State revenues down as Missouri prepares for budget crisis
MDN Menu
MDN.ORG Mo. Digital News Missouri Digital News MDN.ORG: Mo. Digital News MDN.ORG: Missouri Digital News

State revenues down as Missouri prepares for budget crisis

Date: January 5, 2012
By: Jordan Shapiro
State Capitol Bureau
Links: FY2012 State Budget

JEFFERSON CITY - State revenue collections dropped more than two percent last month compared to December 2010 according to the General Revenue report released Thursday.

The 2.1 percent drop is unwelcome news to a General Assembly already faced with a budget shortfall of nearly $455 million from the last fiscal year. State Budget Director Linda Luebbering described the revenue report with one word -- "bad."

Overall, year-to-date General Revenue collections saw a 1.2 percent gain compared to the last fiscal year. The gain, however, is still small compared to the estimated 3.6 percent revenue growth for fiscal year 2012 projected by top budget officials a year ago.  

The hardest hit revenue area in 2011 was in corporate income tax receipts, which dipped 10.5 percent for the month of December. Sales tax receipts also dipped 4 percent last month despite the Christmas holiday shopping season.

The fiscal year 2013 budget was already facing a decrease of $650 million from last year due to the use of one-time federal money that has now run out. The state budget took another hit when matching federal funds for Medicaid reimbursement decreased leaving a $90 million hole. The 3.9 percent projected revenue growth will bring $285 million to help offset the projected shortfall. Luebbering expressed confidence in the government's ability to handle the crisis.

"I don't really talk about it in terms of a shortfall because when the governor presents his budget it will be balanced," Luebbering said.

In order to combat the budget hole Luebbering said that Medicaid cuts would be on the table despite some restrictions imposed by the federal government. When states accepted money to help balanced their budgets in 2009, the federal government prevented them from cutting many Medicaid benefits including cuts in eligibility. One state--Maine--is defying the federal government by cutting eligibility, a cut Luebbering said will not happen in Missouri.

"We would not want to jeopardize our federal money we get for the Medicaid program," Luebbering said.

Missourians will get their first glimpse into solving the budget shortfall when the Governor presents his budget plan January 17. The General Assembly then has until May 11 to pass the state operating budget.

Missouri Digital News is produced by Missouri Digital News, Inc. -- a non profit organization of current and former journalists.