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By Brian R. Hook, Missouri Watchdog
Although individual income tax collections are increasing in Missouri, the unemployment rate across the state is also on the rise, edging up to 9.4 percent, placing further strain on the state’s budget.
The seasonally-adjusted unemployment rate was 9.4 percent in October, up from 9.3 percent in both August and September, according to data released Monday by the Missouri Department of Economic Development.
Unemployment was 9.3 percent in October last year.
Nationally, unemployment was 9.6 percent in October.
Since unemployment benefits are shared by the state and federal government, a higher unemployment rate means the state will need to pay out more in benefits.
But as the unemployment rate edged higher last month across the state, individual income tax collections by Missouri also increased, according to figures released earlier this month from the Missouri Office of Administration.
As Missouri Watchdog reported, individual income tax collections increased 7.7 percent in October compared to last year in the same month. And individual income tax collections increased 2.9 percent for the fiscal year-to-date, starting on July 1, from $1.54 billion last year during the same period to $1.59 billion this year.
“We were hoping to see improvement in individual income taxes and we saw that in October,” Missouri Budget Director Linda Luebbering told Missouri Watchdog earlier this month, adding that the withholding taxes component of individual income tax collections means more people are working across the state.
Overall, net general revenue collections in Missouri increased 3.6 percent for the fiscal year-to-date from $2.15 billion last year to $2.23 billion this year. For October, collections increased 7.6 percent to $442.7 million.
While Luebbering said that she expects collections to match estimates for the rest of the fiscal year, she is also still expecting a $500 million to $600 million budget shortfall for fiscal 2012. Missouri lawmakers, meanwhile, are starting to take an in-depth look at the upcoming state budget this week, trying to find efficiencies.