Not as bad as first feared. But the newest budget withholdings announced by Governor Nixon today are bad enough. He’s withholding $280 million from the budget for the fiscal year starting July 1. The state budget office had recommended a few weeks ago that he withhold $350 million but Nixon says an uptick in state revenue in May provides some hope that today’s withholdings will be enough.

By withholding the money rather than vetoing the appropriations, Nixon leaves the opportunity open to release funds later if state income perks up even more. [Audio & video clip after the jump]

School transportation funding takes the biggest hit—$70 million. He’s also withholding $54 million from a couple of state college scholarship programs although he says the Missouri Higher Education Loan Authority will be announcing a $30 program in a few days that will ease the pain of those two other scholarship programs.

Nixon is withholding $47 million in tax credits and $14 million each in Mental Health projects and in Medicaid provider reimbursements from the state.

The new fiscal year, FY11, begins in less than two weeks.

AUDIO: Nixon’s news conference  (27 min)