So Far, So Fast: Missouri’s Budget Woes

I sat down to write a wrap for KBIA recently about the Missouri’s budget situation, and it hit me like a bolt of lightning just how far we’ve come in so short a time.  I’m still marveling at how quickly the state’s budget situation has devolved into a potential crisis.

Think about this:  In late January, Gov. Jay Nixon promised no cuts to K-12 and higher education (whatever the truth value of those are… that’s another blog…) in his State of the State address.  He said the state is one of the best-positioned in the nation to emerge quickly from the recession.  The official line was that state revenues will grow in Fiscal Year 2011 — not by a little, but by a lot:  3.6 percent.

By February, Nixon had thrown his optimistic projections out the window.  The federal government hadn’t come through on $300 million in stimulus aid that Nixon was counting on for the state.  What struck me was the lack of surprise at the Capitol as I talked to Republican lawmakers — one of whom told me few of his colleagues ever really expected that money to come through.

By March, the state had gotten so nervous about declining revenues that the Nixon administration officially revised down the revenue projections, called for almost $126 million in cuts from the FY10 budget, and announced that Nixon’s budget was about $500 million too big as proposed in January.  The greatest illustration is how Nixon talked about keeping state funding for education robust in his State of the Union address — and then in March, he was talking about merging the Department of Higher Ed with the Department of Elementary and Secondary Education.

In the interest of transparency, I have to admit that through this whole process I’m amazed at how raising taxes has not been seriously proposed as an option.  I’ve asked lawmakers on both sides about that possibility, and their answers are the same:  taxes can’t be the answer to the problem.  I just contrast that with the budget situation in my home state, Minnesota, where the divide between Democrats (the “DFL” there) and Republicans isn’t over what or how much to cut — but whether or not to raise taxes.  Politically, I don’t think it’s a feasible option in Missouri… but sitting where we are now, the fact that it isn’t on the table honestly alarms me.

But the timeline is baffling to me:  in not even two months, the state has gone from forecasting a 3.6% growth, to forecasting essentially no-growth, to forecasting about a 2% decline.

I don’t even want to think about next year, when the stimulus runs out.  Thankfully, next year isn’t an election year, and I’m not a legislator who’ll need to ultimately come up with the solution.

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