'Fiscal Cliff' Could Affect Missouri Economy, Budget

4 years 1 month 1 week 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
The Missouri Highway Patrol said they were requested by the Columbia Police Department to conduct a death investigation in the... More >>
8 hours ago January 18, 2017 Jan 18, 2017 Wednesday, January 18 2017 Wednesday, January 18, 2017 4:16:00 PM CST in Top Stories
COLUMBIA - A Columbia man started a petition against a magic show featuring rare, white tigers at the University of... More >>
8 hours ago January 18, 2017 Jan 18, 2017 Wednesday, January 18 2017 Wednesday, January 18, 2017 3:49:00 PM CST in News
COLUMBIA – Washington D.C. isn’t the only city subject to cyber attacks. Mid-Missouri's power lines are at risk- but not... More >>
9 hours ago January 18, 2017 Jan 18, 2017 Wednesday, January 18 2017 Wednesday, January 18, 2017 3:26:00 PM CST in News
JEFFERSON CITY - Members of Decoding Dyslexia Missouri met at the State Capitol on Wednesday for the second annual Decoding... More >>
9 hours ago January 18, 2017 Jan 18, 2017 Wednesday, January 18 2017 Wednesday, January 18, 2017 3:20:00 PM CST in News
JEFFERSON CITY - Breaking political tradition, Gov. Eric Greitens did not present a proposed budget for the upcoming fiscal year... More >>
9 hours ago January 18, 2017 Jan 18, 2017 Wednesday, January 18 2017 Wednesday, January 18, 2017 3:10:00 PM CST in News
COLUMBIA- Officers responded to a robbery Wednesday morning at First State Community Bank on Golden Bear Drive. An initial... More >>
10 hours ago January 18, 2017 Jan 18, 2017 Wednesday, January 18 2017 Wednesday, January 18, 2017 1:33:00 PM CST in News
ST. LOUIS (AP) — There's new life for a plan to have St. Louis taxpayers help fund a new downtown... More >>
11 hours ago January 18, 2017 Jan 18, 2017 Wednesday, January 18 2017 Wednesday, January 18, 2017 1:20:06 PM CST in News
ST. LOUIS (AP) — A man whose conviction in a Missouri sports editor's death was overturned after spending nearly a... More >>
11 hours ago January 18, 2017 Jan 18, 2017 Wednesday, January 18 2017 Wednesday, January 18, 2017 1:03:08 PM CST in News
KANSAS CITY (AP) — A Kansas City man will serve three years in federal prison without parole for pointing a... More >>
13 hours ago January 18, 2017 Jan 18, 2017 Wednesday, January 18 2017 Wednesday, January 18, 2017 11:21:09 AM CST in News
LAS VEGAS (AP) — Police say a teenager and his mother are under arrest in the death of a Missouri... More >>
13 hours ago January 18, 2017 Jan 18, 2017 Wednesday, January 18 2017 Wednesday, January 18, 2017 10:49:00 AM CST in News
JEFFERSON CITY - Jefferson City Public Schools Superintendent Larry Linthacum will wrap up presentations for a possible solution to overcrowding... More >>
13 hours ago January 18, 2017 Jan 18, 2017 Wednesday, January 18 2017 Wednesday, January 18, 2017 10:47:00 AM CST in News
ST. LOUIS (AP) — St. Louis police are investigating the shooting death of a 15-year-old girl. Two masked... More >>
14 hours ago January 18, 2017 Jan 18, 2017 Wednesday, January 18 2017 Wednesday, January 18, 2017 10:07:00 AM CST in News
ROLLA (AP) — Authorities in south-central Missouri are investigating after a woman's body was found in a ditch along a... More >>
14 hours ago January 18, 2017 Jan 18, 2017 Wednesday, January 18 2017 Wednesday, January 18, 2017 9:57:00 AM CST in News
INDEPENDENCE (AP) — Authorities are investigating a homicide in the Kansas City suburb of Independence. KMBC-TV reports that... More >>
14 hours ago January 18, 2017 Jan 18, 2017 Wednesday, January 18 2017 Wednesday, January 18, 2017 9:54:00 AM CST in News
VANDALIA-The city of Vandalia is declaring a boil advisory until Thursday at 3 a.m. The city’s water pressure dropped... More >>
14 hours ago January 18, 2017 Jan 18, 2017 Wednesday, January 18 2017 Wednesday, January 18, 2017 9:43:00 AM CST in News
LIBERTY (AP) — The former campus president of a Kansas City trade school says he was fired for letting a... More >>
15 hours ago January 18, 2017 Jan 18, 2017 Wednesday, January 18 2017 Wednesday, January 18, 2017 9:31:00 AM CST in News
JEFFERSON CITY - Moody's Corporation has agreed to a settlement following a conduct investigation by the U.S. Dept. of Justice,... More >>
15 hours ago January 18, 2017 Jan 18, 2017 Wednesday, January 18 2017 Wednesday, January 18, 2017 9:11:00 AM CST in News
COLUMBIA – The advisory board for Columbia Water and Light is set to meet Wednesday morning to discuss its goals... More >>
17 hours ago January 18, 2017 Jan 18, 2017 Wednesday, January 18 2017 Wednesday, January 18, 2017 7:24:00 AM CST in News
Columbia, MO
Broken Clouds 45°
1am 38°
2am 38°
3am 38°
4am 38°

Select a station to view its upcoming schedule:

Coming Up Next

11:37p
Late Night with Seth Meyers
12:37a
Last Call with Carson Daly
1:07a
The Insider
12:30a
Cheaters
1:00a
Cheaters
1:30a
Seinfeld

Tonight's Schedule

7:00p
The Good Place
8:00p
Chicago Med
9:00p
The Blacklist
7:00p
DC's Legends of Tomorrow
8:00p
Supernatural
9:00p
KOMU 8 News @ Nine on The CW
9:30p
Seinfeld