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Report: MO Budget Could Swim in Red Ink 'til 2029

March 21, 2012

ST. LOUIS - As Missouri lawmakers debate the budget this week, a new report warns it could take the state a very long time to make it out of this recession. The Missouri Budget Project report finds this economic downturn to be much deeper than others.

Amy Blouin, the project's director, says her organization has crunched the numbers, which indicate that if state lawmakers can't find a way to bring in more revenue, it will take a very long time to recover.

"We are now at the point where it will take us at least 17 years to get back to the same level of purchasing power, once you adjust for inflation, that we had in fiscal year 2008."

Blouin says the state already has made big cuts in education and services to people most in need.

Lawmakers could start fixing the budget, she says, by passing an Internet sales tax. More than a dozen states, including Illinois, have passed such laws. Some online business owners say it would be cumbersome to collect the taxes, but traditional retailers say not charging taxes on Internet purchases is unfair to them.

Blouin says revenue from an Internet sales tax has the potential to grow as more Missourians shop online.

"It may be $16 milllion in the first year of collections, but over time it would have a significant impact."

Amazon now collects sales tax on purchases from customers in New York and several other states, but not in Missouri. Blouin says Missouri can't afford not to collect online sales taxes.

"Allowing them to have a competitive advantage over Missouri-based retailers is just simply not acceptable."

The Missouri Budget Project recommends closing loopholes and other tax updates in addition to an Internet sales tax. The National Conference of State Legislatures estimates that uncollected sales taxes from Internet purchases will cost all the states $23 billion this year.

The report is online at mobudget.org.

Mary Anne Meyers, Public News Service - MO