Proposed tax cut, declines in unemployment, gas prices highlight Missouri economics

(The Center Square) – Missouri’s economic landscape was shaped by two data points this week and an announcement on Monday about a tax cut.

Missouri’s unemployment rate of 2.5% in July, subject to revision, is the lowest recorded rate in Missouri since the data series began in 1976, according to the Missouri Economic Research and Information Center.

Even though the price for a gallon of gasoline is 22% higher than last year, according to AAA Gas Prices, prices decreased 25% ($1.20 a gallon) during the last two months, from a high of $4.68 on June 16 to Friday’s price of $3.48. The national price for a gallon of unleaded today was $3.91.

Joplin had the lowest price in Missouri for a gallon of unleaded at $3.31, and Jefferson City was the highest in the state at $3.69.

Republican Gov. Mike Parson on Monday will provide details on a special legislative session on extending agricultural tax credits and a state income tax cut. His schedule for next week includes stops in St. Joseph, Kansas City, St. Louis, Columbia, Kirksville and Springfield to promote his agenda for the special session.

Parson posted photos of meetings on tax cuts with Republican members of the House of Representatives on social media during the last few weeks. He also met with Senate Democrat leaders.

Parson vetoed House Bill 2090, a $500 million tax rebate, on July 1. It was designed to provide a one-time $500 tax rebate for individuals making less than $150,000 per year and $1,000 for joint filers making less than $300,000 a year.

“… this proposal does little to assist the state’s lowest income individuals and families, including those on fixed incomes such as disabled individuals, retirees, and Social Security recipients,” Parson wrote in his veto letter. “I am committed to substantial tax relief for all Missourians.”

Parson’s proposing cutting the state income tax rate from 5.4% to 4.8% for most taxpayers.

Missouri’s Office of Administration announced July’s general revenue collections increased 38.3% compared to July 2021, from $701.3 million to $970.3 million.

July’s individual income tax collections increased 42.3%, from $480.5 million last July to $684 million last month. Sales and use tax collections increased 16.9%, from $212.5 million last July to $248.5 million last month.

The state’s unemployment rate decreased three-tenths of a percentage point compared to June and is down from 4.3% last July.

Missouri’s labor force participation rate, defined as the percentage of the population that is either working or actively looking for work, was 62.9% in July, up two-tenths of a percentage point from June but down six-tenths of a point from last July. The national labor force participation rate was 62.1% in July.

Non-farm payroll employment in Missouri increased by 24,800 jobs from June to July. Jobs in the private sector increased by 10,500, and government jobs increased by 14,300. The number of jobs in the state increased by 52,500 compared to last July.

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