An improvement in state revenue has eased budget pressure for the current fiscal year, but Governor Nixon predicts another lean budget next year.
A surge in corporate income and franchise tax collections boosted state revenue, making it less likely Governor Nixon will have to withhold any more money from the current state budget. Nixon says the improving revenue picture won’t overcome the loss of federal funding next year.
“I do say that we will have to make some hundreds of millions of dollars in cuts across the entirety of the state for next year’s budget if things continue the way they are,” Nixon says. “But I’ve had to take about $1.5 billion out of the budget so far. As we move into November and early December, we’ll begin the process of doing the consensus revenue estimate for next year and begin the process of working with our departments and the legislature to get a budget that Missourians know will deliver needed services.”
The consensus revenue estimate is a key figure in the drafting of a state budget. The governor’s office and legislative budget leaders meet and review the latest revenue figures and projections. They then settled on a forecast for state revenue for the next fiscal year. That figure is used to construct the state budget.
State revenue has seen a slight uptick of late. September numbers show a surge in corporate income and franchise tax collections, up 23% for the month, pushing year-to-date growth up to 15 ½%. Net general revenue collections for the year have increased by 2.6%.
In the current fiscal year, federal budget stabilization dollars totaling $923 million have been used to prop up the state budget and keep from cutting deeper into state programs and services. Federal funding drops to $209 million next year. The legislature will have the opportunity early in the next session to appropriate an additional $189 million in federal education funding.
A lot of new faces will decide budget issues next year. The Missouri House is losing nearly 70 of its 163 members due to term limits. Other incumbents could be defeated November 2nd. The legislature begins a new session in January.
Mike Lear, KWIX, contributed to this report.