He doesn’t agree with their conclusion, but does back the action they are taking.
House Budget Committee Chairman Allen Icet, a Republican from Wildwood, has insisted that the legislature approved a balanced budget; that legislators cut more than $400 million from the budget submitted by Governor Nixon in January. While Icet doesn’t agree with the administration that the budget is $350 million out of balance, he does agree steps should be taken now to reduce spending.
“That is the governor’s opinion which I understand, but it is just the governor’s opinion,” Icet says. “Now, I do agree that they should continue to withhold, because we know where we’re going for 2012. So, I support that. But to say the budget is not balanced, I’d like to know the basis on which they make that statement.”
State Budget Director Linda Luebbering earlier this week announced that the Nixon Administration would be cutting $350 million from the budget on the first day of the fiscal year, July 1st. Luebbering says lawmakers failed to approve bills authorizing $89 million in government efficiency steps. She says other assumptions made in the budget likely won’t be realized, such as decreasing the Medicaid caseload. State sales tax collections continue to lag far behind. Luebbering now believes they will fall $200 million short of projections for the next fiscal year.
Icet says that the administration does need to prepare for Fiscal Year 2012, which is expected to be even worse that FY 2011 which begins this July. The legislature will not be able to rely on $900 million in federal budget stabilization funds, though $300 million might be made available.
No matter who might be right in the subject of balance or out-of-balance, lawmakers face an even tougher budget next year, according to Icet.
“The difficulty in cutting almost $500 million was a significant challenge. Trying to cut twice that amount next year would seem to be insurmountable.”
Icet says that even if the economy rebounds, it is highly unlikely to bounce back strong enough to bring tax revenues up to the levels seen in 2008.