Missouri economy 'turned off like a faucet'

Missouri economy 'turned off like a faucet'

COLUMBIA, Mo. (AP) — Missouri lawmakers agreed Thursday to try to spare colleges and universities from budget cuts despite plummeting revenues that the state budget director says are unlike anything he’s ever seen.

Budget Director Dan Haug announced that net revenue dropped more than 54 percent in April this year compared with April 2019, largely because Tax Day has been delayed until July. Overall state revenues decreased more than 6 percent so far this year compared with the same time last year.

“This is unlike anything I have ever seen,” Haug said. “I couldn’t even imagine revenues dropping as much as they did. To see the economy turned off like a faucet is incredible.”

State lawmakers agreed earlier this year to cut $700 million from Gov. Mike Parson’s original budget proposal for the upcoming fiscal year, which was based on rosier revenue projections before the coronavirus pandemic.

House lawmakers had planned on cutting state funding for public higher education by 10 percent next year in an attempt to balance the budget.

But House and Senate negotiators scraped together more than $13 million to keep funding for community colleges stable. Lawmakers also agreed to pad the budget with federal dollars so four-year schools will get stable funding if Congress sends the state more financial aid.

The negotiated spending plan still needs to be approved by the full House and Senate.

Lawmakers returned to the Capitol last week – after weeks off over concern about spreading COVID-19 – in a rush to pass a budget by their Friday deadline. That entailed completely revamping the budget, although it’s unclear if lawmakers’ planned $700 million in cuts will be enough.

Haug said the impact of the coronavirus on the state economy hadn’t been fully realized yet. He said May revenues would probably be a better indication of the state of Missouri’s economy after the virus shuttered businesses and spiked unemployment.

Some Democrats had argued for delaying work on the budget until later in hopes of getting a better picture of the state’s economy.

The governor is responsible for making further cuts if the state doesn’t get enough money to fully fund the budget approved by lawmakers.

The next fiscal year begins July 1.

Also on Thursday, House lawmakers voted in favor of exempting federal stimulus checks sent to individuals from state taxes. If enacted, that would mean Missouri taxpayers would each keep about $50.

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