Will the Drought Affect the State's Bottom Line?

JEFFERSON CITY, Mo. -- State tax collections for the first months of the state's financial year shot up by nearly 12  percent over last year at this time.

However, state budget chief Linda Luebbering says that's because the state received $39 million from the nationwide mortgage fraud settlement in July.

Luebbering says she is concerned about a decrease in state income tax collections.

"We'll obviously watch that item closely as we always do with individual income tax being our biggest source of revenue. We don't like to see it negative, but we are prepared to wait just a little bit longer and think that that will turn around."

Luebbering says it is possible that state revenues could take a hit when farmers total up their income for the year.

'It is going to have an impact on farmers' income. And then, when it has an impact on farmers' income, it's going to have an impact on the people they typically buy from."

Luebbering says it's too early to tell if that impact will be substantial. She says state sales tax collections could also take a hit with farmers not able to purchase as much.