'Fiscal Cliff' Could Affect Missouri Economy, Budget

3 years 8 months 2 weeks ago December 11, 2012 Dec 11, 2012 Tuesday, December 11 2012 Tuesday, December 11, 2012 4:32:21 AM CST in News
By: Associated Press

JEFFERSON CITY (AP) - Missouri could lose about $125 million in federal funding for various programs and the state's military-related economy could take a $1 billion hit, according a projection of what to expect if officials in Washington don't reach a deal to avert the "fiscal cliff."

The estimates from the Washington-based Federal Funds Information for States show that automatic spending cuts due to begin in the new year could have disproportionate impact on Missouri because of the state's above-average concentration of defense contractors and military installations.

Unless Congress and the White House agree on an alternative deficit-reduction plan, the spending cuts will be coupled with the expiration of tax cuts enacted during President George W. Bush's administration to create what some have called a "fiscal cliff" because of the potential to nudge the nation back toward a recession.

The Federal Funds Information for States, which tracks the effects of federal policy decisions on states, projects that Missouri's share of the defense spending cuts could total just over $1 billion - the 10th-highest amount among states.

Separately, Missouri government could lose $125.8 million in federal funding in 2013 for dozens of programs, including aid to public schools that serve a high number of low-income students, the organization said. Funding for special education, early childhood programs and food subsidies for women and children also could take sizable cuts.

"It certainly has the potential to impact multiple programs in the state of Missouri, some of those which potentially could cause increased demand on state resources. There's no doubt about that," said Missouri Senate Appropriations Committee Chairman Kurt Schaefer, R-Columbia.

The exact impact remains unclear, especially if federal officials reach a compromise that includes a different mixture of program cuts or tax hikes than what is currently scheduled to occur.

That uncertainty comes as Missouri officials are trying to come up with a revenue projection that will be used by Gov. Jay Nixon and lawmakers to prepare a budget for the fiscal year that starts July 1.

Perhaps even more uncertain than the specific federal spending cuts is the potential impact that the federal tax changes will have on Missouri revenues. Because Missouri's tax code is tied to the federal one in some areas, Missouri's revenues could rise or fall depending on the federal actions.

For example, an increase in the federal income tax rate for individuals could have a negative effect on state revenues, because federal taxes can be deducted from the amount of income subject to Missouri taxes, said state budget director Linda Luebbering. If the federal government reduces its standard deduction for income taxes, that could have a positive effect on Missouri's revenues, because a greater amount of income then would be subject to Missouri's taxes, Luebbering said.

Luebbering said she isn't banking on the federal tax code changes being either a boon or a bust for Missouri.

"It's pretty much going to be a wash," she said, unless the combination of federal tax hikes and spending cuts pushes the nation toward a recession, in which case tax revenues are likely to fall.

Schaefer said the amount of federally generated uncertainty facing state budget "is ridiculous."

"It is extremely annoying and difficult to deal with when you're trying to come up with a state budget that funds everything from health care to public education and everything in between," Schaefer said. "A major partner of yours in that process is the federal government. Yet we're coming up now on the end of the calendar year, and the federal government has absolutely no clue on where they're going to be on some of these major issues."

 

More News

Grid
List
COLUMBIA - A celebrity basketball game was just one part of the first night of the “Back to School Explosion”... More >>
36 minutes ago August 25, 2016 Aug 25, 2016 Thursday, August 25 2016 Thursday, August 25, 2016 7:51:00 PM CDT in News
INDEPENDENCE (AP) — A man who drove 115 mph and used marijuana before a deadly suburban Kansas City crash has... More >>
57 minutes ago August 25, 2016 Aug 25, 2016 Thursday, August 25 2016 Thursday, August 25, 2016 7:30:00 PM CDT in News
COLUMBIA - As coaches and players conduct walk-throughs in preparation for Friday night football, many are also checking helmets after... More >>
1 hour ago August 25, 2016 Aug 25, 2016 Thursday, August 25 2016 Thursday, August 25, 2016 6:33:00 PM CDT in News
JEFFERSON CITY — The results of a Missouri audit released Thursday show ther e's a nearly $600 million backlog of... More >>
2 hours ago August 25, 2016 Aug 25, 2016 Thursday, August 25 2016 Thursday, August 25, 2016 6:25:00 PM CDT in News
COLUMBIA – Many of the advertising signs posted on utility poles or medians in Columbia are illegal. A new volunteer... More >>
2 hours ago August 25, 2016 Aug 25, 2016 Thursday, August 25 2016 Thursday, August 25, 2016 6:23:00 PM CDT in News
JEFFERSON CITY (AP) — A Missouri judge is blocking the state public defender director from appointing Gov. Jay Nixon to... More >>
2 hours ago August 25, 2016 Aug 25, 2016 Thursday, August 25 2016 Thursday, August 25, 2016 5:28:00 PM CDT in News
COLUMBIA - The Missouri Department of Transportation is celebrating the completion of the I-70 bridges project. The $17.5 million... More >>
3 hours ago August 25, 2016 Aug 25, 2016 Thursday, August 25 2016 Thursday, August 25, 2016 5:19:00 PM CDT in News
COLUMBIA - The Voluntary Action Center still has window units from Columbia Water and Light that can be exchanged for... More >>
3 hours ago August 25, 2016 Aug 25, 2016 Thursday, August 25 2016 Thursday, August 25, 2016 5:00:00 PM CDT in News
COLUMBIA - The re-opening of a part of the MKT Trail has been delayed two months. The Flat Branch... More >>
3 hours ago August 25, 2016 Aug 25, 2016 Thursday, August 25 2016 Thursday, August 25, 2016 4:56:00 PM CDT in News
ST. LOUIS (AP) — Agribusiness Archer Daniels Midland has settled a lawsuit over claims the company was behind a now-imprisoned... More >>
3 hours ago August 25, 2016 Aug 25, 2016 Thursday, August 25 2016 Thursday, August 25, 2016 4:53:00 PM CDT in News
JEFFERSON CITY - A Columbia man was indicted by a federal grand jury Wednesday for an investment fraud scheme. ... More >>
3 hours ago August 25, 2016 Aug 25, 2016 Thursday, August 25 2016 Thursday, August 25, 2016 4:37:00 PM CDT in News
COLUMBIA - The Columbia Convention and Visitors Bureau plans to contribute $1 million toward a new indoor sports facility in... More >>
4 hours ago August 25, 2016 Aug 25, 2016 Thursday, August 25 2016 Thursday, August 25, 2016 3:33:00 PM CDT in News
JEFFERSON CITY (AP) — Top military officials ga thered at the Missouri Capitol to mark the retirement of a Missouri... More >>
4 hours ago August 25, 2016 Aug 25, 2016 Thursday, August 25 2016 Thursday, August 25, 2016 3:31:56 PM CDT in News
COLUMBIA - A car collision caused an SUV to flip onto its side on College Avenue Thursday. A truck... More >>
5 hours ago August 25, 2016 Aug 25, 2016 Thursday, August 25 2016 Thursday, August 25, 2016 3:16:00 PM CDT in News
COLUMBIA - The Missouri School of Journalism announced a new diversity program Thursday. The plan is called the "Student... More >>
6 hours ago August 25, 2016 Aug 25, 2016 Thursday, August 25 2016 Thursday, August 25, 2016 2:25:00 PM CDT in News
COLUMBIA – A spike in traffic deaths is correlated to low gas prices nationwide and especially in Missouri, according to... More >>
6 hours ago August 25, 2016 Aug 25, 2016 Thursday, August 25 2016 Thursday, August 25, 2016 1:49:00 PM CDT in News
ST. LOUIS (AP) — Authorities have identified a man whose body was found in the Mississippi River at St. Louis.... More >>
6 hours ago August 25, 2016 Aug 25, 2016 Thursday, August 25 2016 Thursday, August 25, 2016 1:44:20 PM CDT in News
COLUMBIA (AP) — Universi ty of Missouri's journalism s chool is starting a new program to recruit diverse high school... More >>
6 hours ago August 25, 2016 Aug 25, 2016 Thursday, August 25 2016 Thursday, August 25, 2016 1:35:00 PM CDT in News
Columbia, MO
Broken Clouds 77°
9pm 76°
10pm 73°
11pm 71°
12am 70°

Select a station to view its upcoming schedule:

Coming Up Next

7:00p
NFL Preseason Football
10:00p
KOMU 8 News @ 10
10:35p
The Tonight Show Starring Jimmy Fallon
8:00p
Beauty and the Beast
9:00p
KOMU 8 News @ Nine on The CW
9:30p
Seinfeld

Tonight's Schedule

7:00p
NFL Preseason Football
7:00p
DC's Legends of Tomorrow
8:00p
Beauty and the Beast
9:00p
KOMU 8 News @ Nine on The CW
9:30p
Seinfeld