JEFFERSON CITY — Missouri is facing a projected $261 million shortfall in the next several months because of slumping state tax revenues.
New projections agreed to by Democratic Gov. Jay Nixon and Republican legislative budget leaders now forecast Missouri's 2009 general tax revenues to decline by 4 percent compared with last year — a sharp contrast with the 3.4 percent growth that had been expected when lawmakers prepared the current budget.
Nixon's office released the revised revenue figures Thursday evening, five days before he is to outline his midyear budget cuts and his recommended 2010 budget during his State of the State address.
Missouri is operating on a $22.4 billion budget for its current fiscal year, which runs through June 30.
Revenues now are projected to come in $542 million below the budgeted expectations. But Missouri is able to cover part of that gap with money that had been set aside by lawmakers and former Republican Gov. Matt Blunt. The result is a $261 million shortfall, officials said Thursday.
The newly projected shortfall is smaller than the $342 million gap that Nixon's budget adviser had forecast in early December, a month after Nixon had won the election.
Executive and legislative branch budget officials meet each December to reevaluate state finances and release figures in January with a revised midyear revenue forecast and an initial forecast for the next fiscal year.
Their revenue estimate for the 2010 fiscal year assumes 1 percent growth. But that's based on the declining revenues of 2009, meaning the projected 2010 general tax revenues still are $465 million below what had originally been expected for 2009.
To compensate, state officials likely will have to make permanent any midyear budget cuts announced next week by Nixon and then cut several hundred million dollars more out of the state budget for 2010, said House Budget Committee Chairman Allen Icet, R-Wildwood.