An agreement has been reached between the Nixon Administration and state lawmakers on how much revenue the state is likely to receive next year and while the number is big, the growth is small.

State lawmakers build the budget based on the consensus revenue estimate, which for Fiscal Year 2011 will be $7.225 billion. State Budget Director Linda Luebbering points out that is only slightly larger than the $6.97 billion expected to come in this year, which would be a 6.4% decline from the previous year.

“So, we’re actually expecting, for the second year in a row, over a 6% decline in revenue collections,” Luebbering tells the Missourinet.

A year ago, the state legislature approved a budget based on a revenue estimate of $7.7 billion, an estimate that proved far too rosy.

“So, we are right now projecting that we’re going be almost $800 million below what the budget was built on,” Luebbering says.

It has been a difficult budget year. State lawmakers based the budget approved during the session last year on that $7.7 billion figure for general revenue. When collections fell far short, Gov. Nixon was forced to cut $634 million to keep the state budget balanced. Luebbering adjusted the revenue estimate downward to the current $6.9 billion mark. Nixon likely will have to take further action to align the budget with revenue. Luebbering expects additional budget cuts, which she terms restrictions, before the current fiscal year ends June 30th.

“We’re still working through the specifics on those numbers and what will and what won’t be restricted,” says Luebbering.

The revenue estimate for next year is an agreement by the Nixon Administration with budget writers in both the Senate and House. It is announced jointly by Nixon, Senate Appropriations Chairman Rob Mayer (R-Dexter) and House Budget Chairman Allen Icet (R-Wildwood). The three also announced the adjusted revenue projection for the current budget. The revenue estimate is based on the belief that the economy is starting to turn the corner, which will provide an uptick in state revenue.

Still, state revenue lags far behind previous years. Luebbering points out that even if state general revenue meets the projection, it will fall $800 million below the state collections for Fiscal Year 2008. Luebbering says state revenue won’t turn around until the economy turns around.

“Absolutely,” Luebbering responds. “We are very tied to the individual income tax as our number one source and when people start working again, our revenue will start to improve.”

Until then, expect tight budgets to continue. Luebbering points out that the pain extends beyond general revenue. Lottery proceeds and gambling revenue taken from casinos also have fallen short of projections, which could affect public schools.

Brent Martin reports (:60 MP3)