In these trying economic times, revenues coming into the state are lagging last year’s expected growth. The consensus revenue estimate was set at 1%, or approximately $7.7, billion in general revenue for the next fiscal year.
This year, Missouri is facing a budget shortfall of $542 million which is much less severe than many states in the Union. Fortunately, last year’s budget decisions have yielded a $281 million savings. So, unlike Iowa who is facing $750 million deficit for the next fiscal year or Kansas who is facing a $1 billion deficit or our neighbor to the east, Illinois, who is facing a $9 billion deficit, Missouri is weathering this economic climate with the need to trim our state spending by $261 million.
Although with many difficult, and sometimes controversial decisions, the House is committed to Missouri taxpayers by building a reasonable and responsible budget that will keep our state on a solid financial foundation by eliminating our reliance on hundreds of millions of dollars in one-time revenue sources from the federal dependency package that are intended to forever alter our relationship with the federal government and, once again, force our state government to live within its means without raising taxes.
The House has the following approaches to tackling Missouri’s budget problem at its disposal: tax and spend our way to a balanced budget (this was the 1990’s approach that got us where we are today), spend and then tax our way to a balanced budget (this was attempted during Governor Holden’s term), take all of the money from the federal dependency package to pay for ongoing expenditures with one-time monies setting up our state for revenue shortfalls in future years (this is Governor Nixon’s plan), or don’t spend more than the state expects to take in (this is how our families are expected manage our finances).
The education of our children is imperative to a successful future. The House will meet the phase-in payments for the foundation formula to fund our public elementary and secondary schools. This is an enormous win in the economic times that we live in. While other states are stopping Medicaid reimbursement to doctors and stopping income tax refunds from making back to those who overpaid their taxes, Missouri is keeping its promise to public education.
In order to keep our financial house in order, not every state program will remain unscathed – budget cuts will have to be made. Unlike Congress, we must have a balanced budget. The state of Missouri can’t print money to satisfy unrestrained and politically motivated spending habits.
While some budget cuts are looming, vital services will remain. Missouri is emerging nationally as a fiscal leader. It is imperative that we continue to practice restraint and an eye towards efficiency and productivity in state government. Not all of the decisions made by the House will be popular, but they will be necessary to preserve public education and caring for the most vulnerable among us.
Some wish to sell us on a “champagne budget” - one that offers little sustenance, but makes us feel much better. This plan rejects the status quo of self-denial of our present circumstances and the demands it places on future generations. Unlike Governor Nixon, the Missouri House of Representatives will not burden our children and grandchildren with greater debt simply to satisfy special interests for political gain.