'Fiscal Cliff' Could Affect Missouri Economy, Budget

4 years 11 months 1 week ago Tuesday, December 11 2012 Dec 11, 2012 Tuesday, December 11, 2012 4:32:21 AM CST December 11, 2012 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 suspect struck a victim, and suspects fired multiple rounds, brandished at least one firearm and took property... More >>
1 hour ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 11:45:00 PM CST November 18, 2017 in News
COLUMBIA – While in Chad, Haby Naya learned how to braid hair by doing her friend’s, sister’s and even her... More >>
1 hour ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 11:25:00 PM CST November 18, 2017 in News
COLUMBIA - If experience is important for success in sports, basketball players worldwide have much to learn from the Granny... More >>
2 hours ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 10:53:00 PM CST November 18, 2017 in News
ST. LOUIS (AP) — The nonprofit group behind the long-delayed streetcar set to operate in St. Louis' Loop area and... More >>
4 hours ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 8:41:00 PM CST November 18, 2017 in News
BOONE COUNTY - A 19-year-old college freshman was driving home for Thanksgiving break Saturday when a tire on his car... More >>
5 hours ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 7:15:00 PM CST November 18, 2017 in News
COLUMBIA - Dozens of people came out Saturday for the eighth annual Fall Into Art show at Parkade Plaza. ... More >>
7 hours ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 5:19:00 PM CST November 18, 2017 in News
HARRISBURG - A warm bed, a hot meal, and hugs from a loving family member are common enough memories for... More >>
9 hours ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 3:00:00 PM CST November 18, 2017 in News
CAMDEN COUNTY - Two Osage Beach residents were pronounced dead early Saturday morning following a single-car crash late Friday night.... More >>
10 hours ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 2:54:00 PM CST November 18, 2017 in News
JEFFERSON CITY - A Macon man and two others were hospitalized Saturday morning in one of two crashes that occurred... More >>
10 hours ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 2:24:00 PM CST November 18, 2017 in News
COLUMBIA – New blood pressure guidelines mean nearly half of adults in the U.S. that did not have high blood... More >>
10 hours ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 2:12:00 PM CST November 18, 2017 in News
ST. LOUIS (AP) — Officials are testing for asbestos among the debris left from a massive St. Louis warehouse fire.... More >>
11 hours ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 1:17:00 PM CST November 18, 2017 in News
ST. LOUIS (AP) — A Missouri prosecutor will not file criminal charges against a Southwest Airlines pilot arrested after Transportation... More >>
11 hours ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 1:07:54 PM CST November 18, 2017 in News
ST. LOUIS (AP) — A St. Louis man is facing charges for allegedly shooting a mechanic in a dispute over... More >>
11 hours ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 12:59:00 PM CST November 18, 2017 in News
KANSAS CITY, Mo. (AP) — The Christmas holiday begins this weekend at Union Station in Kansas City. The station... More >>
12 hours ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 12:55:00 PM CST November 18, 2017 in News
JEFFERSON CITY, Mo. (AP) — The state of Missouri is looking for input on how to spend $41 million from... More >>
12 hours ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 12:41:00 PM CST November 18, 2017 in News
COLUMBIA- The Columbia Holiday Festival is giving local vendors a platform to support mid-Missouri charities this weekend. The Holiday... More >>
13 hours ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 11:42:00 AM CST November 18, 2017 in News
COLUMBIA - Columbia police and fire department units responded to reports of an overturned car at Grayson Cottages early Saturday... More >>
17 hours ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 7:53:00 AM CST November 18, 2017 in Continuous News
CAMDENTON - The place a man envisioned as his retreat away from the hustle and bustle of regular life now... More >>
17 hours ago Saturday, November 18 2017 Nov 18, 2017 Saturday, November 18, 2017 7:05:00 AM CST November 18, 2017 in News
Columbia, MO
Broken Clouds 37°
1am 36°
2am 34°
3am 33°
4am 33°

Select a station to view its upcoming schedule:

Coming Up Next

12:32a
Open House NYC
1:02a
Open House NYC
1:30a
Inside Edition
11:00p
The Karate Dog
1:00a
Cops
1:30a
Paid Program

Tonight's Schedule

6:00p
Football Night in America
7:20p
Sunday Night Football
7:00p
The Face of an Angel
9:00p
KOMU 8 News @ Nine on The CW
9:30p
Family Guy