'Fiscal Cliff' Could Affect Missouri Economy, Budget

3 years 11 months 3 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 - Two members of the Delta Upsilon fraternity, who wished to remain anonymous, told KOMU 8 News Monday night... More >>
2 hours ago December 05, 2016 Dec 5, 2016 Monday, December 05 2016 Monday, December 05, 2016 11:33:00 PM CST in News
ST. LOUIS - Governor-elect Eric Greitens' wife Sheena was robbed at gunpoint Monday night. According to KSDK, St. Louis Police... More >>
4 hours ago December 05, 2016 Dec 5, 2016 Monday, December 05 2016 Monday, December 05, 2016 9:49:00 PM CST in News
JEFFERSON CITY - Missouri is seeing an increase in the number of state highway fatalities, and MoDOT is worried it's... More >>
6 hours ago December 05, 2016 Dec 5, 2016 Monday, December 05 2016 Monday, December 05, 2016 7:19:00 PM CST in News
COLUMBIA - A group of University of Missouri students exceeded everybody's expectations in gift giving this holiday season, and the... More >>
7 hours ago December 05, 2016 Dec 5, 2016 Monday, December 05 2016 Monday, December 05, 2016 6:49:00 PM CST in News
COLUMBIA – Columbia is looking to cut down on traffic deaths and serious injuries, and is looking to join a... More >>
7 hours ago December 05, 2016 Dec 5, 2016 Monday, December 05 2016 Monday, December 05, 2016 6:36:00 PM CST in News
COLUMBIA – The Columbia City Council voted 5-2 in opposition to an ordinance that would have revised some licensing regulations... More >>
8 hours ago December 05, 2016 Dec 5, 2016 Monday, December 05 2016 Monday, December 05, 2016 6:10:00 PM CST in News
COLUMBIA - Engineering crews kicked off three months of work on Nifong Blvd. on Monday as part of the road's... More >>
8 hours ago December 05, 2016 Dec 5, 2016 Monday, December 05 2016 Monday, December 05, 2016 5:49:00 PM CST in News
COLUMBIA - The fourth annual CoMoGives Campaign has some lofty goals for the 2016 holiday season, hoping to raise more... More >>
11 hours ago December 05, 2016 Dec 5, 2016 Monday, December 05 2016 Monday, December 05, 2016 2:19:00 PM CST in News
COLUMBIA — Columbia police grew furry faces during a No Shave November fundraiser to benefit a local children's home. ... More >>
12 hours ago December 05, 2016 Dec 5, 2016 Monday, December 05 2016 Monday, December 05, 2016 1:59:00 PM CST in News
COLUMBIA — A single-car crash left a Fulton woman dead on Interstate 70 near Highway 40 and the Midway Travel... More >>
12 hours ago December 05, 2016 Dec 5, 2016 Monday, December 05 2016 Monday, December 05, 2016 1:53:00 PM CST in News
ST. LOUIS (AP) — A fatal shooting on Interstate 55 in south St. Louis has forced closure of all southbound... More >>
12 hours ago December 05, 2016 Dec 5, 2016 Monday, December 05 2016 Monday, December 05, 2016 1:35:24 PM CST in News
ST. LOUIS (AP) — A St. Louis-area businessman and three other men will have a hearing Tuesday in federal court... More >>
12 hours ago December 05, 2016 Dec 5, 2016 Monday, December 05 2016 Monday, December 05, 2016 1:24:17 PM CST in News
COLUMBIA — Columbia police officers arrested Edward Rosson Sunday night after he allegedly assaulted his girlfriend while holding a machete... More >>
13 hours ago December 05, 2016 Dec 5, 2016 Monday, December 05 2016 Monday, December 05, 2016 1:01:00 PM CST in News
CLAYTON (AP) — A Missouri man is jailed on $500,000 cash bond after being accused of telling co-workers he was... More >>
13 hours ago December 05, 2016 Dec 5, 2016 Monday, December 05 2016 Monday, December 05, 2016 12:58:25 PM CST in News
ST. LOUIS (AP) — A Missouri woman has been arrested on suspicion of drunken driving and involuntary manslaughter in a... More >>
13 hours ago December 05, 2016 Dec 5, 2016 Monday, December 05 2016 Monday, December 05, 2016 12:32:13 PM CST in News
COLUMBIA — We are fast-approaching the end of the holiday season and that time of year when some of us... More >>
14 hours ago December 05, 2016 Dec 5, 2016 Monday, December 05 2016 Monday, December 05, 2016 12:09:00 PM CST in News
WAYNESVILLE — Pulaski County Sheriff Ronald Long will advise detectives investigating a discovery of an adolescent's remains to close the... More >>
14 hours ago December 05, 2016 Dec 5, 2016 Monday, December 05 2016 Monday, December 05, 2016 11:47:16 AM CST in News
JEFFERSON CITY (AP) — The November election put Republicans in full control of a record number of state legislatures around... More >>
14 hours ago December 05, 2016 Dec 5, 2016 Monday, December 05 2016 Monday, December 05, 2016 11:10:26 AM CST in News
Columbia, MO
Broken Clouds 34°
3am 32°
4am 31°
5am 31°
6am 31°

Select a station to view its upcoming schedule:

Coming Up Next

1:37a
Paid Program
2:07a
Today
3:00a
Mad Money
2:00a
Paid Program
2:30a
Paid Program
3:00a
Paid Program

Tonight's Schedule

7:00p
The Voice
8:00p
This Is Us
9:00p
Chicago Fire
7:00p
The Flash
8:00p
No Tomorrow
9:00p
KOMU 8 News @ Nine on The CW
9:30p
Seinfeld