JEFFERSON CITY – On the same day the Federal Reserve chairman said he expects to see national economic growth by the end of the year, Missouri released statistics showing decreased revenue numbers in all areas when compared to this time last year.
Compared to 2008, general revenue collections are down 0.5 percent, or $32.5 million less than this time last year.
Sales and use tax revenue was down 7 percent from March and off 4.8 percent for the year. State Budget Director Linda Luebbering says these figures are a telltale sign that the economy has continued to worsen.
"It's a sign that people still don't have as much discretionary money to spend as they once did," she said. "Those numbers are further evidence that the economy isn't doing well."
Income tax collections were down 4 percent for the month and have been down 1 percent for the year.
"It is likely that revenues will decline even more than the 4 percent decline anticipated," she said.
As for the near future, Luebbering said May's numbers will likely look even worse than April's when compared with the same monthly total in 2008. According to her, this was because, last year, Missourians were allowed to submit their income taxes a month late.
However, Luebbering added that state revenue in May would likely still reflect a floundering economy – even when considering the effects of last year's tax loophole. She said all revenue numbers were lower than projected in January, but she said that wasn't a surprise.
"Based on what we've been seeing in terms of rising unemployment and lowered wages, it's not unexpected that revenues have been down further," she said. "At the same time, they are lower than we had anticipated three months ago."
There are differing opinions on whether the economy will rebound and revenue will rise in the short term, Luebbering said. Speaking in Washington, D.C., today, Federal Reserve Chairman Ben Bernanke said he expected to see economic growth in the country by the end of 2009.
He told The Washington Post that "tentative signs that final demand, especially by households, may be stabilizing."
However, Bernanke also said that unemployment rates may take longer to decrease, a projection that Luebbering said would further harm both income tax revenue and sales revenue. She expressed Tuesday that if people have less money, they will spend less.
According to the state Economic Development Department, Missouri's unemployment rate in March was 8.7 percent, a more-than 25-year high.