A slumping economy has hit hard the state’s bottom line.
Governor Nixon’s office has issued the Consensus Revenue Estimate for the next fiscal year and greatly revised the estimate upon which the current budget was built. The estimate is important. It guides both the governor’s office as it proposes a budget and legislative leaders as they write the budget, which will be one of the main tasks for this legislative session.
First, it appears the state revenue for the current fiscal year will fall $542 million short of what budget writers had projected. The present budget was built on a projected growth of 3.4%; expected to bring in $8.2 billion to the general revenue fund. It is now estimated that the general revenue this year will total $7.68 billion by the time the fiscal year ends June 30 th . That would be 4% less than the general revenue total of the previous year.
Governor Nixon has not announced whether he believes cost-savings will be enough to get through the current year or whether he will have to withhold money for state programs and services. Nixon is expected to announce his decision during the State of the State address Tuesday evening.
The revised number for the current fiscal year will serve as the bottom line for the coming fiscal year. Both the governor’s office and legislative leaders believe state revenue will grow only by 1% for the state budget that begins July 1 st . They have agreed to build a budget for next year based on an estimate that the state will receive $7.764 billion dollars for general revenue next year.
Nixon will outline his budget priorities during the State of the State address. Legislative leaders will take his recommendations into account when they work on the state budget.