A Missouri think-tank looks ahead at state budget forecasts and worries about looming shortages.
The Missouri Budget Project doesn’t see any real problems this fiscal year, but does see trouble ahead. Economist Tom Kruckemeyer says state revenue growth has slowed and tax cuts will reduce money coming into the state treasury. Kruckemeyer doesn’t worry about the current fiscal year. He says there is enough of a budget surplus to overcome a weaker revenue stream. The real worry, according to Kruckemeyer, begins in the fiscal year that starts July 1 st of next year. It could culminate in a $400 to $500 million dollar shortfall in the Fiscal Year 2010 budget.
Kruckemeyer says some of the tax credits approved by the legislature during the special legislative session might stimulate the economy and bring more revenue in, but not the Social Security tax cut. Kruckemeyer rejects any suggestions that that tax cut will stimulate the economy. He sees it only as a $120 million drain on state revenue.
Kruckemeyer insists it will be hard for lawmakers to undo the damage they did during good economic times. He points out that while it is easy for lawmakers to cut taxes, they can’t raise them beyond a limited point without a vote of the people. And he says Missourians have proven to be a very conservative state when it comes to approving tax increases.