Delays expected for Missouri tax returns

Tuesday, April 7, 2009 | 12:01 a.m. CDT

JEFFERSON CITY — The state revenue shortfall this fiscal year means many Missourians will face a delay in receiving their income tax refunds.

To maintain the cash flow, pay state employees and run state-funded agencies and institutions, Missouri is delaying tax refunds and has borrowed $325 million from its budget reserve fund since February.

State Budget Director Linda Luebbering said Monday that an estimated $1.39 billion in total refunds will be paid to taxpayers. She also said all refunds will be paid out by or before June 30, the last day of this fiscal year.

"It's just a matter of managing our cash to make sure we can pay all of our bills," Luebbering said.

Ted Farnen, a spokesman for the state Department of Revenue, attributed the delay to less manpower and the budget process itself.

"We're trying to do more work with less money," Farnen said. "We normally hire 300 temporary employees to help process our tax returns. This year, we hired only 127.

"The other aspect of it is, just like any budget — especially here in Missouri where we have to have a balanced budget — we only have so much to work with for refunds. So if we use up the (revenue) for that time period, then yes, we have to wait a little bit until we have the actual money to give out those actual refunds."

Luebbering said the state is managing its cash flow and maintaining state operations, such as the public school and hospital systems, in several ways.

First, the state is constitutionally allowed to borrow money from its budget reserve fund as long as the borrowed money is paid back with interest by May 15 of the same fiscal year. For the seventh year in the past eight years, Missouri is taking money out of the reserve fund, which held $557 million at the beginning of this fiscal year. The state borrowed $175 million in February and $150 million in March from the reserve fund. Luebbering said she does not anticipate that the state will need to borrow further funds from its reserves for the rest of the fiscal year.

Second, spending reductions as requested by Gov. Jay Nixon have been put in place across all state departments "to the tune of just under $181 million," Luebbering said. These spending reductions are the main reason why less than half the usual number of temporary staff have been hired to help process income tax returns.

Finally, Luebbering said the state has to maintain the balance between refunds and payments to ensure that the budget line does not dip into the red and "to make sure that the timing of those payments out allow us to make sure we have enough cash in the bank."

"Our revenue comes in late in the fiscal year because we're so dependent upon individual income taxes, which come in fairly heavily in April," Luebbering said. "And our spending is more consistent throughout the year. So there are times that we either need to borrow from the budget reserve fund or do other things for cash-flow purposes in order to get us to the point in time when our revenue is coming in."

The state Revenue Department received about 1.6 million income tax returns by mid-March, Farnen said. He said the department staff anticipates receiving the remaining 1.2 million tax returns before the April 15 deadline.

Farnen also said receiving almost half of all the tax return forms in the last three weeks will result in a "big crunch" for the smaller temporary staff to process, as well as a delay in the state's receiving the revenue it needs to operate. That delay has necessitated the state's borrowing from the budget reserve fund and, in turn, might cause delays in Missourians' receiving their income tax refunds.

Luebbering said processing refunds is not taking significantly longer than in previous years. She said the average turnaround for tax refunds is just under seven days.

But Farnen said that once the surge of tax returns begins arriving in the state's Revenue Department office before April 15, the amount of paperwork and the varieties of tax returns will slow down the turnaround time.

Missourians who applied for the property tax credit receive priority, Farnen said. The credit, which is available to low-income Missourians, senior citizens and the disabled, will manifest either as a tax credit or a refund check. Either way, Farnen said, those taxpayers are first in line in the process.

"We made the decision to try and process those as quickly as possible because of who the recipients are," Farnen said. "We all need the money, but they really, really need the money. So our property tax credits are all the way caught up."

In late January, Nixon and Republican legislative budget leaders agreed to a revised estimated revenue shortfall of $261 million for the remainder of this fiscal year. That shortfall was not unexpected, Luebbering said.

"It's really right about what we were anticipating needing to do because we're staying right on track with our revised consensus revenue forecast," Luebbering said. "Unfortunately, that revised estimate is for a decline of about 4 percent, but we are right on track with that."

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Greg Collins April 7, 2009 | 12:50 p.m.

No excuses. If I have to pay my taxes on time, the state should be financially responsible for timely REPAYMENT of money that doesn't belong to it.

(Report Comment)
pam james April 13, 2009 | 9:16 a.m.

I am from st. louis and I had to google to find this story our local media hasn't said anything, and I agree with you Greg, if I have a deadline then I want my overpayment by a deadline. And to cause me to have to google this, when I went to wheres my refund at state website it just says it is still processing instead of info about a possible delay, I was really depending on the money. We working people need our money too, it may look like on paper we make money but after deducting over 4000.00 for healthcare on my w-2 and dealing with a family members chronic illness I dont have money either.

(Report Comment)
LINDA PANEK May 2, 2009 | 11:55 a.m.

If we don't pay our taxes on time, then we have to pay a pentalty. Why don't they pay us a pentalty for not paying us on time. Where did all the state's tax money go anyway????

(Report Comment)
John Porter May 5, 2009 | 12:36 p.m.

The real problem here is that it isn't the government's money. It is mine - that they took during the previous year. We, the taxpayers have to wait for Big Brother to give back to us what it took in excess of what we owed. Socialism may be good for a few, but it is bad for most!!!

(Report Comment)
Vickie Cannon June 17, 2009 | 3:42 p.m.

I am wondering why the government feels it is alright to retain my tax refund so they can balance their budget with our (the tax payers) refunds. I filed my tax refund well before the April 15th deadline and am still waiting on the money which could have payed a medical bill which has now being threatened to be put to collections because I keep promising that I will be getting my tax refund any day. When I check on the status it just says it is in processing and I am at the mercy of the Revenue Service which is frustrating to I am sure all the tax payers right now.

(Report Comment)
Jason Entermyer June 17, 2009 | 4:06 p.m.

Vickie may have a problem with your paperwork (or they have a problem with your paperwork!). I filed on April 15 and got both state and fed back before the end of May.

(Report Comment)
susie moore March 18, 2010 | 2:08 p.m.

I need that money soon... Why is their need more important than mine???

(Report Comment)
John Schultz March 18, 2010 | 8:39 p.m.

Susie, you might want to check the date on this story. It's almost a year old...

(Report Comment)
Benjamin Rogers May 14, 2010 | 11:31 p.m.

So... I get fined and charged interest when I don't give them money--but they can keep *MY* money without repercussion?

How about cutting the welfare payments to give back the money they've taken from those who work for a living?

(Report Comment)
f c May 18, 2010 | 2:19 p.m.
This comment has been removed.
f c May 18, 2010 | 3:09 p.m.
This comment has been removed.
Shelly Ford May 18, 2010 | 3:41 p.m.

I have an idea. Since the state now owes me a considerable amount of money & there's no payment date in about I keep ALL my MO employmen payroll tax deductions until you pay me? Seems fair doesn't it? Why should I pay you religously every week when you've had my return since March 12????

(Report Comment)

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