'Fiscal Cliff' Could Affect Missouri Economy, Budget

4 years 3 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
KANSAS CITY, Mo . (AP) — Students at a Kansas City-area high school are being evacuated as authorities investigate a... More >>
1 hour ago March 27, 2017 Mar 27, 2017 Monday, March 27 2017 Monday, March 27, 2017 11:43:48 AM CDT in News
COLUMBIA - A Columbia man was arrested Sunday evening on suspicion of first-degree burglary. CPD officers were dispatched to... More >>
14 hours ago March 26, 2017 Mar 26, 2017 Sunday, March 26 2017 Sunday, March 26, 2017 10:28:00 PM CDT in Top Stories
COLUMBIA - Columbia police arrested a man Sunday morning after he allegedly shot multiple rounds from his gun near the... More >>
17 hours ago March 26, 2017 Mar 26, 2017 Sunday, March 26 2017 Sunday, March 26, 2017 7:25:00 PM CDT in Top Stories
COLUMBIA Updated 7:05 p.m. - The Columbia Police Department said a second victim in the Sunday shooting on I-70 Drive... More >>
21 hours ago March 26, 2017 Mar 26, 2017 Sunday, March 26 2017 Sunday, March 26, 2017 4:18:00 PM CDT in Top Stories
COLUMBIA - During his time as athletic director at the University of Missouri Mike Alden oversaw a little bit of... More >>
22 hours ago March 26, 2017 Mar 26, 2017 Sunday, March 26 2017 Sunday, March 26, 2017 2:35:00 PM CDT in Sports
ST. LOUIS (AP) — About 1,000 of St. Louis' delinquent properties are expected to face the wrecking ball to create... More >>
1 day ago March 26, 2017 Mar 26, 2017 Sunday, March 26 2017 Sunday, March 26, 2017 1:13:10 PM CDT in News
OZARK, Mo . (AP) — A southwestern Missouri man is accused of sexual misconduct involving a teenager who investigators say... More >>
1 day ago March 26, 2017 Mar 26, 2017 Sunday, March 26 2017 Sunday, March 26, 2017 12:20:00 PM CDT in Continuous News
FORSYTH, Mo . (AP) — Authorities said a southern Missouri man told investigators he was either sleepwalking or dreaming when... More >>
1 day ago March 26, 2017 Mar 26, 2017 Sunday, March 26 2017 Sunday, March 26, 2017 10:25:00 AM CDT in News
COLUMBIA - Officers said a suspect is on the run after a robbery at an Extended Stay America Saturday night.... More >>
1 day ago March 25, 2017 Mar 25, 2017 Saturday, March 25 2017 Saturday, March 25, 2017 10:39:11 PM CDT in News
COLUMBIA - A hearing for Sturgeon Police Chief Greg Halderman will take place on Monday. On the week of... More >>
1 day ago March 25, 2017 Mar 25, 2017 Saturday, March 25 2017 Saturday, March 25, 2017 7:16:00 PM CDT in News
LINN - State Technical College in Linn opened up its campus to recruit prospective students and to show off what... More >>
1 day ago March 25, 2017 Mar 25, 2017 Saturday, March 25 2017 Saturday, March 25, 2017 4:49:00 PM CDT in News
UPDATED 3/27/17 10:53 a.m. The Boone County Sheriff's Department notified the Moniteau County Sheriff's Department of a missing person.... More >>
1 day ago March 25, 2017 Mar 25, 2017 Saturday, March 25 2017 Saturday, March 25, 2017 4:37:00 PM CDT in News
ST. LOUIS (AP) — Two men each are jailed on $750,000 bond after being accused in connection with the St.... More >>
1 day ago March 25, 2017 Mar 25, 2017 Saturday, March 25 2017 Saturday, March 25, 2017 3:38:00 PM CDT in News
COLUMBIA - Two semi trucks and two cars were part of a wreck Saturday that closed westbound I-70. The... More >>
1 day ago March 25, 2017 Mar 25, 2017 Saturday, March 25 2017 Saturday, March 25, 2017 3:23:00 PM CDT in Top Stories
JEFFERSON CITY, Mo. (AP) — The Republican-led Missouri Legislature will get back to a business-friendly agenda when it returns from... More >>
2 days ago March 25, 2017 Mar 25, 2017 Saturday, March 25 2017 Saturday, March 25, 2017 12:35:00 PM CDT in News
ST. LOUIS (AP) — A St. Louis man has been sentenced to life in prison without the possibility of parole... More >>
2 days ago March 25, 2017 Mar 25, 2017 Saturday, March 25 2017 Saturday, March 25, 2017 10:54:00 AM CDT in News
CLAYTON, Mo. (AP) — An activist who helped shut down a St. Louis-area freeway during protests commemorating the first anniversary... More >>
2 days ago March 25, 2017 Mar 25, 2017 Saturday, March 25 2017 Saturday, March 25, 2017 10:45:00 AM CDT in News
ST. LOUIS (AP) — St. Louis police say a 15-year-old boy was killed and six other people were critically wounded... More >>
2 days ago March 25, 2017 Mar 25, 2017 Saturday, March 25 2017 Saturday, March 25, 2017 10:41:00 AM CDT in News
Columbia, MO
Broken Clouds 52°
2pm 53°
3pm 55°
4pm 55°
5pm 55°

Select a station to view its upcoming schedule:

Coming Up Next

1:00p
Days of Our Lives
2:00p
The Dr. Oz Show
3:00p
Dr. Phil
1:00p
Maury
2:00p
Judge Alex
2:30p
Judge Alex

Tonight's Schedule

7:00p
The Voice
9:01p
Taken
7:00p
Supergirl
8:00p
Jane the Virgin
9:00p
KOMU 8 News @ Nine on The CW
9:30p
Seinfeld