Thanks to Donna Lichtenegger for forwarding summary information on Governor Nixon’s proposed 2013 budget below:

Economists are generally predicting a slow but steady recovery for the U.S. economy which is still struggling with unemployment at 8.5%. There is a positive sign with the four-week moving average of weekly initial unemployment claims falling and stabilizing below 400,000 since November. Missouri is fairing slightly better than the national economy with unemployment currently at 8.0%. Certainly this is an improvement when compared to the record unemployment of 9.6% a year ago.

With this in mind, forecasting state revenues for Missouri’s upcoming fiscal year has been challenging. The revised Consensus Revenue Estimate (CRE) for the current FY2012 is 2.7% or $7.301 billion Net General Revenue (GR) collections. The CRE agreed to by the House, Senate and the Governor for FY2013 is for GR to grow at a less than average rate of 3.9%. This would result in Net GR collections of $7.586 billion. This amount would return tax collections available for the budget to slightly above the actual collections for FY2009. The CRE for FY2013 would provide an increase in net collections of $285 million above the original CRE that use used to craft the FY2012 budget.

However, the FY2012 budget also has more than $500 million of one-time Federal Budget Stabilization Funds that are supporting current programs, including the K 1-12 School Foundation Formula. These funds will not be available for the FY2013 budget. In addition, there are a number of mandatory increases in FY2013 which will require the commitment of GR funds such as the need for a $90 million increase in the state’s match rate for our Medicaid program.

The Governor’s proposed budget includes: carrying over funds, reductions, eliminations, cost containments, administrative savings, debt refinancing, generation of additional revenues from debt collections, other revenue efficiencies, increased Gaming fees and a tax amnesty plan. Approximately $88.7million of these enhanced revenue proposals will require additions and/or changes to current state statutes.

The Governor’s FY2013 budget is balanced through the following components:

• $191.7 million savings through efficiencies and reallocations in the Medicaid program
• $89.0 million reduction for 4-year higher education institutions. This is a 14% decrease from the appropriations for FY2012
• $64.3 million in additional debt collections and other revenue efficiencies
• $51.8 million increase from a tax amnesty plan
• $41.0 million savings through debt restructuring
• $29.3 million in reduced staff and administrative costs in state agencies
• $16.9 million reduction for community and technical colleges, also a 14% decrease from the appropriations for FY2012
• $15.0 million in additional lottery revenue through advertising and other Lottery Commission initiatives
• $7.0 million reduction in biodiesel subsidy payments
• $2.0 million reduction in local public health agency grants

Items that are prioritized in the Governor’s FY2013 budget include:

• $3.009 billion for the Foundation Formula, including an overall increase of $5.0 million with a General Revenue increase of $203.2 million needed in part to also offset lost Federal Budget Stabilization Funds
• $99.8 million to provide funding for K-12 transportation at the same level allowed after the Governor’s $8.0 million expenditure restriction in FY2012 appropriation
• $105.5 million to maintain available funding for the A+, Bright Flight, and Access MO Scholarship Programs, including a general revenue increase of $25.0 million to partially offset the loss of MOHELA funds
• $23.6 million for a 2% salary increase for state employees, effective January 1, 2013
• $14.9 million to maintain funding for the Customized Jobs Training Program
• $4.0 million for innovations in science and technology as authorized in the Missouri Science and Innovation Reinvestment Act
• $31.0 million of increased gaming fees to provide a more stable revenue source for the state’s seven veteran’s homes