Missouri delaying refunds, borrowing from cash reserves
ASSOCIATED PRESS
Monday, Apr. 06 2009
Revenue Department spokesman Ted Farnan acknowledged Monday that cash-flow
concerns are one reason that tax refund checks are being delayed. He said the
agency gets updates about once a week from Nixon's budget office detailing how
much money is available to be refunded to taxpayers.
"If there were refunds that was ready to go and we didn't have the money for
a certain time period then, yes, we would have to hold that refund until we got
the money," Farnan said.
Also contributing to the delay is a budget-cutting reduction in the number
of temporary workers processing tax returns to 127 people this year instead of
the typical 300, Farnan said.
Tax returns filed electronically, or ones from seniors and the disabled due
tax credits, have been processed more quickly than traditional paper tax
returns that are mailed to the state. Some of those paper tax forms have taken
more than a month to process.
But now "there is a concerted effort to try and make a dent in some of those
paper returns" that have been piling up, Farnan said.
The longer the state takes to process tax returns, the longer it earns
interest on the money.
The state treasurer's office said Monday that Missouri is earning about a 2
percent return on its investment portfolio, meaning that $65 million would
produce about $108,000 in interest over a month.
Taxpayers waiting until closer to the April 15 deadline to file their
returns also many experience a delay in getting refund checks.
The Office of Administration's cash flow analysis projects $119 million in
tax refunds to be paid in June -- well above the $67 million in refunds paid in
June 2008.
