State revenues continue to lag and likely will through the remainder of this fiscal year, though the state budget director does see the possibility of an uptick during the next fiscal year.

Missouri is suffering from the recession. Year-to-date, state revenue is down 7.7%. A General Revenue Report issued by the Office of Administration seemed to provide unexpected encouraging news. It disclosed that state revenue in November rose 6.9%. It was an aberration. State Budget Director Linda Luebbering explains that the timing of when revenue arrived created the spike. She notes that revenue which normally arrives in October was a bit late, providing a significant increase in November.

Luebbering says that in assessing the state budget picture, it is more accurate to keep track of the year-to-date figures. Compared to the last fiscal year, state revenue remains in the doldrums, dropping from $2.93 billion in FY2009 to $2.71 billion this year.

“I wouldn’t think that next year would continue being negative,” Luebbering tells the Missourinet.

Luebbering says this fiscal year will likely be a very negative year, coming on the heels of a fiscal year that saw general revenue fall 7%. Though the backdrop of the last two fiscal years creates a very negative atmosphere in which to make predictions, state revenue almost can’t go anywhere but up. Luebbering expects revenue to begin trending upward and end the fiscal year June 30th at about 4% below last year’s totals.

If that holds true, it would keep revenue in line with the newly adjusted state budget. Governor Nixon has cut a total of $634 million from the state budget approved by the legislature during the last legislative session. Nixon vetoed $105 million and withheld an additional $325 million early into the current fiscal year. He announced in late October another $204 million in budget cuts. The Nixon Administration hopes that is the final adjustment for the current fiscal year.

The legislature returns to the Capitol next month for the 2010 legislative session. Luebbering says she will advise lawmakers to expect a bit brighter outlook, though she says budget forecasting can be difficult in times like these.

“In normal years it’s not that difficult to get fairly close, but we have not been in normal times the last couple of years,” Luebbering says. “This economic downturn was very dramatic; very little history to help us figure out how to project and what to project.”

The Nixon Administration will talk with House and Senate leaders to reach a consensus revenue estimate upon which to build next year’s budget.

State General Revenue Report -November 2009

Brent Martin reports.

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