'Fiscal Cliff' Could Affect Missouri Economy, Budget

5 years 10 months 3 days 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
CALLAWAY COUNTY - Callaway County deputies found methamphetamine and drug paraphernalia during a traffic stop early Sunday morning, according to... More >>
7 hours ago Sunday, October 14 2018 Oct 14, 2018 Sunday, October 14, 2018 10:05:00 PM CDT October 14, 2018 in News
SLATER - Gloria is a 2-year-old pit bull who was found near Slater, Missouri after someone shot her in the... More >>
8 hours ago Sunday, October 14 2018 Oct 14, 2018 Sunday, October 14, 2018 8:26:00 PM CDT October 14, 2018 in News
COLUMBIA (AP) — Missouri's Republican Senate candidate Josh Hawley took a cue from President Donald Trump on Sunday and said... More >>
12 hours ago Sunday, October 14 2018 Oct 14, 2018 Sunday, October 14, 2018 4:50:00 PM CDT October 14, 2018 in News
(CNN) - For many, the fight against Brett Kavanaugh's confirmation was about more than a seat on the Supreme Court.... More >>
14 hours ago Sunday, October 14 2018 Oct 14, 2018 Sunday, October 14, 2018 3:04:00 PM CDT October 14, 2018 in News
(CNN) - Florida Panhandle officials are trying to figure out how to resume classes after Hurricane Michael damaged or destroyed... More >>
14 hours ago Sunday, October 14 2018 Oct 14, 2018 Sunday, October 14, 2018 2:29:00 PM CDT October 14, 2018 in News
COLUMBIA - Dozens of people gathered at Burr Oak Brewing on Sunday for the second annual Columbia Micro-Con. STL... More >>
15 hours ago Sunday, October 14 2018 Oct 14, 2018 Sunday, October 14, 2018 2:09:00 PM CDT October 14, 2018 in News
MOBERLY- The Randolph County Sheriff's Office is looking for a suspect after an armed robbery at Dino Mart on 1634... More >>
16 hours ago Sunday, October 14 2018 Oct 14, 2018 Sunday, October 14, 2018 12:41:00 PM CDT October 14, 2018 in Top Stories
COLUMBIA - A field of flowers swept through Columbia on Sunday in honor of the Alzheimer's Association’s 2018 Walk to... More >>
20 hours ago Sunday, October 14 2018 Oct 14, 2018 Sunday, October 14, 2018 8:54:00 AM CDT October 14, 2018 in News
HARTSBURG - The Hartsburg Pumpkin Festival is celebrating its 27th year with traditions like live music and picking your own... More >>
1 day ago Saturday, October 13 2018 Oct 13, 2018 Saturday, October 13, 2018 11:05:00 PM CDT October 13, 2018 in News
COLUMBIA - City officials declared the month of October Disability Employment Awareness Month at a fundraiser in Stephens Lake Park... More >>
1 day ago Saturday, October 13 2018 Oct 13, 2018 Saturday, October 13, 2018 10:39:00 PM CDT October 13, 2018 in News
COLUMBIA - The first ever Marc’s Dash 5K and Fun Run was held Saturday to honor a fallen firefighter. ... More >>
1 day ago Saturday, October 13 2018 Oct 13, 2018 Saturday, October 13, 2018 8:43:00 PM CDT October 13, 2018 in News
FULTON - "Richard's Family" said its goal is giving a safe space and a sense of family for LGBTQ youth.... More >>
1 day ago Saturday, October 13 2018 Oct 13, 2018 Saturday, October 13, 2018 7:18:00 PM CDT October 13, 2018 in News
(CNN) -- Hurricane Michael's death toll climbed to 18 Saturday, after another victim was discovered in Virginia. Fears were... More >>
1 day ago Saturday, October 13 2018 Oct 13, 2018 Saturday, October 13, 2018 6:23:00 PM CDT October 13, 2018 in News
JEFFERSON CITY- Police arrested a man wanted for attempted murder and attempted kidnapping Saturday. Police were investigating an unrelated... More >>
1 day ago Saturday, October 13 2018 Oct 13, 2018 Saturday, October 13, 2018 3:50:00 PM CDT October 13, 2018 in News
(CNN) -- The percentage of young kids in the US who received no vaccine doses has continued to rise, as... More >>
1 day ago Saturday, October 13 2018 Oct 13, 2018 Saturday, October 13, 2018 2:33:00 PM CDT October 13, 2018 in News
ST. LOUIS (AP) — A Missouri man who previously served 17 years in prison for two killings has been found... More >>
1 day ago Saturday, October 13 2018 Oct 13, 2018 Saturday, October 13, 2018 2:14:15 PM CDT October 13, 2018 in News
COLUMBIA - A Columbia man was shot and killed early Saturday morning on Rice Road and Ballenger Lane. Police... More >>
1 day ago Saturday, October 13 2018 Oct 13, 2018 Saturday, October 13, 2018 8:22:00 AM CDT October 13, 2018 in News
COLUMBIA - Eight weeks into the high school football season and we're back to the chilly, fall nights. Our... More >>
2 days ago Friday, October 12 2018 Oct 12, 2018 Friday, October 12, 2018 6:03:00 PM CDT October 12, 2018 in Friday Night Fever
Columbia, MO
Broken Clouds 37°
6am 37°
7am 37°
8am 37°
9am 39°