The state of Missouri collected just $280 million in corporate income tax revenue in fiscal year 2016, a 35 percent drop from the $435 million collected the previous year.
In his budget address in early February, Gov. Eric Greitens highlighted the drop, arguing the reason for it was “not enough people have quality jobs with great paychecks and businesses are struggling.”
Despite the new Republican governor’s bleak view of the economy, the state’s own numbers showed a far different picture. At the end of January unemployment was just above four percent, and sales and income tax revenues were both up 3 percent over the prior year.
So why the big drop in corporate income tax revenue?
Amy Blouin, the executive director of the Missouri Budget Project, said the decline is self-inflicted, noting that “the legislature made changes to tax policy that actually reduced corporate taxes and reduced them significantly.”
The non-profit group points to Senate Bill 19, sponsored by Sen. Will Kraus, R-Lee’s Summit, and passed in 2015. It changed how multi-state corporations have to allocate their profits among states, allowing them to reduce their tax liability in Missouri.
Read more: St. Louis Public Radio