Missouri still owes 300,000 taxpayers their refunds

Jourdan Mercurio is one of 300,000 Missourians waiting on their income tax refunds, and she is frustrated.

“I’m in college and work in a restaurant, so getting taxes back is a big deal for me,” said the University of Missouri-Kansas City student, who filed her taxes a week before the April 15 deadline. “I keep checking my status online, because I just don’t know what else do to.”

The delay in refunds is unusual, and the state blames cash-flow problems. It may be another month before all taxpayers have their refunds.

Thanks to electronic filing of taxes, delays of more than a couple of weeks should not be expected, said Gerald Geier, who is on the board of directors at the Missouri Association of Tax Practitioners.

“They’re not behind in processing, they are just choosing to hold the money for whatever reason,” said Geier of Raytown, who has worked in tax preparation for 35 years.

As of Thursday, Missouri had issued about 1,360,000 refunds, said Michelle Gleba, Missouri Department of Revenue director of communications. That left about 310,000 refunds, totaling more than $139 million, owed to state taxpayers.

“Last year at this time, all tax refunds had been issued,” Gleba wrote in an email.

“The department is working to issue refunds as quickly as possible and as cash flow allows; the amount of revenue available is one consideration.”

Returns are being processed in the order in which they are received, she said.

The delay in processing refunds reflects a weak revenue situation, said Amy Blouin, executive director of the Missouri Budget Project, a left-leaning non-profit that analyzes state finances and policies.

Missouri’s net general revenues increased by only 0.5 percent for the first 10 months of the 2014 fiscal year, falling below the estimates of 2.8 percent and 2.0 percent made by Gov. Jay Nixon and the General Assembly, respectively.

The refunds have to come eventually, Blouin said, and the hold-up reflects that the general revenue situation may be even weaker than the numbers indicate.

The Kansas Department of Revenue has 19,000 refunds left to pay out of 850,000, director of taxation Steve Stotts said. The process time is similar to last year, he said.

In 2009, Missouri also delayed hundreds of thousands of tax refunds because the economic downturn had slowed money coming into the state treasury.

Missouri is not the only state to delay sending out refunds.

Historically, those delays have been a common tactic for cash-strapped states, said Lucy Dadayan, senior policy analyst at the Nelson A. Rockefeller Institute of Government at the State University of New York.

A 2010 article in The New York Times reported that at least a half-dozen cash-poor states had delayed their tax refund checks, including Hawaii, Rhode Island and Iowa.

“Delaying refunds is certainly not the best strategy and is more like a crisis management strategy rather than an effective practice,” Dadayan said. “Delaying refunds is pushing the problem to the future.”

The wait has a much higher impact on low- to medium-income taxpayers, said Maggie Doedtman, program director at Next Step KC, a nonprofit providing free tax preparation and financial education.

“We primarily work with clients with a household income of less than $20,000 a year,” Doedtman said. “While their state refunds may be smaller, it can make the difference between making rent or being able to buy groceries that week.”

Doedtman said Next Step KC is encouraging its clients to contact their state representatives if they are still waiting on their refund. The nonprofit worked with about 7,700 clients from Kansas and Missouri during the past tax season, she said.

Missouri Rep. John Rizzo, a Kansas City Democrat, said he has received numerous calls from constituents about refund delays, but he has not heard exactly why the delays are occurring.

“It is hard to give refunds if there is no money in the tills,” Rizzo said. “Last year, no one foresaw revenue being this flat for so long. The tax policies in place don’t behoove us bringing money in for a quick turnaround, either.”

Taxpayers can check the status of their refund through an online inquiry form, but it will not give a timeline for when the returns will be received, Gleba said.

Val Lawrence, a Gladstone resident for 10 years, said she waited more than two months for her refund of $319. She said when she checked the status of her refund through the state website, the only information given was that it was still pending.

“You have to get it in by their due date, sometimes you go without or don’t pay bills to meet it,” said Lawrence, who finally got her refund Wednesday. “For them to take forever to send the refund, that doesn’t seem right. But you just sit and wait, there’s not much of a choice on that.”

To reach Caroline Bauman, call 816-234-4449 or send email to cbauman@kcstar .com.