longtime friend and fundraiser, lobbyist Steve Tilley — is in charge of Uniting Missouri. It is unclear why the PAC needs to keep raising money to support a candidate who is no longer running for public office, and Burcham did not respond to a request for comment.
Burcham is also the registered agent for a not-for-profit created in September called 57 Foundation Inc., in reference to Parson’s position as the 57th governor of the state. The nonprofit held a fundraiser Nov. 14 in Kansas City where donors paid as much as $10,000 for a table and pre-event reception with the Parsons.
The purpose of 57 Foundation, according to its incorporation papers, includes “providing essential resources and support to needful and vulnerable Missourians who cannot adequately help themselves. The foundation’s activities are inspired by and aligned with the legacy of public service and contributions of Missouri’s 57th Governor, Michael L. Parson.”
The Moving Missouri Forward Inc. donation to Uniting Missouri is roughly equal to the remaining funds raised on behalf of Parson, Ellinger said.
It will now transition to become a vehicle for funding Kehoe’s inauguration, he said.
Soon after Parson’s 2021 inauguration, Moving Missouri Forward Inc. released a list of donors who contributed $500 or more to the $369,115 raised for the festivities. The list did not include the specific amounts donated.
As a not-for-profit 501(c)(4) entity, it is not required to reveal its donors. It is required to file a statement of revenues and expenses annually with the IRS. The most recent report, filed in November 2023 and covering 2022, shows $3,000 in contributions in 2022 and $40,563 in cash on hand at the end of the year.
The filing also showed a $25,000 contribution to the Moving Missouri Forward Foundation. The foundation is a 501(c)(3) entity and contributions are tax deductible.
The purpose of the Moving Missouri Forward Foundation, according to its creation filing, is to “aid, assist, or help Missouri’s children, including but not limited to Jobs for America’s Graduates-Missouri and children with autism and special needs.”
Mike and Teresa Parson have been co-chairs of Jobs for America’s Graduates-Missouri since 2016, when he was elected lieutenant governor.
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STARKVILLE — Mississippi State football is coming off its open week with no new injuries.
The Bulldogs’ injury report for Week 13 did not show any additions from their most recent SEC injury report, in Week 11 against Tennessee. MSU (2-8, 0-6 SEC) hosts Missouri (7-3, 3-3) at Davis Wade Stadium on Saturday (3:15 p.m. CT, SEC Network) in the final home game of the season.
The Tigers listed starting quarterback Brady Cook as probable after he returned from an injury last week.
The SEC newly mandated this season that each team provides injury reports for conference games. The first reports are revealed on Wednesdays and updated daily until the final report 90 minutes before kickoff. The full report is below.
Mississippi State football injury report vs Missouri
This will be updated daily as the injury reports change.
Mississippi State
- QB Blake Shapen: Out
- CB Traveon Wright: Out
- WR Creed Whittemore: Out
- WR Trent Hudson: Out
- RB Keyvone Lee: Out
- DL Kalvin Dinkins: Out
- DL Kedrick Bingley-Jones: Out
- OL Canon Boone: Out
Missouri
- WR Mookie Cooper: Out
- DE Darris Smith: Out
- QB Sam Horn: Out
- LB Khalil Jacobs: Out
- DE Joe Moore: Out
- OL Connor Tollison: Out
- S Tre’Vez Johnson: Probable
- QB Brady Cook: Probable
Sam Sklar is the Mississippi State beat reporter for the Clarion Ledger. Email him at ssklar@gannett.com and follow him on X @sklarsam_.
NORMAN — The bye week was Oklahoma’s final chance to reset before ending the year with the gauntlet of Alabama and LSU in consecutive weeks.
To have a chance to pull off an upset either in Norman on Saturday night or in Baton Rouge after Thanksgiving, the Sooners will need much better play from their quarterback.
Jackson Arnold fumbled three times in OU’s loss to Missouri, losing two of them including the game-ending scoop-and-score, which was just the latest hiccup in the quarterback’s year-long turnover issues.
And while the offense has plenty of problems across the board, from the lack of explosive plays to protection issues by the offensive line, Oklahoma (5-5, 1-5 SEC) coach Brent Venables said the process to keep Arnold confident after another batch of back-breaking turnovers is still ongoing on the practice field.
“I think it’s gonna be the same type of experience it’s gonna be for the rest of his career and he’s no different than any other player other than he’s the face,” Venables said on Tuesday. “That goes along with that position at a place like the University of Oklahoma. That’s a position that’s a little bit … it’s a bit like the head coach position. There’s a different type of microscope and there’s a different type of focus and that’s okay he’s got broad shoulders to handle that.
“… Improving and developing, making mistakes, learning from the good and the bad… that’s just a daily task. He’s got a huge part in that experience and the development and the improving and taking ownership. You can’t deflect it. You have to have great awareness, you have to have great self-awareness and you’ve got to have great humility and then you have to have respect for what I need to do, his part, in order to improve. And that’s not just him, that’s everybody around him.”
Reviewing the loss, Arnold took full accountability for his mistakes and got to work throughout the bye week to ensure it won’t happen again.
“Obviously it was a heartbreaker, you never want a game to end like that,” he said on Monday. “For me in the quarterbacks room, I’ve got to look back at the film and watch it. I can’t fumble like that, can’t turn the ball over but at the same time, we’ve got two more games. We’ve got two more great teams we’ve got to play so we’ve got to put it behind us and move forward.”
Arnold also said him and the entire team were happy to be able to get an extra week to prepare for the No. 7-ranked Crimson Tide (8-2, 4-2), as Kalen DeBoer’s team continues to get better and better throughout the season.
But Arnold also got another boost on Monday.
He was named a captain by Venables and the coaching staff for the home finale, something that the OU coach said has been earned throughout Arnold’s attitude in practice all throughout the season.
“We love Jackson, and we believe in him,” Venables said. “But it’s a sign of he’s one of our best leaders that we have on the team. And there’s plenty of guys going through, rough spots that still have the ability to lead and fight and compete. So that goes along with that position as well. But representing the offensive side of the ball, those are two of our best leaders, Troy Everett and Jackson Arnold.”
That faith in the coaching staff wasn’t lost on Arnold.
“Yeah, no, it’s awesome,” he said. “Just knowing that the team and the coaches have my back and support me, it’s a good feeling for sure and I’m super appreciative of those guys.”
The Sooners are fully focused on knocking off Alabama and extending the program’s 25-year bowl streak, but there will be plenty of decisions that need to be made in the coming weeks.
Arnold committed to play for then-offensive coordinator Jeff Lebby, but he stayed to take over as OU’s central piece on offense.
The season hasn’t gone to plan, as evidenced by Seth Littrell’s dismissal, and without an offensive coordinator in place for the 2025 season, Arnold declined to shed light on what the next step is for him either way.
“I stay in my lane, I stay focused,” Arnold said about blocking out the outside noise surrounding a potential transfer. “I have Snapchat, so I talk to my friends, talk to my family, call them and talk to my girlfriend, but other than that I don’t go on any social media.
“And regarding my future, like I just — I mean, we’ve got two great teams left that we gotta go against, I’m just taking it week by week.”
So regardless of what the next month brings for Arnold and Oklahoma, the Sooners are focused in getting the best out of their young quarterback over the next eight quarters.
“It’s not him alone. It’s Coach (Kevin) Johns, it’s Coach (Joe Jon) Finley, it’s Coach (Bill) Bedenbaugh and Coach (DeMarco) Murray,” Venables said. “Making sure that their guys are prepared and detailed so that it helps him have success and stay into a rhythm — have a clean pocket and make good decisions. Everybody has a role in that and confidence as a young player is always something.
“The confidence usually comes from the work. And then, I’m not gonna lie, the confidence takes a shot when you’re not successful. And so we gotta do, all of us together, gotta do a good job of hitting it head on.”
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