Gov. Mike Parson says the coronavirus has already been hard felt in the state’s economy – more people are staying home, business operations have been limited, many people have lost their jobs and state revenue is down.
During Wednesday’s press briefing, he says he is freezing $180 million in spending during the current state budget year to handle money problems created by COVID-19. Parson says the cuts will affect the Missouri Departments of Higher Education and Workforce Development, Office of Administration, Transportation, Economic Development and Natural Resources. More than $81 million will affect higher education.
“Of the $180 million being restricted, I want to assure you these restrictions are absolutely necessary and they include funding for several departments, many of which are priorities of my own administration,” says Parson. “While we still do not know the true impact of COVID-19 on the economy, we do know that we do have to act now. Between now and June 31, we’re estimating an over $500 million shortfall.”
Parson says additional budget restrictions could be ahead, depending on how big of a financial blow the coronavirus has on the state’s cash flow. The state is required by Constitution to pass a balanced budget.
“COVID-19 has had serious impacts on our anticipated economic growth,” says Parson. “Now, we are expecting significant revenue declines – some of which may be larger than those experienced during the Great Recession.”
But he says he’s hopeful that $315 million in federal money could help to offset some of the money problems.
The governor touted his $100 million emergency fund created for the current budget year, but he did not say whether he’s dipping into that account to offset some of the expenses that come with COVID-19.
State Budget Director Dan Haug says he expects the state’s piggy bank to deal with the respiratory disease’s fallout for a while.
“I do think that this is going to affect our state budget, not only here in FY 2020 which ends June 30, but I think it will affect our budget all of fiscal year 2021, which goes through next June 30, 2021. So we think this will be an issue we’ll be dealing with in the budget at least through FY 2021, maybe even a little bit longer than that,” says Haug.
The governor also says the judicial branch and the Secretary of State’s office have worked to find savings in their own budgets. Beth Riggert with the Missouri Supreme Court says the judiciary was asked to forego about $3.47 million from fourth-quarter general revenue transfers into two funds: $2,995,616 from the treatment courts coordinating fund and $474,559 from the judicial education training fund. The commissions that oversee each of those funds – the Treatment Courts Coordinating Commission and the Coordinating Commission for Judicial Department Education – agreed.
Missouri Secretary of State spokesperson Maura Browning says the office has found $1.35 million in withholds, including $1 million in election costs excess after finetuning anticipated reimbursements to local election authorities for the presidential primary. Another $100,000 in operating expenses and $250,000 in advertising of Missouri’s voter ID were also restricted.
To view the full list of withholds, click here. or see the embedded PDF file below.