'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
13 minutes ago January 17, 2017 Jan 17, 2017 Tuesday, January 17 2017 Tuesday, January 17, 2017 7:33:00 PM CST in News
COLUMBIA – Concerned community members gathered at Republican U.S. Representative Vicky Hartzler’s office Tuesday to protest a recent development in... More >>
5 hours ago January 17, 2017 Jan 17, 2017 Tuesday, January 17 2017 Tuesday, January 17, 2017 1:58:00 PM CST in News
COLUMBIA – Higher education institutions have concern over the impact of Governor Greitens' announced budget cuts that will largely decrease... More >>
6 hours ago January 17, 2017 Jan 17, 2017 Tuesday, January 17 2017 Tuesday, January 17, 2017 1:41:00 PM CST in Continuous News
JEFFERSON CITY - Rep. Kip Kendrick, D-Columbia, filed two bills on Tuesday addressing the rise of student debt. The... More >>
6 hours ago January 17, 2017 Jan 17, 2017 Tuesday, January 17 2017 Tuesday, January 17, 2017 1:35:00 PM CST in News
CARTHAGE (AP) — Authorities say a 10-year-old girl has died in a southwest Missouri shooting that appears to be accidental.... More >>
7 hours ago January 17, 2017 Jan 17, 2017 Tuesday, January 17 2017 Tuesday, January 17, 2017 12:01:13 PM CST in News
JEFFERSON CITY (AP) — New Missouri Gov. Eric Greitens will outline his policies on jobs, ethics, public safety and education... More >>
8 hours ago January 17, 2017 Jan 17, 2017 Tuesday, January 17 2017 Tuesday, January 17, 2017 11:14:00 AM CST in News
ST. LOUIS (AP) — St. Louis' fortunes may be looking up, thanks to a surprising surge in business startups. ... More >>
8 hours ago January 17, 2017 Jan 17, 2017 Tuesday, January 17 2017 Tuesday, January 17, 2017 11:03:00 AM CST in News
COLUMBIA - Prosecutors have filed charges against one of two men arrested following an assault at the Red Roof Inn... More >>
9 hours ago January 17, 2017 Jan 17, 2017 Tuesday, January 17 2017 Tuesday, January 17, 2017 10:25:00 AM CST in News
COLUMBIA - An MU associate teaching professor is presenting a petition to the Columbia City Council Tuesday evening on behalf... More >>
18 hours ago January 17, 2017 Jan 17, 2017 Tuesday, January 17 2017 Tuesday, January 17, 2017 1:34:00 AM CST in News
COLUMBIA - Almost 50 years after the death of civil rights leader Dr. Martin Luther King Jr., Columbia groups still... More >>
21 hours ago January 16, 2017 Jan 16, 2017 Monday, January 16 2017 Monday, January 16, 2017 10:08:00 PM CST in News
SUNRISE BEACH – Buying and selling personal property privately, such as furniture, clothes and cars, is commonplace in today’s world... More >>
22 hours ago January 16, 2017 Jan 16, 2017 Monday, January 16 2017 Monday, January 16, 2017 9:18:00 PM CST in News
COLUMBIA - After a budget resolution aimed at repealing Obamacare was reached Jan. 12, groups in Missouri plan to protest... More >>
1 day ago January 16, 2017 Jan 16, 2017 Monday, January 16 2017 Monday, January 16, 2017 2:50:00 PM CST in News
CALIFORNIA (AP) - Central Missouri Democrats nominated an attorney who formerly worked for the Missouri Senate to run in a... More >>
1 day ago January 16, 2017 Jan 16, 2017 Monday, January 16 2017 Monday, January 16, 2017 2:36:00 PM CST in News
HILLSBORO (AP) - The Missouri State Highway Patrol says a 28-year-old man died after a four-wheeler he was riding on... More >>
1 day ago January 16, 2017 Jan 16, 2017 Monday, January 16 2017 Monday, January 16, 2017 2:09:00 PM CST in News
NICKELVILLE (AP) - A southwest Missouri county highway is expected to be closed until Thursday as crews clean up an... More >>
1 day ago January 16, 2017 Jan 16, 2017 Monday, January 16 2017 Monday, January 16, 2017 2:02:00 PM CST in News
ST. LOUIS (AP) - Police are investigating after a 34- year-old man was found dead outside a hospital in north... More >>
1 day ago January 16, 2017 Jan 16, 2017 Monday, January 16 2017 Monday, January 16, 2017 10:51:00 AM CST in News
COLUMBIA - Cafe Berlin reopened Monday for brunch, after being closed following a destructive break-in. The break-in on Saturday night... More >>
1 day ago January 16, 2017 Jan 16, 2017 Monday, January 16 2017 Monday, January 16, 2017 10:05:00 AM CST in News
ST. LOUIS (AP) - St. Louis' fortunes may be looking up, thanks to a surprising surge in business startups. ... More >>
1 day ago January 16, 2017 Jan 16, 2017 Monday, January 16 2017 Monday, January 16, 2017 9:41:00 AM CST in News
Columbia, MO
Broken Clouds 38°
8pm 36°
9pm 35°
10pm 34°
11pm 33°

Select a station to view its upcoming schedule:

Coming Up Next

7:00p
The Wall
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

Tonight's Schedule

7:00p
The Wall
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