By January 2011, Missouri will be facing a budget shortfall of about $1.2 billion and the state government will likely be experiencing the most difficult economic times it has seen in over 30 years, according to Missouri 12th District State Sen. Brad Lager.
Lager spoke during Friday’s Rotary luncheon held at the Chillicothe Country Club and noted that the reasons for the shortfall deal with a substantial drop in state revenue and increasing costs associated with Medicaid, the Department of Corrections, the Foundation Formula, and other state-funded programs.
Lager said that in October 2009, the state experienced a 14 percent drop in revenue and, for the current fiscal year, is bringing in about 10 percent less money than last year. He also said the state’s budget is based on only 1 percent growth from its predecessor.
“There are challenging times ahead of us,” Lager said. He added that the only way to fix the problem is job creation by the private sector.
He explained that Missouri’s state revenue is driven by income tax (66 percent) and sales or use tax (24 percent).
“That’s 90 percent of our revenue that’s driven by people who have jobs and are spending money,” Lager said.
He noted that the state has at its disposal, federal stabilization funds. But, that one-time money, Lager says, is not “a long-term solution.”
Missouri is one of only seven states in the nation to keep its AAA bond rating, and one of only a handful that has not used all of its federal stabilization funds in one year, which has delayed the inevitable, somewhat.
See today's edition (Monday, Nov. 9, 2009) for a full article.
