The state continues to bring in less money than it expected and the Governor is yet again taking a red pen to a number of department’s 2010 budgets.
Governor Nixon is implementing $45 million of ‘spending restrictions’ for a number of state departments. It’s not the first time he’s had to do it in budget year 2010, and we asked State Budget Director Linda Luebbering if it might be the last.
“We’re hopeful that this is the last time, can’t guarantee that, though,” Luebbering said.
Luebbering says one of the more difficult cuts to make this time around was taking $8 million in spending out of the K-12 transportation budget. With this latest move, the Governor’s total spending restrictions and line item vetoes to the 2010 budget total $900 million.
“Every time that we have to make reductions it becomes more difficult. We’ve done multiple rounds this year our revenue is simply not where it needs to be to spend all of the money that’s been appropriated,” Luebbering said.
State revenue collections for April have fallen by 19% percent compared to last year. Luebbering says a major cause can actually be traced back to the financial troubles in the state in 2009. When people lost their jobs back then, they also often fell off the tax rolls, which would have been paid now. The average income tax refund is up 8%, while the average payment is down 30%. Year-to-date collections are down 13.8% from last fiscal year.
As the legislature is still working on the budget for Fiscal Year 2011, Luebbering says it’s tough to know whether the Governor will have to make the same types of cuts next year as well.
“I think it means a couple of things; one, we’re not recovering quite as quickly. Although a lot of this news is still based on the 2009 calendar year so it doesn’t necessarily foreshadow that things are going to be dramatically worse than anticipated next year. But we’ve already acknowledged that the revenue for next year is going to be less than we projected back in December,” Luebbering said.
That acknowledgement, of course, came in the form of the announcement that the legislature would need to cut an additional $500 million from the 2011 budget, which had already been significantly cut.