A proposal has been scrapped by Governor Jay Nixon (D) to borrow money from Missouri’s state universities to help balance the state’s budget.
The idea was floated last month, in which $106 million in reserve funds from five of Missouri’s largest universities would be used to shore up the Department of Higher Education’s budget for the next fiscal year, which begins in July. That sparked an outcry from both university officials and lawmakers.
Halfway through Missouri's budget year, state revenues are sluggish.
The state budget office reported Thursday that Missouri's revenue increased 1.2 percent through the first six months of the 2012 fiscal year. Revenues need to grow at about 2.7 percent to meet the mark set by the budget.
Budget Director Linda Luebbering says the revenue report was "concerning." But she noted that the revenue could improve in the second half of the budget year. Missouri budgets take effect July 1.
Missouri lawmakers will be trying to plug a half-billion-dollar gap in next year's budget when they convene their 2012 session on Wednesday.
State budget director Linda Luebbering says much of the hole is due to a reduction in federal money, such as stimulus funds and Medicaid payments. However, State Senator David Pearce (R, Warrensburg) suggests that that number is not set in stone.
“There are predictions anywhere from $400 to $900 million, (that could) be our shortfall for this upcoming year," Pearce said. "How do you fill that? It’s gonna be tough.”
Missouri tax revenues have increased this year but are falling short of what was expected in the state's budget.
The state Office of Administration reported Friday that state revenues through November increased 2 percent, to $2.84 billion from $2.78 billion last year. So far, sales tax collections are up 3.4 percent but corporate income taxes are down 10.7 percent.
Missouri Governor Jay Nixon says he's monitoring the situation in Washington, following the so-called congressional supercommittee's failure to reach an agreement on reducing the nation's debt. He admits it's possible that the lack of action by Congress could impact Missouri's state budget next year:
"The uncertainties that you have in this job about the dollars coming in are very real…if they fail to reach the continuing resolution to move things forward by the end of the year is something we're looking at, to measure what that would do to the state," Nixon said.